Hurricanes sale formally closed, Tom Dundon now majority owner

[Big Daddy Cane]

Can we not call it a “dumpster fire”? Attendance has been terrible, but the team, or at least GFSE, still turned a profit last year, not including the Vegas expansion money.
http://Can we not call it a “dump...evenue sources (the problem in recent years.)
https://nsjonline.com/article/2017/08/hurricanes-waddell-says-team-made-2m-room-for-growth/

Thanks to revenue sharing, the business model can work, so long as payroll is kept in line with other revenue sources (the problem in recent years.)

 

[CHRDANHUTCH]

Well that was 3yrs ago MM. A lots changed in 3yrs. Also always interesting to read (re-read) some of his comments from then & now. Ballpark figure is $400M + in 2014, that "hopefully team stays in Carolina" & so on. As you'll recall the Coyotes "valuation" went from a supposed purchase price of $170M (over 80% financed at that along with league loans) to being declared to be actually worth $305M, nearly double in less than 12mnths after IceArizona had been running the team, and drowning in red ink. Between 2014 & October 2017, today, Ballmer purchase, Islanders sale, Expansion.

I dont think for a minute the Hurricanes are worth $500M including arena operations however thats what Karmanos now wants and in setting that price he's priced that franchise out of the market. The only way he'll get that is through poratability, a sale for relo, and you just have to figure he GD well knows it. So who's zoomin who here? Is Chuck Greenberg simply trying to talk reason to Karmanos who doesnt speak that language and instead then declares Greenberg needs to show me the money, all $500M or what?

Hell of a job to rope in any prudent investors at that price for that club after Karmanos has been driving it through the ditch for the past decade & even before then, notoriously cheap. Weve seen this before just with different wrinkles in Atlanta. So I dunno. But Karmanos like Wang, Melnyk, King & Co in Calgary along with others, always a hidden agenda, forever on the make. Sense of entitlement beyond all reason. Theres precedent for the price he's demanding & no matter that its irrelevant for that club where is as is and thats that. I'm waiting for the shoes to drop. The evaporation of this lineup of local buyers, how the NHL reacts, how they handle this.

you now realize, that Houston is not the franchise it was when Fertitta spent for it, K, there's now a report than Brooklyn's franchise will be transitioning by 2021, from Prokorov , and that beats Feritta's purchase by valuation.

Nets new owner also runs the Alibaba, and has bought a minority share of the Nets, at 2.3 B

 

[Melrose Munch]

My bet is Carolina to Quebec City, Phoenix to Houston and expansion to Seattle when they are finally ready. Just my 2 cents.

Two dumpster fires gone and Gary gets his long-time dream of a new team in the Pacific North West.

I might be totally wrong though.

It's looking like Quebec will be expansion with Houston opening up. Just too easy to shift a team west.

I agree the franchise is not worth near 500 million, but they made a meager profit last year.

Thanks. Fair enough.

Well that was 3yrs ago MM. A lots changed in 3yrs. Also always interesting to read (re-read) some of his comments from then & now. Ballpark figure is $400M + in 2014, that "hopefully team stays in Carolina" & so on. As you'll recall the Coyotes "valuation" went from a supposed purchase price of $170M (over 80% financed at that along with league loans) to being declared to be actually worth $305M, nearly double in less than 12mnths after IceArizona had been running the team, and drowning in red ink. Between 2014 & October 2017, today, Ballmer purchase, Islanders sale, Expansion.

I dont think for a minute the Hurricanes are worth $500M including arena operations however thats what Karmanos now wants and in setting that price he's priced that franchise out of the market. The only way he'll get that is through poratability, a sale for relo, and you just have to figure he GD well knows it. So who's zoomin who here? Is Chuck Greenberg simply trying to talk reason to Karmanos who doesnt speak that language and instead then declares Greenberg needs to show me the money, all $500M or what?

Hell of a job to rope in any prudent investors at that price for that club after Karmanos has been driving it through the ditch for the past decade & even before then, notoriously cheap. Weve seen this before just with different wrinkles in Atlanta. So I dunno. But Karmanos like Wang, Melnyk, King & Co in Calgary along with others, always a hidden agenda, forever on the make. Sense of entitlement beyond all reason. Theres precedent for the price he's demanding & no matter that its irrelevant for that club where is as is and thats that. Wait for the other shoes to drop. What Greenberg has to say if he cant close & the clock runs out. The evaporation of this supposed lineup of local buyers (hopefully I'm wrong about this), how the NHL reacts, how they handle this.

