It got so bad that in early 1993 the team was near death. And at that point Russia's—and perhaps the world's—greatest hockey coach, the dour, dignified Viktor Tikhonov, 63, who had led CSKA to 13 national titles and the national Olympic team to three gold medals, faced the painful realization that life as he had known it was changed forever. There was nothing CSKA could do but sell a piece of the team to the highest bidder. "It would have been easier just to quit," Tikhonov said recently, "but I am a battler."
He and a handful of Russian Army officers traveled to Montreal last February for the NHL All-Star Game. They were in search of a white knight to bail them out, and they found one. Howard Baldwin, the often unorthodox chairman of the Pittsburgh Penguins, listened at a breakfast to the pitch from Tikhonov & Co., and as Baldwin says, "I was intrigued by the deal, but I didn't quite know why. It was a sort of fantasy of the hunt. We knew that there was knowledge to be gained by having this foothold in Russia, but we didn't know exactly what knowledge."
Despite his puzzlement and the still-pending legal action over Natchkhebia's management, Baldwin went ahead. He formed an investors' group called Penguin Army International Ltd., which included actor Michael J. Fox, and put up more than $1 million to buy a 50% interest in the CSKA hockey team and a management contract to run the Ice Palace. From that moment on, the grand old team was called the Russian Penguins, with the overly cute new cartoon logo—"a hip-looking bird," says Steven Warshaw, the former IMG marketing agent for Joe Montana and Wayne Gretzky who is now vice-president of marketing for the Russian Penguins.
With Baldwin's management contributions and Warshaw's marketing smarts, the team has gotten some solid sponsorship capital from Iron City premium beer ($600,000 over three years) and Canadian sports-equipment giant CCM ($300,000 over three years), while some of the U.S.'s heaviest corporate hitters—McDonald's, Kraft, Coca-Cola—have put up a lot of dough to plaster their names on such things as pads and gloves ($32,000) and the Zamboni ($20,000). There are also luxury suites in the Ice Palace that sell for $23,000 a season. All of this has generated enough money so that the team was able to sign six free agents, increase player salaries to an average of $12,000 a year (last season it was $3,000) and field a more respectable team, which, through Jan. 2, was 15-14-4, a massive improvement on last year's record.
Crowds are averaging 4,267 per game, more than a tenfold increase over last season, and the team's improved record isn't the only reason the fans are coming back. These days the building is filled with pure sideshow. As Warshaw says, "We know what excites fans. We're doing something weird every game."
The weirdness ranges from Gorbachev-Yeltsin look-alike contests to young women stripping down to bikinis on the ice to dancing bears to barrel-jumping contests to a blonde female acrobat sliding down a rope and handing the referee the puck for a face-off. Sometimes crowds are brought in on the promise of free Iron City beer, sometimes for giveaways of pucks, pins or beer mugs. There is always rock 'n' roll music blaring, and the fans love having the Russian Penguins introduced in the glare of a spotlight in the darkened arena.
When Warshaw first suggested this classic bit of American hype, Tikhonov was stunned that anyone would think of turning off the lights on a visiting team. "That would be offending our guests," he protested. Warshaw countered by pointing out, "That's what we in the U.S. call a home field advantage."
Ultimately Tikhonov not only bought the spotlight gimmick but also signed on with enthusiasm to most of the other high jinks. "The team has woken up," he says, "and the fans are coming back to life."
While the hype has brought the fans back, at an average ticket price of only 16 cents, no one—including Howard Baldwin and his group—is going to get rich from admissions to Russian games. So what is to be gained from Baldwin's little investment? CSKA doesn't really work as a farm team because all other NHL teams have access to drafting Russian Penguin players. But as Baldwin says, "This is a little like having a junior team. There are huge pools of talented kids over there, all over the country. This business is so competitive that if we can just get a little leg up on our rivals discovering new talent, we're ahead of the game." (But not that far ahead. The Red Wings are reportedly interested in purchasing a piece of the Soviet Wings hockey club in Moscow, and the Edmonton Oilers are rumored to be interested in the Sports Club of the Army team in St. Petersburg.)
Baldwin's returns on his investment will most likely show up less in great hockey players than in great hockey merchandising. With a nifty array of Russian Penguin paraphernalia already for sale in the U.S., Baldwin and the CSKA hockey team expect to sell about $250,000 worth of merchandise this year.