Billionaire investor the 'power' in Pens' arena play
When the principals gathered last week at the State Office Building, Downtown, to discuss a new arena for the Penguins, two powerful men greeted each other with a handshake forged by years of familiarity.
Gov. Ed Rendell and Penguins co-owner Ronald Burkle, a California billionaire, have worked together for years.
Burkle donated $50,000 to the Democratic National Committee when Rendell served as chairman. Two years later, Burkle gave $10,000 to Rendell's first gubernatorial campaign. According to federal records and news reports, Burkle has donated more than $1 million to Democrats and helped raised $50 million from others for the party.
"It is easier when you know who you're dealing with," said Philadelphia lawyer Alan Kessler, a leading Rendell fundraiser. "When you know who it is requesting a meeting on something like this, it helps in terms of credibility."
That relationship does not guarantee a sweetheart deal for the Penguins, Kessler said.
"Business is business," he said.
Neither Rendell nor Burkle would discuss their relationship for this article. David Morehouse, a Burkle confidant hired to help the Penguins get an arena, also declined to comment.
No one will discuss what happened during the 75-minute meeting last week. But it appears the deal will be better than Rendell's original offer, called Plan B. That $290 million proposal would build an Uptown arena financed over 30 years with $14.5 million a year in gambling money, plus undetermined contributions from the Penguins.
"Ed Rendell is one of the savviest governors and dealmakers in the country," said former Virginia Gov. Mark Warner, a Democrat. "When it comes down to negotiating terms, Ed Rendell will make the best deal possible for the commonwealth of Pennsylvania."
Burkle sees himself as the anti-Mark Cuban, the wealthy, outspoken Mt. Lebanon-born owner of the Dallas Mavericks of the National Basketball Association, associates say.
Instead, Burkle keeps out of day-to-day team management and never would show up rink-side in a Penguins T-shirt or face paint, a spokesman said. In a rare moment, Burkle helped throw the coming-out party last season for forward Sidney Crosby by flying in Christina Aguilera to sing the national anthem at Mellon Arena.
But the billionaire has obliged whenever Mario Lemieux has asked for help. Burkle invested an estimated $20 million to save the team from bankruptcy in 1999 and last year helped negotiate the offer from Isle of Capri Casinos to build an arena with slots money.
Now Burkle is using his connections to help Lemieux keep his commitment to Pittsburgh. One strategy involves using a new arena in Kansas City as leverage to win a better deal in Pittsburgh.
"Ron is being loyal to Mario, and Mario is being loyal to Pittsburgh," said Frank Quintero, Burkle's spokesman.
For Burkle, it's all about making money and getting a return, said Matthew Miller, an associate editor at Forbes magazine who spent three years working on a Burkle profile.
"They're laying the groundwork for the right deal, not the quick sale," Miller said. "A potential buyer in Pittsburgh would probably pay a premium for the team, and Ron would be aware of that."
Burkle, 54, the son of a grocery store manager from Pomona, Calif., went from owning small grocery chains to controlling large ones. He manages four private equity funds worth $4 billion and holds shares in 35 companies, Forbes estimated.
With a personal fortune estimated at $2.5 billion, Burkle turns up in many people's sights.
His former wife has accused him of cheating her out of a fortune. And she said Burkle had her former boyfriend, an ex-convict, followed.
Over the past five years Burkle has been mentioned in the New York Post's Page Six gossip column more than 20 times. Internet media blog Gawker.com has written about Burkle more than 50 times since March.
Now Burkle wants to become a media mogul. In November, his investment firm, Yucaipa, made a bid for the Tribune Co., whose holdings include the Chicago Tribune and Los Angeles Times.
In political circles, Burkle remains best known as an FOB, or friend of Bill Clinton.
"It is absolutely true that they are close, very close, friends," said David Matter, president of Oxford Development and Clinton's college roommate. "They are also business associates. The (former) president has great affection for Ron Burkle."
Forbes reported that Clinton has a permanent guest room at Burkle's Beverly Hills mansion and that Clinton has stayed in that room every time he has visited Los Angeles since 1992. Often when he travels, Clinton flies on "Air Ron" -- Burkle's luxuriously appointed 757 jet.
Not a hockey guy
Burkle and Lemieux met in Florida, said attorney Doug Campbell, who represented the former player during the Penguins' 1999 bankruptcy. They were introduced by Tom Reich, one of Lemieux's agents.
Soon after, Burkle agreed to join Lemieux's bid for a team ownership group.
"He wasn't a hockey guy," Campbell said. "But he expressed an interest, and that was pretty significant because we needed to raise $50 million and getting him was the foundation for the reorganization plan."
Burkle's stake in the Penguins is thought to be $20 million, making him the lead investor. Lemieux put in $5 million cash and has a $20 million equity stake. While the popular Lemieux often serves as the franchise's public face, it's clear Burkle plays more than a passive role.
The Penguins' visit to Kansas City on the eve of talks in Pittsburgh bears the mark of classic Burkle deal-making, said Miller, the Forbes editor.
Burkle is a friend of Tim Leiweke, the president of AEG, which will operate the new Sprint Center arena in Kansas City. AEG offered the Penguins a partnership for arena revenues and free rent.
The Penguins' interest in Kansas City could strengthen the city's bid for a future franchise.
"(Burkle) certainly has a history of using political connections to further business deals," Miller said. "That's undisputed."
Ronald Wayne Burkle
Local ties : An estimated $20 million cash investment in the Penguins
Net worth : $2.5 billion (Forbes estimate)
Born : Nov. 12, 1952, in Pomona, Calif.
The skinny : Founder of Yucaipa Cos., a holding company that invests in supermarket and grocery chains. Former President Clinton, a close friend of Burkle, is an adviser to the company. Burkle reportedly helped raise $50 million for the Democratic Party in recent years. Has given more than $100 million to philanthropic efforts in the past 10 years. ... Divorced. ... Is a college dropout. ... Teamed with entertainment giant AEG in an attempt to return an NFL franchise to Los Angeles earlier this decade. ... Paired with fellow multibillionaire Eli Broad in an attempt to purchase the Tribune Co., which owns the Chicago Tribune and Los Angeles Times. ... Has been mentioned more than 20 times in the past five years on the New York Post's infamous Page Six. ... Celebrity associates include Clinton, actors Leonardo DiCaprio and Michael J. Fox, and hip-hop artist Sean 'Diddy' Combs. ... In addition to his La Jolla mansion, he owns a noted Beverly Hills estate dubbed 'Green Acres.'
Show commenting policy
TribLive commenting policy
- Q&A: New coach Johnston feeling at home with Penguins
- Despite management change, familiarity reigns for Penguins prospects
- Recchi rejoins Pens, this time as a coach
- Stockpiling talented forwards becomes a priority for Penguins
- Penguins notebook: Annual development camp scrimmage slated for Saturday
- Penguins sign Despres to 2-year deal