Results 1 to 5 of 5

Thread: The Pittsburgh Penguins Dividend: A Franchise in the Mold of Berkshire Hathaway

      
  1. #1
    Evilpens's Avatar
    Status : Evilpens is offline
    Rank : Banned
    Join Date : Apr 20, 2010
    Location : Southeast of the Burgh
    Posts : 2,099
    Threads : 271
    Last Online : Jan-11-2011 @ 10:03 PM
    Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo

    Default The Pittsburgh Penguins Dividend: A Franchise in the Mold of Berkshire Hathaway

    http://blogs.forbes.com/sportsmoney/...hannelsections




    Posted by Mike Colligan




    After former Philadelphia Flyers winger Arron Asham signed with the rival Pittsburgh Penguins over the weekend, his agent wasted no time revealing the reason for his decision to take less money with the team. “We had several very good offers,” Jarrett Bousquet told InsidePittsburghSports.com. “In the end, [Asham] felt Pittsburgh was the best place to win the Stanley Cup.”

    Players turning down more lucrative offers to play for the Penguins is nothing new for the team. In 2008, Brooks Orpik shunned the New York Rangers and others to stay with the team, as General Manager Ray Shero explained at the time:

    You have guys who have called me — the same situation as last year — who really want to play here. I’m happy Brooks Orpik took less money to be here. He wants to be here.

    Last summer it was veteran forward Bill Guerin who took a $2.5m reduction in pay to remain in Pittsburgh:

    There’s a lot of good teams I could have played for but this obviously was the best fit. I’d be lying if I didn’t say that [Sidney Crosby] was one of the big reasons I wanted to stay. It’s so much fun to play with him.

    Matt Cooke, Jay McKee, Ruslan Fedotenko, Mike Rupp, Brent Johnson, Evgeni Malkin. These players and more have likely accepted less than their market value to sign with the Penguins in the last two seasons – but why? Searching for a reason starts with the player that made the 38-year-old Guerin sound like a child describing his idol.

    Sidney Crosby is the rare sports superstar that has lived up to the lofty expectations bestowed on him since his teenage years. In just five NHL seasons he’s won a Stanley Cup, Hart Trophy (league MVP), Art Ross Trophy (leading scorer), Rocket Richard Trophy (most goals), Mark Messier Leadership Awards, and has appeared in multiple All-Star Games. In February, he scored the game-winning overtime goal in the Gold Medal game at the Olympics for his home country in Vancouver.

    A player with half the resume could command top dollar in the NHL, yet Crosby took a hometown discount to stay with the team for just $8.7m a season. Players are eligible to receive $11.88m a season this summer under the CBA, but Crosby and Ray Shero know paying that money to a single player can be crippling under today’s salary-capped NHL.

    Shero and his vastly underrated sidekick Jason Botterill have transformed a franchise once withering away in bankruptcy into a potential dynasty capable of imitating the success of the Edmonton Oilers in the 1980’s. With the help of Crosby’s unselfishness, the Penguins have created a culture built on patience, hard work, and sacrifice for the greater good.

    Sustained failures and a little luck has surely paid off as well for the Penguins in the draft. In addition to Crosby, the team features a second superstar in Evgeni Malkin who also earns just $8.7m a year. Malkin was a 2nd overall pick in 2004 and joins Marc-Andre Fleury (#1 – 2003) and Jordan Staal (#2 – 2006) to form one of the best young supporting casts in league history.

    The Chicago Blackhawks followed a similar path to a Stanley Cup by building through the draft, but underwent a massive overhaul this summer as aggressive spending led to a salary cap crunch. Meanwhile, fiscal responsibility allowed Shero to lure in two prized free agent defensemen last month in Paul Martin and Zbynek Michalek. The Phoenix Coyotes reportedly pitched hard to retain Michalek’s services, but it can’t be easy competing with a suitor like Pittsburgh when your franchise is facing constant bankruptcy and relocation headaches.

    In addition, the exciting core of young talent in Western Pennsylvania is owned by former superstar Mario Lemieux who pulled the franchise out of bankruptcy in 1999. Lemieux used his popularity and connections to keep the team in Pittsburgh after working out a deal with the city to build the world-class CONSOL Energy Center scheduled to open this fall. With a legendary owner, a brand new arena, a passionate fanbase, and the opportunity to play with Crosby, it’s no wonder that players are lining up at Shero’s door.

    The lure of the Penguins franchise is comparable to the aura of Berkshire Hathaway in the financial world. Berkshire’s Chairman and CEO Warren Buffett spoke to the power of reputation when it comes to acquiring assets on the open market in his 2005 Letter to Shareholders:

    Forest River, our second acquisition, closed on August 31. A couple of months earlier, on June 21, I received a two-page fax telling me – point by point – why Forest River met the acquisition criteria we set forth on page 25 of this report. I had not before heard of the company, a recreational vehicle manufacturer with $1.6 billion of sales, nor of Pete Liegl, its owner and manager. But the fax made sense, and I immediately asked for more figures. These came the next morning, and that afternoon I made Pete an offer. On June 28, we shook hands on a deal…

    …On November 12, 2005, an article ran in The Wall Street Journal dealing with Berkshire’s unusual acquisition and managerial practices. In it Pete declared, “It was easier to sell my business than to renew my driver’s license.”

    In New York, Cathy Baron Tamraz read the article, and it struck a chord. On November 21, she sent me a letter that began, “As president of Business Wire, I’d like to introduce you to my company, as I believe it fits the profile of Berkshire Hathaway subsidiary companies as detailed in a recent Wall Street Journal article.” By the time I finished Cathy’s two-page letter, I felt Business Wire and Berkshire were a fit.

