Pittsburgh Penguins Bankruptcy and Other Notable Bankruptcies in Sport

By Lisa Spencer Senior Editor Updated: 16 January 2023

Lisa Spencer Senior Editor

As a Senior Editor at Betting.US, Lisa Spencer is a valuable member of our expert team. With a Master’s degree in Applied Mathematics, Lisa is adept in gambling theory and analyzing odds. She contributes by writing online sportsbook reviews and finding competitive markets to help our readers make an informed choice.

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Pittsburgh Penguins Bankruptcy

• Famous Bankrupt Sports Franchises
• The Pittsburgh Penguins Bankruptcy
• What Happened To The Cleveland Barons?
• The Seattle Pilots Bankruptcy
• What Happened in 1993?
• The LA Kings
• Who Else Went Bankrupt?
• Commonly Asked Questions

The Pittsburgh Penguins bankruptcy shook up the sports world, and, unfortunately, a number of other brands have also gone bust. On this page, we’re going to look at some of the most notable sports franchises that have gone bust – along with the reasons why.

Cleveland Barons and More Doomed Brands

The Pittsburgh Penguins bankruptcy, as we just mentioned, was a major turning point in the sports world; fans realized that no team or brand was immune, and other major franchises – including the Cleveland Barons – also failed to continue generating enough revenue. The rest of this article will look at why these companies went bust – and how it changed the sporting world forever.

The Pittsburgh Penguins

The Pittsburgh Penguins, a professional ice hockey team based in Pittsburgh, Pennsylvania, declared bankruptcy in 1998 owing to financial difficulties. One big cause was the team’s poor performance on the ice, which resulted in lower ticket sales and income. The Penguins also had a large payroll and were unable to produce enough money to fulfill their costs.

The team’s leasing deal with the Civic Arena, where they played their home games, was another issue. The agreement forced the Penguins to pay the venue a portion of their ticket sales, putting further burden on the team’s finances.

Aside from these internal concerns, the Penguins faced external obstacles such as rising competition from other local sports clubs and a deteriorating local economy. All these circumstances conspired to form a perfect storm, resulting in the team’s bankruptcy.

The Penguins took a variety of cost-cutting initiatives in an attempt to recover from their financial difficulties. These included lowering player compensation and liquidating assets like the team’s practice facility. The squad also tried to enhance their on-ice performance, which helped to increase ticket sales and income.

Despite these attempts, the Penguins were unable to achieve financial stability and were finally forced to declare bankruptcy. However, with the assistance of a new ownership group and excellent management, the team was able to recover and re-establish itself as a successful brand. Today, the Pittsburgh Penguins are regarded as one of the best teams in the National Hockey League, with a devoted fan base. Those who wager on NHL games will be fully aware of the Penguins being contenders in recent campaigns.

The Cleveland Barons

From 1976 to 1978, the Cleveland Barons were a professional ice hockey club that competed in the National Hockey League (NHL). When the Oakland Seals relocated to Cleveland and was renamed as the Barons, the team was formed. Despite the new name and location, the team struggled on and off the ice, eventually going bankrupt.

The fact that the club played at the Cleveland Arena, an aging stadium with little facilities, was a big factor in their financial difficulties. The arena had a tiny seating capacity and was in a less attractive section of town, making it difficult for the team to generate cash from ticket sales. Furthermore, the squad had difficulty attracting corporate sponsorships and other types of funding.

Another element that contributed to the team’s collapse was its lack of success on the ice. The Barons had a bad record and struggled to compete with other NHL clubs. This resulted in lower attendance and more financial difficulties.

In 1978, the Barons joined with the Minnesota North Stars in an attempt to rescue the franchise. However, the combination was unable to keep the team solvent, and the Barons declared bankruptcy later that year. The merger eventually resulted in the formation of the Dallas Stars, who are still a successful NHL club today.

Despite the collapse of the Cleveland Barons, the city has continued to promote hockey and is currently home to the Cleveland Monsters, an American Hockey League minor league club.

Seattle Pilots Bankruptcy

The Seattle Pilots were a professional baseball team who played one season in Major League Baseball (MLB) in 1969. Despite a large fan base and some on-field success, the team suffered financially and eventually declared bankruptcy.

