A limited partner of the Pittsburgh Penguins is attempting to block the team from joining the vaunted roster of Fenway Sports Group.

Wildfire Productions filed a lawsuit, saying that majority owners Ron Burkle and Mario Lemieux actively denied limited partners from collecting information and providing input on the deal.

“Through clandestine back-room maneuvering, Mr. Burkle and Mr. Lemieux are orchestrating an unlawful cash-out for themselves, while steamrolling and freezing out their Limited Partners, including Wildfire,” the company wrote.

• In November, Fenway Sports Group agreed to buy a controlling stake in the Penguins reportedly for around $900 million.
• The deal received unanimous approval from the NHL’s board of governors on Dec. 9.

The Penguins brushed off the suit, saying “This is a regrettable situation where a single limited partner is claiming rights to which they are not entitled.”

The team also noted that Wildfire is receiving five times its original investment, and that the stake value “increased over 12 times as a result of this transaction.”

A Growing Portfolio

Fenway also owns the Boston Red Sox, Liverpool F.C., Roush Fenway Keselowski Racing, and a majority stake in the New England Sports Network.

In March, RedBird Capital Partners invested $750 million in Fenway at a $7.35 billion valuation. LeBron James and Maverick Carter followed suit later that month at an undisclosed amount.

Chelsea FC reported its full-year earnings on Thursday, recording a post-tax loss of $196.4 million for the year ending June 30, 2021.

The year prior, Chelsea posted $49 million in profit. The club attributes the loss to “matches taking place behind closed doors as well as decreased profit on players’ sales and increased player amortisation.”

Matchday income fell $62 million to $9.7 million. 

“Had it not been for the matchday impact of the pandemic, we are confident we would have achieved record turnover this year,” club chairman Bruce Buck said. Buck believes COVID-19 will continue to impact the club’s finances.

Chelsea isn’t the only European soccer club that reported losses during the same period.

• Juventus lost $246.6 million, with revenue declining 16% year-over-year to $565.1 million.
• Manchester United posted $126.8 million in losses for the year.

Chelsea’s broadcasting revenue grew from $246.3 million to $369.3 million thanks to the delayed 2019-20 season and the club’s success in the Champions League. 

Chelsea’s Future

During the year, Chelsea replaced manager Frank Lampard with Thomas Tuchel, who signed an extension in June.

Chelsea’s accounts say the club is “reliant on Fordstam Limited for its continued support” and will be for the “foreseeable future.” The team’s parent company is owned by Roman Abramovich.

The historic Discovery-WarnerMedia mega-merger will be able to proceed as structured after it received approval from the IRS.

The $43 billion deal will bring together WarnerMedia’s Turner Sports, TNT, TBS, CNN, Warner Bros., HBO, and Discovery’s Eurosport, Food Network, HGTV, and others. 

Discovery also has the rights to the Olympics across Europe through 2024 in a six-year, $1.5 billion deal, and is reportedly in talks to form a joint venture with BT Sport, which holds U.K. Premier League rights.

On Wednesday, WarnerMedia-owner AT&T revealed that the deal received a favorable rating from the IRS as a “Reverse Morris Trust,” a transaction type designed to be tax-free for shareholders.

• Under a Reverse Morris Trust, AT&T will first spin off WarnerMedia before merging it with Discovery.
• To remain tax-exempt, AT&T shareholders must retain a majority stake in the company. As currently structured, they will receive 71% of the new company’s shares and be able to name seven of 13 board members.
• Discovery CEO David Zaslav and CFO Gunnar Wiedenfels will run the new company.

Not a Done Deal

While the merger received the blessing of the European Commission earlier this week, Democratic lawmakers wrote to the Department of Justice this month asking for close scrutiny of the deal. 

If completed, the combined entity will be worth around $130 billion and hold broadcast rights to the NBA, NHL, and Olympics.