FSG will not fire Sullivan. Dubas knew coming in he was untouchable for at least next year. But FSG has to know a stupid extension was just so poor that they have to eat 11 million after next year or trade him now if possible. But Dubas has to insure the transition from the keep the band together to a new approach is now the priority.
The 'sunk cost' perspective is a fallacy, FSG could fire him at any time, eat the cost, and no one would notice.
FSG is worth nearly $10 billion dollars, even if the Penguins are consistently cash flow negative (which apparently they are not), FSG can cover with cash or get financing/investment to cover the shortfall. $11 million is not even a rounding error to a company this size.
Why? The enterprise value is increasing exponentially. The team was reportedly sold for $900 million in 2021 and is
valued at $1.18 Billion at the end of 2023 with Operating Income of $49 Million. The value of this organization has increased 30% in two years.
What hurts enterprise value? Sucking. They'll lose ticket sales, sponsors, merch sales, ad revenue, TV ad revenue etc... One or two years? nbd, Five plus years? this is the start of a problem.
Oh and none of us on here know for sure but that loss most likely goes away if he signs with another team. The sooner they cut bait the better, someone else will sign him and the bugaboo of an $11 MM loss which is 20% of operating income or 1% of enterprise value goes away.