I think he got greedy because of the recent sales and now he's trying to save face. If he wants to keep them in the market, a haircut has to come.

 

[Fenway]

Can we not call it a “dumpster fire”? Attendance has been terrible, but the team, or at least GFSE, still turned a profit last year, not including the Vegas expansion money.
https://nsjonline.com/article/2017/08/hurricanes-waddell-says-team-made-2m-room-for-growth/

Thanks to revenue sharing, the business model can work, so long as payroll is kept in line with other revenue sources (the problem in recent years.)

When the team is sold the new owners will have considerable more debt service to deal with, I believe that is the biggest sticking point right now.

 

[Killion]

When the team is sold the new owners will have considerable more debt service to deal with, I believe that is the biggest sticking point right now.

Exactly. The fundamentals are all there but why bother if its going to take you years, a decade or more to dig yourself out from underneath the original purchase price. It leaves no room for error, for contingencies & so on. Money that should be spent on hockey op's, on advertising & promotion, in building community infrastructure & so on all going to service debt. The NHL has jumped the shark in raising the price of a franchise to that $500M threshold, out of control inflationary spiral that is not supported by & beyond the fundamentals (gate, local broadcast revenues, sponsorships, concessions, merchandising & parking, arena revenues etc along with NHL Central & Broadcast Revenues & so forth) your hard up against a ceiling. Just how much more does one believe franchise values will increase over the next 5-10-15-20yrs & what can you reasonably expect to receive should you decide to sell at some point in time down the road... myriad of questions requiring conservative & realistic projections.

 

[sawchuk1971]

just watched saturday's headlines on cbc.....they were saying the greenburg deal to buy the canes has fallen through....CWIW

 

[sawchuk1971]

https://www.canescountry.com/2017/1...huck-greenberg-peter-karmanos-nhl-quebec-city

It isn’t dead yet, but the proposed sale of the Carolina Hurricanes to Chuck Greenberg is seemingly on life support.
WRAL’s Jeff Gravley and Chip Alexander of the News and Observer both reported last night that negotiations between Greenberg and Canes owner Peter Karmanos have “hit a snag,” indicating that the deal announced in July for an investment group headed by Greenberg to purchase the Hurricanes may not go through after all.

Sources to both reporters indicated that a tweet from a Forbes reporter yesterday saying that the deal was off, however, was inaccurate.

Chip followed up today with a conversation with Karmanos, in which the Canes’ current owner stated his belief that the complication is simply that Greenberg cannot raise the necessary funds to meet the asking price.
“We have a commitment to Chuck and we’re going to see it through,” Karmanos told the newspaper. “And quite frankly I wish he would pick up the phone and say, ‘Geez, you know what, I can’t get it done.’ Because it looks like he can’t get it done.”

 

[Mightygoose]

just watched saturday's headlines on cbc.....they were saying the greenburg deal to buy the canes has fallen through....CWIW

First time this part of this saga has been mentioned by the Canadian media and more importantly, the official NHL media partner.

If they're now saying Greenberg's attempt has fallen though, it's safe to say it's dead. If he's trying to secure more investors again, who would that be that he hasn't already that's realistic? Time will tell.

 

[sawchuk1971]

First time this part of this saga has been mentioned by the Canadian media and more importantly, the official NHL media partner.

If they're now saying Greenberg's attempt has fallen though, it's safe to say it's dead. If he's trying to secure more investors again, who would that be that he hasn't already that's realistic? Time will tell.

i found a couple of sources saying both parties are still interested in getting a done...

the deal is "complicated"
http://www.wralsportsfan.com/purchase-of-hurricanes-has-gotten-more-complicated-/17055509/

There hasn't been much movement recently on the potential sale of the Carolina Hurricanes.
But any reports that Peter Karmanos, Jr and the group led by Chuck Greenberg have turned away from each other are incorrect. Sources tell WRAL that "the transaction has gotten more complicated" but neither party has rejected the other.

Neither source would expand on what "more complicated" means.

Over the last month there has been speculation that the sale of the Hurricanes has become stale. Even to the point that the deal between Karmanos and the Greenberg group was dead. Neither side has confirmed that so for now, the transaction remains in limbo.

carolina deal hits a "snag"
http://www.newsobserver.com/sports/nhl/carolina-hurricanes/article181175991.html

Negotiations between Carolina Hurricanes owner Peter Karmanos Jr. and a group headed by Chuck Greenberg over the sale of the NHL team apparently have hit a snag.

While the process has become more complicated, as one person close to the negotiations said Thursday, the same source said the two sides have “not turned their backs on each other.”

Read more here: http://www.newsobserver.com/sports/nhl/carolina-hurricanes/article181175991.html#storylink=cpy

Canes owner Karmanos challenges would-be buyer to come up with the money

http://www.newsobserver.com/sports/nhl/carolina-hurricanes/article181265886.html

Carolina Hurricanes owner Peter Karmanos Jr. said Friday that negotiations continue with sports attorney Chuck Greenberg over the proposed sale of the NHL team.

But Karmanos, in an interview, said he has questions as to whether Greenberg will be able to form an investment group capable of raising the amount needed to buy the team – perhaps $500 million or more

“The sale of the team is just sitting there, waiting for Chuck to say, ‘Geez, I can’t raise the money,’ ” Karmanos said. “We have a commitment to Chuck, and we’re going to see it through. And quite frankly I wish he would pick up the phone and say, ‘Geez, you know what, I can’t get it done.’ Because it looks like he can’t get it done.”

Asked if he believed Greenberg would be able to pull together a group of investors capable of completing the sale, Karmanos said, “Your guess is as good as mine.”

In the past few days, those close to the negotiations have said some complications have arisen and the process has snagged.

 

[Roboturner913]

The "Canadian media" has been known jump prematurely on rumors a time or two. I wouldn't put too much stock into that headline, which appears to be based on nothing more than a tweet from a Forbes writer with an axe to grind. It's likely there's a lot more nuance to the situation than that.

I would not, however, have a hard time believing that Greenberg is having a hard time convincing investors to spend $500M on a team with $200M in debt. The market has plenty of potential and the numbers/demographics bear that out, but even as a Canes fan I can see that he could have a hard time selling investors on potential when fully a third of the purchase price is red ink.

If Karmanos really wants to keep the team in Raleigh he's going to have to lower his price signficantly. But my gut tells me his only loyalty is to his bank account, so unless Bettman explicitly forbids it, I expect the team to be gone within the next 2-3 years. Might as well submit to the inevitable.

 

[blueandgoldguy]

It is worth noting that a prominent Canadian media member from TSN by the name of Rick Westhead broke the story on the Coyotes breaking their lease agreement with the city of Glendale thereby allowing officials to exit the contract and the generous annual subsidy that was vital to the Coyotes well-being. Yet the report was met with derision and doubt from many posters here...only to be proven correct.

My favorite part in one of the articles posted above was Karmanos stating the longer this goes the higher the price for the 'Canes. Uh, why exactly?! The team is still struggling to draw fans and last I could tell there are no new significant revenue sources in the new future, besides the one-time expansion fee for the Knights of course.

Off note, wasn't an announcement made a year or two ago that the Pittsburgh Penguins were for sale for $700 million. And no takers? This is a team that has sold out for a decade straight, is top-10 in revenue, has the game's most recognizable player and has won back-to-back championships. Sorry, but if that team cannot sell for $700 million I have a hard time believing the 'Canes can sell for anywhere remotely close to $500 million. $300 - $350 million seems more realistic especially if the $200 million in debt is included.

 

[TheLegend]

It is worth noting that a prominent Canadian media member from TSN by the name of Rick Westhead broke the story on the Coyotes breaking their lease agreement with the city of Glendale thereby allowing officials to exit the contract and the generous annual subsidy that was vital to the Coyotes well-being. Yet the report was met with derision and doubt from many posters here...only to be proven correct.

My favorite part in one of the articles posted above was Karmanos stating the longer this goes the higher the price for the 'Canes. Uh, why exactly?! The team is still struggling to draw fans and last I could tell there are no new significant revenue sources in the new future, besides the one-time expansion fee for the Knights of course.

Off note, wasn't an announcement made a year or two ago that the Pittsburgh Penguins were for sale for $700 million. And no takers? This is a team that has sold out for a decade straight, is top-10 in revenue, has the game's most recognizable player and has won back-to-back championships. Sorry, but if that team cannot sell for $700 million I have a hard time believing the 'Canes can sell for anywhere remotely close to $500 million. $300 - $350 million seems more realistic especially if the $200 million in debt is included.

Westhead also claimed when he broke his story that Glendale was located east of Phoenix.

That.... and the fact it was the first hockey related news story he'd done. So yeah..... there was some legitimate skepticism. He was proven wrong in some areas but he was correct in general on the lease issue.

 

[GuelphStormer]

Its pretty obvious, Karmanos does not actually want to sell, and more importantly nobody wants to buy at this falsely inflated price. This whole thing just seems a ridiculous distraction. Its playing out as little more than a nutty attempt to avoid a lame ducker this year before Bettman decides its time to move it to Quebec for 18-19.

The longer this silly charade drags out, the more money gets forfeited in QC, Bettman knows that. Expect him to pull the trigger on full league restructuring this year. Yotes to Seattle, (announce) expansion to some western city, and relo 'canes to QC. Balanced conferences, higher revenues, problem franchises solved.

 

[Glacial]

My favorite part in one of the articles posted above was Karmanos stating the longer this goes the higher the price for the 'Canes. Uh, why exactly?! The team is still struggling to draw fans and last I could tell there are no new significant revenue sources in the new future, besides the one-time expansion fee for the Knights of course.

Off note, wasn't an announcement made a year or two ago that the Pittsburgh Penguins were for sale for $700 million. And no takers? This is a team that has sold out for a decade straight, is top-10 in revenue, has the game's most recognizable player and has won back-to-back championships. Sorry, but if that team cannot sell for $700 million I have a hard time believing the 'Canes can sell for anywhere remotely close to $500 million. $300 - $350 million seems more realistic especially if the $200 million in debt is included.

That's how auctions work, not sales when there are very few bidders or buyers. Normally, the price goes down as they try and make the sale when there's unsold stock and low interest.

Agreed on the Hurricanes. They don't seem like they're worth 70% of what the Penguins are worth.

 

[aqib]

Something like that might work however your still not only $100M short but you'd also need a "float" of roughly half the franchise sale price, another $250M on top of that to kick-start operations in Houston, carrying costs for the first several years.... And MM?.... were not even close to discussing a total Sale For Relocation yet according to comments coming out of the Karmanos camp. That they supposedly do have other interested parties. That Greenberg either needs to show the money or get out of the way, that "Plan B" is to start talking to these groups. Or am I misunderstanding things; that "Plan B" is to entertain offers for Relocation?.... Because I dont think so. Thats probably "Plan C" and if it's ever permitted to go that far, if thats what this guys ultimately headed for, his real objective, hidden agenda then one can only hope the NHL intervenes & blows the wheels clean off his little red wagon before they ever touch the ground.

Where are you getting $250 million to jump start operations in Houston from? Most of your sales/marketing/corporate relations staff is already in place because you will be doing a lot of cross selling with the Rockets. Unless you have to make modifications to the arena I don't see how you are getting $250 million in startup costs/

 

[aqib]

Its pretty obvious, Karmanos does not actually want to sell, and more importantly nobody wants to buy at this falsely inflated price. This whole thing just seems a ridiculous distraction. Its playing out as little more than a nutty attempt to avoid a lame ducker this year before Bettman decides its time to move it to Quebec for 18-19.

The longer this silly charade drags out, the more money gets forfeited in QC, Bettman knows that. Expect him to pull the trigger on full league restructuring this year. Yotes to Seattle, (announce) expansion to some western city, and relo 'canes to QC. Balanced conferences, higher revenues, problem franchises solved.

It seems like he wants to have a deal in place that will close the day before he dies. He knows he has to sell at some point because he is in his 70s and he has 4 kids under 10 years old, but he loves being involved in hockey.

 

[Killion]

Where are you getting $250 million to jump start operations in Houston from? Most of your sales/marketing/corporate relations staff is already in place because you will be doing a lot of cross selling with the Rockets. Unless you have to make modifications to the arena I don't see how you are getting $250 million in startup costs/

General policy with the NHL when considering owners purchasing existing clubs & either keeping them where they are or moving them to a new market as well with Expansion applicants is that they have either cash reserves & or access to credit of not less than 50% of the purchase price. So $500M = a $250M "float". They wanna be sure whomever wherever can cover the carrying costs & possible losses for at least a few years minimum, have the green & readies necessary to cover the costs of advertising & promotion, supporting & building infrastructure at the grass roots level in the community, for off-ice hockey operations & so & so on..... Of course none of these policies were followed when they turned over the keys to IceArizona in Glendale (though they did have over $225M in municipal backing) nor were they followed when Andy Barroway then acquired majority interest & control, buying out the minority shareholders that comprised IA. Went totally off-road. Desperate times calling for desperate measures, threw caution to the wind.