    Buffett has the luxury of choosing his acquisitions from an array of suitors because he’s built a company founded on respect and prudent decisions. The Chicago Blackhawks of the financial world crashed and burned in the recession when the boom years came to a screeching halt. Meanwhile, Buffett and Berkshire opened their wallet to parlay billions of dollars in available cash into investments such as Goldman Sachs, General Electric and Burlington Northern Santa Fe; just as Shero did for the Penguins over the summer.

    Marek Svatos, a promising young free agent winger who once scored 32 goals in the NHL, would relish the opportunity to suit up in the Penguins Black and Vegas Gold this season. “Marek would certainly be able to provide offence for a team like Pittsburgh, and on paper it looks like a good fit,” his agent Richard Evans told me. “But ultimately that is up to Ray [Shero]. Pittsburgh is a team that Marek would be very interested in joining.”

    Sound familiar? As Shero kicks back in his chair, looks out on the shiny new CONSOL Energy Center, and channels his inner-Buffett, Penguins fans know the future of their team is in safe hands.

  2. #2
    Kipper's Avatar
    Status : Kipper is offline
    Rank : Legend
    Join Date : Oct 8, 2009
    Posts : 67,323
    Threads : 1817
    Last Online : Apr-25-2017 @ 08:36 PM
    Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo

    Default Re: The Pittsburgh Penguins Dividend: A Franchise in the Mold of Berkshire Hathaway

    A player with half the resume could command top dollar in the NHL, yet Crosby took a hometown discount to stay with the team for just $8.7m a season. Players are eligible to receive $11.88m a season this summer under the CBA, but Crosby and Ray Shero know paying that money to a single player can be crippling under today’s salary-capped NHL.


    I hate some of this discount ****. Yeah sure, some have taken "discounts" but they are usually far less for some than they make it out to be. Case in point, Sidney Crosby..

    He signed his extension in July 2007 which means he had to use 2007-08 Cap numbers to determine maximum limit even though his contract didn't kick in until his entry level contract expired after the 07-08 season...

    Under the CBA ...

    MAXIMUM PLAYER SALARY

    Is there a maximum an individual player may earn?

    Yes. No player may be eligible to contract for or receive in excess of 20% of the Club's upper limit in total annual compensation (NHL salary plus signing, roster, reporting and all performance bonuses). In 2005-06, no player will be permitted to contract for total compensation in excess of $7.8 million in any year of his contract.
    By 2008-09 we were spending to the cap ceiling. 20% on 56.7 million is 11.40 million but if we're talking 2007-08 when the Pens payroll finished at $44.5 . The difference here is $8.9 million.

    Sid signed an $8.7 million per year contract. His average has to be under what the CBA states. So $200K is a discount worthy of making a big deal about?
    The Standard Is The Standard and The Pittsburgh Sports Forum Is The Standard


  3. #3
    Evilpens's Avatar
    Status : Evilpens is offline
    Rank : Banned
    Join Date : Apr 20, 2010
    Location : Southeast of the Burgh
    Posts : 2,099
    Threads : 271
    Last Online : Jan-11-2011 @ 10:03 PM
    Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo

    Default Re: The Pittsburgh Penguins Dividend: A Franchise in the Mold of Berkshire Hathaway

    Kip Just to let you know Willie Mitchell signed a 2 Yr. 3.5 Mill per Contract with L.A. ! The guy is one hit away from from Retirement!! Still think RS overpayed Michalek @ 4 Mill a Yr.??


    http://nbcsports.msnbc.com/id/388548...s-player_news/



    The Los Angeles Kings have inked Willie Mitchell to a two-year contract worth $3.5 million per season.

    Mitchell skated in 48 games last year due to a concussion, but he has proven his health by skating with a number of teams this off-season. He should help replace the toughness and steadiness that the Kings lost when Sean O'Donnell signed with Philadelphia.

  4. #4
    Kipper's Avatar
    Status : Kipper is offline
    Rank : Legend
    Join Date : Oct 8, 2009
    Posts : 67,323
    Threads : 1817
    Last Online : Apr-25-2017 @ 08:36 PM
    Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo

    Default Re: The Pittsburgh Penguins Dividend: A Franchise in the Mold of Berkshire Hathaway

    Let's make no mistakes here the Kings are a horribly run organization. I swear I recently made that point in some other discussion

    Man, Mitchell is old too. He should be about 33-34 by now.

    I'm more ****ed at spending $9 million or all $9 million on defense than individual players. Michalek for his age and ability, $4 million per is about right. Esepcially next to Orpik.
    The Standard Is The Standard and The Pittsburgh Sports Forum Is The Standard


  5. #5
    Evilpens's Avatar
    Status : Evilpens is offline
    Rank : Banned
    Join Date : Apr 20, 2010
    Location : Southeast of the Burgh
    Posts : 2,099
    Threads : 271
    Last Online : Jan-11-2011 @ 10:03 PM
    Sports Logo Sports Logo Sports Logo Sports Logo Sports Logo

    Default Re: The Pittsburgh Penguins Dividend: A Franchise in the Mold of Berkshire Hathaway

    I think he is 33 or 34 ! But the Big Problem is he missed the rest of the season & Playoffs with post Concussion syndrome & Geno didn't hit him that hard & he was just coming back from Concussion problems when Geno hit him. That's why I said he is a Hit away from retirement

Quick Reply Quick Reply

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Members who have read this thread: 0

There are no members to list at the moment.

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •