Before the Pittsburgh Sports & Exhibition Authority approved the transfer of the lease to the Penguins’ home, PPG Paints Arena, to the Hoffman Family group at a public meeting Thursday, Pittsburgh officials voiced their dismay at FSG, which also owns the Red Sox and Liverpool FC. The SEA asked for FSG to divert “a small percentage of its enormous return” to the Penguins arena’s capital reserve account in part to make good on commitments it said the team made and did not deliver on for investments in the Lower Hill neighborhood.
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“To date, FSG has refused to do so, although FSG’s refusal to live up to its promises does not provide the SEA board with the right to deny its approval of this transaction,” said SEA executive director Aaron Waller, according to multiple reports. “The board is deeply disappointed in FSG profiteering from this community and its refusal to honor its promises to the people of the Lower Hill.”
Asked to respond to the allegations of not making good on commitments and also if FSG would send a portion of its profit to the city, a spokesperson sent a statement: “FSG has fully complied with its obligations under the lease throughout its tenure, and we appreciate the unanimous vote by the SEA and their engagement as we continue to move the transaction forward.”
A law firm retained by the SEA, which approved the sale of the Penguins to FSG in 2021, reviewed the latest Penguins sale documents and concluded that “the lease requirements for an assignment have been met.”
There is no provision in the lease that speaks to FSG returning a portion of the sale proceeds to the SEA.
The obligations brought up by the SEA this week were assumed by FSG when it bought the team, and will transfer to the new owners when the sale is complete. According to a source with direct knowledge of the relationship between the Penguins and SEA during FSG’s ownership, the reportedly “unmet” obligations have been a topic of discussion that has not been clarified to either side’s satisfaction.
Both SEA and FSG made capital repairs over the last four years, with FSG paying $6 million a year in rent.
In a statement, Allegheny County executive Sara Innamorato said, “[FSG] alienated allies and fans and wrung every dollar out of a public asset and public land to make a $800 million profit with little investment back into the community and Penguins fans. FSG is able to get away with that because when leases are negotiated, the public is often forced to choose between keeping their team in Pittsburgh or protecting precious tax dollars. We will make every effort to negotiate better leases going forward.”
A representative of the Pittsburgh SEA did not immediately respond to a request for further comment.
John Henry, the principal owner of FSG, owns the Globe.
Michael Silverman can be reached at michael.silverman@globe.com.