 

[Fenway]

Karmanos could get his price tomorrow IF the BoG guaranteed the value of the franchise.

Say Bank of America which is the largest bank in North Carolina agreed to underwrite the sale but wanted an ironclad guarantee the NHL would buy the franchise if there was a default but that obviously is not happening......yet.

 

[edog37]

Its pretty obvious, Karmanos does not actually want to sell, and more importantly nobody wants to buy at this falsely inflated price. This whole thing just seems a ridiculous distraction. Its playing out as little more than a nutty attempt to avoid a lame ducker this year before Bettman decides its time to move it to Quebec for 18-19.

The longer this silly charade drags out, the more money gets forfeited in QC, Bettman knows that. Expect him to pull the trigger on full league restructuring this year. Yotes to Seattle, (announce) expansion to some western city, and relo 'canes to QC. Balanced conferences, higher revenues, problem franchises solved.

You guys give Bettman way more power than what he actually has. It's the BoG who decide these structural issues, not Bettman....

 

[Melrose Munch]

You guys give Bettman way more power than what he actually has. It's the BoG who decide these structural issues, not Bettman....

And jeremy Jacobs would love nothing more then to have a second team in new England so there can be more content on NESN...

 

[aqib]

And jeremy Jacobs would love nothing more then to have a second team in new England so there can be more content on NESN...

Source?

 

[Melrose Munch]

Source?

speculation and fenway. probably them or csn ne but the whalers with a tv contract up there would be worth a lot of money. plus the guy is against quebec for some reason.

 

[powerstuck]

speculation and fenway. probably them or csn ne but the whalers with a tv contract up there would be worth a lot of money. plus the guy is against quebec for some reason.

He's not against Quebec per say. He's against anything that doesn't make him richer.

He knows an expansion into EAST, where Quebec is currently the only available spot, kills chances in the next 5 years of a team in Seattle (Phoenix is still uncertain).

Seattle for him is guaranteed business thru Delaware North.

 

[mikelvl]

Really, at this point, QC's best if not only chance is relocation of an Eastern Conference team. Houston's emergence with an arena ready could speed expansion. Then Seattle can get their arena built and Bettman can put the screws to Arizona. Get the arena done or else. Or if he really wants the Pacific NW, wait to expand until the arena up there is built. And tell Arizona, figure it out or I'm dumping you for the fourth largest TV market in the country in Houston.

 

[voyageur]

Really, at this point, QC's best if not only chance is relocation of an Eastern Conference team. Houston's emergence with an arena ready could speed expansion. Then Seattle can get their arena built and Bettman can put the screws to Arizona. Get the arena done or else. Or if he really wants the Pacific NW, wait to expand until the arena up there is built. And tell Arizona, figure it out or I'm dumping you for the fourth largest TV market in the country in Houston.

Nobody in Houston would pay $500 million for an expansion team. Especially to have them be second fiddle to the Rockets. There is only one place that would pay $500 million. And it sure seems that is what Karmonos is banking on. Quebec represents his only chance at the big payout, otherwise he gets a lot less. He did seem genuinely interested in the state of the game and the growth he has facilitated in North Carolina, so that weighs in the other direction.

I think Houston has moved to the front of the list for relocating the Yotes. Kansas City is probably 2nd. I think you could get $400 million from Lewiske and Co. for an expansion Seattle team. That market is worth it, raises the TV contract value by $100 million, at least. I am still hoping Bettman and company keep Karmonos to the Raleigh-Durham market, at a reasonable number, say $350 million, for 51%. I think it is a footprint in a rather rich, untapped market. They could profit from an owner who invested heavily on his team. He can earn the rest from expansion ($13 million or so from Seattle) and let Florida relocate to Quebec, with a payout to the league. Viola and co. can break their subsidy with the municipality, and move at any time. Miami was the market Donald Fehr highlighted as one that may not work.