The absence of a proper stadium was a key element in the team’s financial difficulties. The Pilots played their home games at Sick’s Stadium, which was an old and run-down venue. The stadium had a tiny seating capacity and was in a bad section of town, making it difficult for the team to earn cash from ticket sales.

In addition to stadium concerns, the Pilots struggled to garner corporate sponsorships and other types of funding. The team was owned by a group of local investors who were unable to furnish the franchise with the requisite financial resources.

Despite these obstacles, the Pilots were able to create a competitive squad and even make the playoffs in their inaugural season. However, the team’s financial difficulties were too great to overcome, and they were forced to declare bankruptcy in 1970.

After the Seattle Pilots declared bankruptcy, Bud Selig acquired the team and transferred it to Milwaukee, renaming it the Milwaukee Brewers. The Milwaukee Brewers are now a successful MLB organization with a devoted fan base. Those who use sportsbooks with MLB will be well aware of this franchise.

1993 Baltimore Orioles

The Baltimore Orioles are an American League baseball franchise that has been in existence since 1901. Despite its lengthy history and on-field success, the team has not always been financially secure and has threatened bankruptcy on several occasions.

One key contributor to the team’s financial difficulties has been its failure to produce adequate income from ticket sales. The Orioles have frequently struggled to fill their stadium, especially in recent years, resulting in a decline in income. Furthermore, the team has competed with other sports teams in the region and has failed to gain corporate sponsorships and other types of money.

The hefty expense of player salaries has also contributed to the team’s financial difficulties. The Orioles’ salary has frequently been excessive, putting a strain on the team’s budget. To solve this issue, the team has been forced to make painful decisions, such as moving away great players or dismissing high-priced players.

Despite these difficulties, the Orioles have always found a way to recover and remain a profitable club. The club has made a strong effort in recent years to improve its financial status through cost-cutting initiatives and increasing income creation. Despite ups and downs along the way, the Orioles are still a cherished club in Baltimore and are prepared to continue their success on and off the field.

1995-96 Los Angeles Kings

The Los Angeles Kings were a professional ice hockey team that competed in the National Hockey League from 1995 to 1996. Despite having a large fan following and some on-ice success, the team suffered financially and eventually declared bankruptcy.

The high expense of player compensation was a big contributor to the team’s financial difficulties. The Kings offered a large salary, which strained the team’s finances. Aside from player salary, the club faced other significant costs such as stadium rent and team travel.

Another aspect contributing to the team’s financial difficulties was a lack of income creation. The Los Angeles Kings failed to sell tickets and acquire corporate sponsorships, which exacerbated their financial problems.

Despite these obstacles, the LA Kings were able to stay in business for several years because of the backing of its owner, Bruce McNall. However, McNall was convicted of fraud in 1995, forcing the squad to declare bankruptcy.

Following the bankruptcy of the Los Angeles Kings, the club was bought by Philip Anschutz and Ed Roski, who helped to stabilize the organization and return it to financial health. The LA Kings are now a thriving NHL organization with a devoted fan base.

Other Notable Bankruptcies

Several other notable franchises also went bust – as you’ll see from the table below. While each team has its own reasons for going bankrupt, there are several trends which are commonly seen.

Sports franchises, like any business, can go bankrupt for a variety of reasons. One common factor is a lack of revenue. This can be due to poor performance on the field, which leads to declining ticket sales and difficulty attracting corporate sponsorships. Additionally, sports franchises can struggle to generate revenue if they play in an outdated or poorly maintained facility, or if they are located in an undesirable location.

Another factor that can contribute to the financial struggles of a sports franchise is high expenses, particularly high player salaries. Teams that have a high payroll may struggle to generate enough revenue to cover their expenses, which can lead to financial difficulties.

External factors, such as the local economy and competition from other sports teams, can also impact the financial health of a sports franchise. If the local economy is struggling, it can be more difficult for a team to generate revenue through ticket sales and corporate sponsorships. Similarly, if there is a lot of competition from other sports teams, it can be challenging for a team to stand out and attract a dedicated fan base.

Below, you can see a few other teams which went bust – along with the reason why.