News & Notes XLIV: Revenge of the Seth

[Stickpucker]

NHL Valuations Ranking List

32% 1 year increase - 25th spot on the NHL valuation

25 -1

Carolina Hurricanes

$1.29 billion

32%

You have to wonder what the valuation would be in an alternate timeline where he doesn't hire RBA to HC and the team continues to be mediocre.

Either way this increase in valuation makes him fighting with Rod over the coaches contracts so much seem petty.

Well, Merulo showed that even poorly run franchises go WAY up in value the longer you keep them, so I'm not sure how much this increase matters.

Good counter point to what I just said.

 

[hblueridgegal]

Feedback:

William N.
· 22h 9m ago
Carolina again? FFS.... It's sad. Dom, please. This content diminishes the Athletic's reputation for hockey coverage.

I'm sure the editors at The Athletic are measuring engagement, but engagement with crappy reporting eventually leads to loss of trust and loss of subscriptions.

My 2 cents: Scale back on the analytics based content or find new people who can interpret it better, like Dimitri Filipovic.

Better yet, hire a writer who will talk about systems, Xs and Os. Hardly anyone in the market is doing it and it will be way more engaging than the inaccurate nerd stuff.

 

[A Star is Burns]

Feedback:

Why does William Nylander even care about where we are ranked? I'd think he has more important things to worry about.

 

[MustardStew]

The gift was the custom lettering and numbers. He still had to buy the jersey.

I paid for the custom lettering along with mine a couple years ago...

 

[tarheelhockey]

P

Sign of the times.....at some point, the music will stop and the last in owners will have a financial mess.

I agree with the general sentiment that franchise values can’t go up at this rate forever, but the model has changed so much for organizations like this. In less than a decade they went from being an attendance-dependent live entertainment organization to being the main foothold for public financing of the arena which validates investment in an entertainment district which will spin off billions in profits for the early investors. Totally different game than what Karmanos was playing.

If the next guy thinks he’s getting similar returns on $1.3B by doing the same thing Dundon is doing, he’ll be disappointed. Dundon will suck the marrow out of these investments and then sell high, it’s what he does. But if the buyer is a similar thinker and is looking a couple of steps ahead, then they very well might make a huge profit as well. It really comes down to finding intelligent, well-bankrolled owners, which historically has not been the NHL’s strong suit.

 

[LakeLivin]

Sign of the times.....at some point, the music will stop and the last in owners will have a financial mess.

Originally, but didn't he subsequently buy out the other minority (the article doesn't say what was the targeted buyout price though; ie, his sunk cost is probably more than $420M.)?

edit: found it: Dundon Assumes Full Ownership of Hurricanes | Carolina Hurricanes.

Yeah, I knew he eventually acquired full ownership. But the tweet implies that the franchise valuation went from $420m to $1.3b in 6 years, while it actually went went from $808m (extrapolating the 52% to 100%) to $1.3b. While a 60% increase in 6 years is still quite impressive, it's nowhere near the over 200% increase they imply. For some reason stuff like that just bothers me.

p.s. that ignores that Dundon also got operating rights to PNC; not sure what that was worth. Interestingly, the previous Forbes valuation at the time of the sale was only $230m, lowest in the NHL. And Vegas had just paid a $500m expansion fee.

 

[Discipline Daddy]

P


I agree with the general sentiment that franchise values can’t go up at this rate forever, but the model has changed so much for organizations like this. In less than a decade they went from being an attendance-dependent live entertainment organization to being the main foothold for public financing of the arena which validates investment in an entertainment district which will spin off billions in profits for the early investors. Totally different game than what Karmanos was playing.

If the next guy thinks he’s getting similar returns on $1.3B by doing the same thing Dundon is doing, he’ll be disappointed. Dundon will suck the marrow out of these investments and then sell high, it’s what he does. But if the buyer is a similar thinker and is looking a couple of steps ahead, then they very well might make a huge profit as well. It really comes down to finding intelligent, well-bankrolled owners, which historically has not been the NHL’s strong suit.

Call me crazy but I'd be really worried for our future if Dundon sells. I disagree with a lot of the things Dundon has done, but he's proven damned sure to be way smarter than me. I agree with you that it's prerogative to sell high if he wants to. We seem to have struck gold with Dundon's meddling, and he either is the guy making the right decisions a lot of the time, or finds good people and empowers them. I do think Dundon has encouraged the franchise to zag when others are zigging, meaning he's not afraid to look for creative solutions to problems. Perhaps also his hard bargaining leads to us making prudent decisions with pending UFAs.

