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Cook: Baldwin's zeal led Penguins, NHL to ruin

Monday, February 17, 2003

The voice on the telephone was quiet, sad. "You're going to carve me up again, aren't you?" Howard Baldwin asked from Los Angeles.

Well, yeah.

Is anyone more responsible for the dire financial straits of not just the Penguins, but the entire NHL?

Baldwin cared deeply about the Penguins and their fans and, for a time in the 1990s, was the city's most beloved sports owner. But no one knew at the time he was keeping a winning team together by giving huge contracts to Mario Lemieux, Jaromir Jagr and so many others that he didn't have the money to do the deals. It wasn't until the franchise filed for bankruptcy in October, 1998, that we realized just how reckless and foolish many of his decisions were with the players, with Spectacor Management Group, with Fox Sports Net Pittsburgh and with city and county officials.

Baldwin also must take blame for the NHL's rotten state. His free spending helped drive up player costs; the average salary is more than $1.6 million. He also was one of a few owners to vote against a lockout at the start of the 1994-95 season, then pushed for an onerous settlement after a 100-day work stoppage. If the owners had been able to break the union then, the league might not be facing a situation in which the Buffalo Sabres and Ottawa Senators also have gone bankrupt and more than two-thirds of the teams are expected to lose money this season.

How do you not carve away at that guy?

Baldwin, who runs a movie production company, acknowledged his hunger to have a winning team clouded his thinking at times. In a stunning admission, he said he reacted to big deals given to Anaheim's Paul Kariya and Philadelphia's Eric Lindros by overpaying Jagr with a $48 million contract in '97 against his better judgment and even as the team was hemorrhaging money.

"We have met the enemy and it is us," Baldwin said of the NHL owners. "We were all drinking the same Jimmy Jones Kool-Aid. How stupid was that?"

But Baldwin refused to second-guess the contract that started his problems -- Lemieux's six-year, $42-million deal after the '91 season. In Baldwin's defense, that contract would have turned out better if Lemieux hadn't had to sit out the 1994-95 season to recover from cancer treatments and then retired prematurely after the 1996-97 season.

"Mario might have been the only player who put people in the seats," Baldwin said. "A player like that should be paid the most."

Baldwin said he feared a "predator strike" -- a big-market team swooping in and making an offer for Lemieux that the Penguins couldn't have matched.

"Do you know what would have happened if I had let Mario go after the team had just won the Stanley Cup?" Baldwin asked.

"No, I'll never regret that contract. As for anyone who says that started the league's problems, they're naive. There's only one Mario. If the other owners listened to the agents who said that contract was the standard, that's their fault."

But Baldwin never quite could afford to pay Lemieux. He repeatedly had to ask Lemieux to defer money. By the time the franchise filed for bankruptcy, it still owed Lemieux more than $30 million.

Faced with an uncertain future because of Lemieux's retirement and still feeling the pain from the killer work stoppage, Baldwin had to bring in Boston millionaire Roger Marino as a new partner in '97. Marino still must regret the day. He later said he didn't realize just how bad many of Baldwin's decisions were.

Although the contract with SMG, which managed Mellon Arena, was cited as the overriding cause of the bankruptcy, it was Baldwin's deal with the city and county that still could force the Penguins out of town. In '97, he accepted a $12.9 million Band-Aid for club seats and other improvements at the arena instead of jumping on the Plan B bandwagon with the Pirates and Steelers, who built terrific new facilities.

"There was talk of new stadiums then, but no guarantees," Baldwin said. "I thought it was important to add the club seats without adding to our debt service. Those club seats are good seats. The arena isn't the problem there."

Told that team officials say the Penguins' only chance of staying in Pittsburgh is a new building, Baldwin said, "You're not talking to them now. You're talking to me. I've never believed a new arena will solve all of the problems. Look at Kevin McClatchy. How much did the Pirates' attendance drop off from year one to year two at their new ballpark?

"The arena isn't the problem. The problem is we've ended up gouging our local markets. People can't afford to keep paying those ticket prices night after night. Teams have to get their payrolls down."

That might have happened in '94 if the owners had been stronger. Baldwin said he had to vote for a settlement after the Penguins lost $25 million because of the work stoppage.

"As owners, we were totally unprepared. It will be different this next time. The owners will be prepared and committed [for a labor war in 2004]. I just hope the small-market clubs like Pittsburgh rule the day because that's the only way the league will survive."

Baldwin said it wasn't his decision -- but Marino's -- to file for bankruptcy. "I thought we still could have made it work. Other teams were losing more than us. But you had a situation where one owner didn't want to put more in and the other couldn't."

Only after a long pause did Baldwin predict that the Penguins will survive these terrible times.

"I just hope that everyone back there -- the mayor and the politicians -- gets behind Mario. The hockey fans there deserve it. They probably don't think much of me, but they're great fans."

It's no wonder Baldwin is rooting so hard for the Penguins.

If they don't make it, his fingerprints will be all over the corpse.


Ron Cook can be reached at rcook@post-gazette.com or 412-263-1525.

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