The Pittsburgh Penguins, and David Morehouse, push to stay ahead of the curve

 

If David Morehouse was only running a hockey team, his job with the Pittsburgh Penguins would be much less challenging.

“We’ve never been charged with just winning the Stanley Cup and just running a hockey team. We’ve always had the ambition to create a longer-lasting impact,” says the team’s president and CEO.

For example, a few months ago, Morehouse was going 100 miles an hour and spending 85 percent of his time on the new mixed-use development plan for the 28-acre site of the old Civic Arena, which is expected to attract $750 million in private investment.

The owners, led by Mario Lemieux and Ron Burkle, want to be the best organization in sports and contribute to the community in significant ways — in addition to succeeding on the ice.

“As an ownership group, they’ve never said no to anything that we’ve asked that would improve the team,” Morehouse says.

That includes a cryogenic machine in the practice facility, a full-time elite trainer and being one of two NHL teams to pay a doctor to travel with the team.

All of those competitive advantages add up. Morehouse and his staff also have built a culture that treats players so well that the Penguins often hear from free agents that Pittsburgh is the best place to play.

“We’re capped on how much we can pay them, but we’re not capped on how well we can treat them,” he says.

That ability to treat others well translates to the fans, too.

“They invest their heart and soul in the team. You have to think about them in ways that you wouldn’t if they were just customers,” Morehouse says. “They are invested in what we do. They believe it’s we — it’s not us and them — so we treat our season ticket holders and we treat our fans as stakeholders.”

Leading the way

A strong culture and a brand that’s well-respected in the community are things Morehouse modeled after the Steelers. He grew up in Pittsburgh in the 1970s when the team — and its winning culture — was the heart and soul of the region.

Before coming back to Pittsburgh, Morehouse was the traveling chief of staff when John Kerry ran for president. But after a two-year stint as a senior consultant on the team’s new arena project, ownership asked him to become president.

“I came into the job without having had experience running a hockey team, and I actually think that was a strength,” he says.

For example, the Penguins were the first to install a video screen outside the arena during playoffs. Morehouse says NBC was upset and the NHL wanted to fine the team, but today it’s part of hockey.

More than a decade later, Morehouse has to push himself to be as inventive as he was when he knew nothing — by looking for new partnerships with innovative companies.

“My challenge is how do we continue to run the team in an innovative way, so that our team that was innovative remains ahead of the curve on things. That’s why we’re working so much with universities,” he says.

During spring break, for instance, the Penguins did a makeathon with Covestro and Carnegie Mellon University. Students looked at how the skeletal composition of rams and woodpeckers helps dissipate impact. Morehouse says they ultimately redesigned the team’s goalie mask to make it safer, and now he wants to partner with a hockey equipment company to test it.

This past offseason, the executive team also focused on the generational switch. They met with consultants who have expertise in millennials and Generation Z to discuss the differences between these groups and Generation X and baby boomers.

“We’re taking a hard look at how the world is changing around us,” Morehouse says.

The team’s ability to stay ahead of the curve is demonstrated with the UPMC Lemieux Sports Complex in Cranberry Township — a first-of-its-kind facility combining an NHL practice rink with a world-class medical center.

Morehouse says players can go straight from the locker room to an MRI, X-ray or CT scan, with access to concussion experts and top sports medicine doctors. In addition, fans who are rehabbing at the complex can watch the Penguins practice.

The facility is also used by youth teams. And when Morehouse’s son, who was 14 at the time, lost an edge, went headfirst into the boards and knocked himself out, within a few minutes he was seen by the same concussion expert who works with players.

“That facility alone, in partnership with UPMC, has spurred all kinds of economic development around it. It’s becoming known as the best facility in the country,” he says.

This summer, for example, a prototype of safer boards, which react to the puck the same way but give when impacted by a larger mass, was installed in a section of the practice rink.

Working together

Partnerships are a key component of the Penguins’ culture. They not only help the team stay innovative but help in its mission to impact the greater community.

Morehouse says the team built 12 deck hockey rinks around the region with Highmark, and it has put gym hockey equipment in more than 600 schools through a FedEx partnership. This year, the Penguins also provided 2,000 children with free hockey equipment, courtesy of donations from the team, Dick’s Sporting Goods, Sidney Crosby and Adidas.

“We’ve always looked at corporate partners not as corporate sponsors, but as corporate partners. We don’t just sell them on our brand. We ask them what their needs are,” he says.

If a company wants more brand presence in the region, it could build a playground, but it would get limited media coverage, Morehouse says.

“They do it with us, we have 2 million Twitter followers. We put it on our website. We put it on Instagram. We bring local news,” he says, adding that when people see other people doing something good, it spreads.

These relationships don’t always have to do with people who give the team money, though, Morehouse says.

“I just had someone call me from another team who said, ‘We’re thinking of outsourcing our naming rights — it was in another sport — and outsourcing our corporate sales.’ And I said, ‘Well, that would be the exact opposite of what we’ve done.’ What we’ve done here is we’ve built relationships, and those relationships don’t just pay dividends in sponsorship dollars. They pay dividends when a board member from that company introduces me to a new CEO of another company and they’re interested in our real estate, or they’re interested in our foundation,” he says.