It'd be really fun to be a fly on the wall during the team building meetings.

 

[tarheelhockey]

Call me crazy but I'd be really worried for our future if Dundon sells. I disagree with a lot of the things Dundon has done, but he's proven damned sure to be way smarter than me. I agree with you that it's prerogative to sell high if he wants to. We seem to have struck gold with Dundon's meddling, and he either is the guy making the right decisions a lot of the time, or finds good people and empowers them. I do think Dundon has encouraged the franchise to zag when others are zigging, meaning he's not afraid to look for creative solutions to problems. Perhaps also his hard bargaining leads to us making prudent decisions with pending UFAs.

It'd be really fun to be a fly on the wall during the team building meetings.

Dundon is the sweet spot between the old school meddling owner who thinks he knows hockey and really just knows how to exploit employees, and the new school faceless conglomerate which holds every decision up to a P&L algorithm.

Then there’s Dundon, the exploitive jerk who thinks of everything as P&L algorithm but also knows he doesn’t really know hockey and delegates decisions to people who are objectively proven to be good at their jobs.

 

[MinJaBen]

Yeah, I knew he eventually acquired full ownership. But the tweet implies that the franchise valuation went from $420m to $1.3b in 6 years, while it actually went went from $808m (extrapolating the 52% to 100%) to $1.3b.

I don’t believe that this is correct. My recollection is at the time he paid for controlling ownership when he first bought the team (51+%) but that the number you have for $420M was not the payment, but the valuation for which his payment was calculated. He only paid around $200+ million. Then later paid the rest of the money.

 

[AD Skinner]

I still kinda think dundon got addicted to the game and won’t sell until he wins a cup. I’m wrong about a ton of shit though

 

[SlavinAway]

I don’t believe that this is correct. My recollection is at the time he paid for controlling ownership when he first bought the team (51+%) but that the number you have for $420M was not the payment, but the valuation for which his payment was calculated. He only paid around $200+ million. Then later paid the rest of the money.

This was my understanding as well.

 

[chaz4hockey]

I don’t believe that this is correct. My recollection is at the time he paid for controlling ownership when he first bought the team (51+%) but that the number you have for $420M was not the payment, but the valuation for which his payment was calculated. He only paid around $200+ million. Then later paid the rest of the money.

Numbers are tough to pin down.

I saw another article that the value was $550M (plus, Dundon paid down team debt from $200M to $100M). From N& O article:

"Thomas Dundon, a man of many ideas, takes over the Carolina Hurricanes
By Luke DeCock and By Chip Alexander. RALEIGH
Updated January 11, 2018 7:59 PM

Tom Dundon finalized the deal to buy the Carolina Hurricanes on Jan. 11, 2018, and shared his thoughts on why he decided to buy a hockey team, why the Hurricanes and how improving the fan experience will be his top priority.
Thomas Dundon, the new owner of the Carolina Hurricanes, comes across as a man of many ideas, constantly in motion, looking to make changes and move forward.

Dundon, a self-made billionaire from Dallas, finalized the deal Thursday in which he took over majority ownership of the Hurricanes from Peter Karmanos Jr., the National Hockey League announced. Dundon will own 61 percent of the NHL team, which was valued at $550 million, with an option to buy the remainder in three years."

 

[LakeLivin]

I don’t believe that this is correct. My recollection is at the time he paid for controlling ownership when he first bought the team (51+%) but that the number you have for $420M was not the payment, but the valuation for which his payment was calculated. He only paid around $200+ million. Then later paid the rest of the money.

Thanks, that makes sense given that the Forbes most recent valuation prior to the sale was $230m. Here's a Forbes article about the sale; it's one of the few I found that specifies that $420m was the enterprise value, not what Dundon actually coughed up at the time. That would also explain how Dundon was able to match Montreal's offer sheet and pay Aho's big upfront bonus.

One other interesting thing is that the article states that Dundon got 61% of the Canes, not the 52% that most others reported.

Carolina Hurricanes Sold To Tom Dundon For $420 Million

The sale price is a huge win for the NHL.

www.forbes.com