NEW YORK (The Deal) -- The National Hockey League has come a long way in the last 10 years and, as has been the case with all professional sports leagues in the U.S., valuations are on the rise, along with interest from those wishing to join the exclusive club of owners.
So much so that real estate tycoon Ron Burkle and NHL hall-of-famer Mario Lemieux, the majority owners of the Pittsburgh Penguins, said late on June 3 that the two had hired Morgan Stanley (MS) to advise the owners on a review of the team's options.
"We conduct periodic reviews of our business and, because we have received several inquiries about the franchise in recent years, we decided to engage Morgan Stanley for their insight and counsel," Lemieux and Burkle said in a joint statement. "After buying the team out of bankruptcy, ensuring its long-term future in Pittsburgh and creating a strong foundation for continued success, we believe it is time to explore our options."
One industry source said the team could be worth north of $500 million considering that it plays in a new stadium with a 30-year lease, has a strong local fan base and a swath of good players including Sydney Crosby, considered by many as one of the best offensive players in the league, signed under contract for the foreseeable future.
"It's definitely a more attractive franchise than the Coyotes," said the source referencing the sale in October of a majority stake in the Phoenix Coyotes that valued the league's worst-drawing team at $298 million. "But [the team] is really worth what someone is willing to pay for it. It's not a multiple of anything -- you really have to go with the stick value."
The team, which was purchased out of bankruptcy in 1999 by Yucaipa Cos. LLC founder Burkle and Lemieux, two creditors, drew an average of 18,000 fans in 2015, making it the 12th most popular team by home attendance, according to ESPN.com. It also plays in a state-of-art arena that opened for business just five years ago, the Consol Energy Center.
According to a team statement, the team has sold out 377 straight games, dating back to February 2007, and had led the NHL's U.S.-based teams in local television ratings for six straight years.
"Our goal all along was to solidify the franchise both on and off the ice," Lemieux said in the statement. "Our star players are signed to long-term contracts, they've got a deep and passionate [fan] base to support them, and I believe the Penguins are well-positioned for the future."
The Penguins, like many NHL teams, have come a long way since the late 1990s and 2000s when a host of teams filed for bankruptcy protection.