Thread by @JoePompliano

The Pittsburgh Penguins were recently acquired by Fenway Sports Group for about $900 million.

The interesting part?

A former Penguins player is set to make over $350 million from the deal because of one negotiation in 1999.

This is the wild story 👇

1) First, some history.

After a remarkable career in the Quebec Junior Hockey league, Mario Lemieux was selected #1 overall by the Pittsburgh Penguins in 1984.

He signed a 2-year deal for $600,000, with a $150,000 signing bonus, and got to work.

2) Mario Lemieux went on to have a legendary career.

He played for 17 seasons, scored over 750 goals, had 1,200+ assists, and brought home two Stanley Cups in 1991 & 1992.

But that's only part of the story...

3) Penguins ownership saw their business collapse throughout the 1990s.

Revenue crashed while expenses tripled, and with $100M in debt, the team was forced to declare bankruptcy in 1998.

Their largest creditor?

Mario Lemieux, who was owed over $26 million in deferred salary.

4) But rather than chase pennies on the dollar in court, Mario Lemieux came up with a brilliant solution.

Lemieux offered to buy the team with an investor group, financing his part by converting $20M of his deferred salary into equity.

Once done, Lemieux owned 25% of the team.

5) Since buying the Penguins in 1999, Mario Lemieux and his ownership group have revitalized the franchise.

Annual revenue is up from $55M to $185M, they've built a new arena and have locked in lucrative cable deals.

Even better?

They also won 3 more Stanley Cup trophies.

6) The Penguins recently ended a 633 game sellout streak that lasted more than 14 years.

And Mario Lemieux is the only person in NHL history to have their name on the Stanley Cup as both a player and owner.

The franchise is now one of the NHL's strongest.

7) Mario Lemieux increased his equity stake over the years & is expected to stay as a small minority owner after the sale.

But at a $900M valuation, that means Lemieux turned his $26M deferred salary into roughly $360M.

That makes it one of the best athlete investments ever.

8) Mario Lemieux's deal to buy the Penguins might seem like a no-brainer now, but that wasn't always the case.

Lemieux found leverage & got creative, incentivizing himself with uncapped upside and turned a bad situation into an incredible investment.

As they say, equity is key.

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If you want to dig deeper into the details, this is a great breakdown of the 1999 negotiation.

washingtonpost.com/wp-srv/sports/…