Morehouse, who knows the value of long-term relationships from his background in politics, is also seeing the dividends with the team’s development on the former Civic Arena site. After the plans were announced in March and the project kicked off with the I-579 cap to reconnect the Hill District, many local and national businesses reached out.

Juggling priorities

Deciding where to partner — to keep the brand strong — is more art than science. It’s based on personal interaction and face-to-face meetings more than analytics, Morehouse says.

“We work on having lunches with people, meeting people, bringing them to the games, bringing them on the road with us and building relationships. And we don’t go in the first meeting with a pitch,” he says.

It also comes back to using the Penguins as a platform to do something good, like when the Penguins raised $700,000 in two weeks after the Tree of Life shooting, which it gave to the Jewish Federation and first responders.

Another initiative is to try to get the city to build an indoor rink in Shadyside. All of the existing rinks are in the suburbs, and Morehouse says the team wants to get more diversity in hockey, including minority communities.

However, having such a broad scope — such as spearheading a mixed-use development — can stretch resources, even with strong executives on the business side and an unparalleled hockey operations staff, he says.

When he has a choice, Morehouse has learned to match people with their counterparts to prioritize his time. If a vice president of marketing is coming in, then the team’s vice president of marketing meets with him or her. If it’s a CEO, or deal closing or relationship opening time, Morehouse steps in.

“I bring Mario and Ron into meetings when we need them. We bring them off the bench if we need the heavy hitters. And we have other owners that play roles, too,” he says.

But overall, it’s a group effort, because the organization’s success comes from above and below, Morehouse says.

“I have an ownership group that looks at the team as a long-term value play — it doesn’t try to squeeze every nickel out of everything — and wants to win, more than anything,” he says. “And they want to make a long-lasting impact on the community.”

The executive team under him is in complete alignment and understands the mission, the values, the brand and how the Penguins do business, Morehouse says.

“I could step back and fall asleep for three months and this place would still operate very well because it has very good people in charge that own it and run the individual departments,” he says.

 

Takeaways:

  • It doesn’t cost anything to treat your stakeholders well.
  • Go into your partnerships with an open mind.
  • Bring external innovators in to stay on the cutting-edge.

 

Morehouse timeline

December 2004  David Morehouse joins the Penguins as senior consultant on the team’s new arena project.

March 2007  Morehouse and ownership reach a deal with local and state officials to fund a new Pittsburgh arena.

April 2007  Morehouse named team president by co-owners Mario Lemieux and Ron Burkle.

April 2008  The Penguins sell out every game (41) in the regular season for the first time in franchise history. This begins a streak of 12 straight sellout seasons.

June 2008  The Penguins reach the Stanley Cup Finals for the first time since 1992 but lose in six games to the Detroit Red Wings.

September 2008  Morehouse and his staff arrange for players, including star center Sidney Crosby, to personally deliver tickets to the homes of some season ticket holders. This unique outreach program is now in its 12th season.

Fall 2008  Sidney Crosby’s Little Penguins Learn to Play Program (free equipment, including skates, for kids ages 4 to 9) begins. The program has introduced more than 1,500 players to the sport.

June 2009  The Penguins win the Stanley Cup, clinching the title with a Game 7 victory in Detroit.

August 2010  The Penguins’ new arena, CONSOL Energy Center, opens to rave reviews with a concert by Paul McCartney.

August 2010  Lemieux and Burkle add CEO to Morehouse’s title.

September 2010  Morehouse has the Penguins schedule an extra home preseason game and distributes all 18,000 tickets to area youth. The “Free Game for Kids” is now a Pittsburgh tradition.

March 2012  The Penguins partner with the Pittsburgh Hornets amateur hockey association and Dick’s Sporting Goods to create a new era of AAA hockey. By the 2018-19 season, the Penguins Elite had 22 teams (14 boys, eight girls) and had won three USA Hockey Tier 1 National Championships (two boys, one girls) since 2015.

September 2013  The Penguins rank No. 1 in “Fan Relations” in the NHL, according to the ESPN Ultimate Standings.

June 2014  The Penguins hire Jim Rutherford as general manager.

August 2015  One of Morehouse’s grand visions comes to life with the opening of the UPMC Lemieux Sports Complete in Cranberry Township, Pennsylvania — a first-of-its-kind facility combining an NHL practice rink with a world-class medical center.

June 2016  The Penguins win the Stanley Cup, defeating San Jose in the Finals. Rutherford is named NHL GM of the Year.

October 2016  Morehouse and his staff sign a new 20-year naming rights deal with PPG to change the arena’s name to PPG Paints Arena.

June 2017  The Penguins become the first NHL team in 20 years to win back-to-back Stanley Cups, clinching the title in Game 6 at Nashville.

August 2017  The EXCEL Hockey Academy forms as a partnership between North Catholic High School and the sports complex. In 2018-19, 55 high school students trained in the academy with 150 total participants between the high school, middle school and grade school programs.

March 2019  Morehouse and the Penguins announce a mixed-use development plan for the 28-acre site of the old Civic Arena, expected to attract $750 million in private investment.