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Karmanos Confident He Will Soon Find Buyer For Hurricanes Stake
Published June 3, 2010
|Karmanos Estimates New Investors Could
Infuse Additional $10-12M Into Team
Hurricanes Owner Peter Karmanos yesterday said that there is an "'excellent possibility' that he can find a local investor or group of buyers" for part of the team and that he "wants to make the sale in the next two or three months," according to Chip Alexander of the Raleigh NEWS & OBSERVER. Karmanos: "We're in the process of talking to a lot of deep-pocket people. I have an awful lot of friends outside the community that have expressed interest. I really, really feel strongly that I want local ownership." Karmanos said that local "could mean someone from North Carolina or South Carolina, not necessarily" the Raleigh area. He added that bringing in local investors could infuse $10-12M "in extra revenue to the team, through added advertising and ticket sales." Karmanos noted that "being a minority owner in a pro sports team is a 'hard thing,' but said he'd like to find someone to buy a 'large chunk' of the team, then syndicate a number of shares to others interested in putting in" $5M or $10M each. Karmanos said that the team "lost 'a lot of money' this past season as their overall attendance dipped and they failed to reach the Stanley Cup playoffs," though he said that he was "under no financial or legal pressure to sell the 49-percent stake in the team owned by his former business partner, the late Thomas Thewes." Alexander notes Karmanos yesterday "wouldn't completely rule out selling the team, lock, stock and arena lease, but he said it would take an offer so high it would bowl him over," and he also "stressed that regardless of the buyer or sale, the team would not be moved." Karmanos noted that the team "has a lease with the Centennial Authority that runs through 2024, receives $4 million in naming rights each year and has invested" $40M in cash at RBC Center. Karmanos also said that NHL owners "would not approve a relocation" (Raleigh NEWS & OBSERVER, 6/3).
ON-ICE IMPACT: In Raleigh, Luke DeCock writes even if the Hurricanes are "here for good, it's fair to ask how good the team will be." The sales prospectus prepared by investment bank Allen & Co. "touts a reduction in expenses by as much as $15 million as a step toward profitability," and Karmanos yesterday confirmed that "that kind of savings could come only from cutting player salaries." DeCock writes the "pressure to make the money-losing franchise as attractive a purchase as possible may consign it to payroll purgatory at the bottom of the NHL's salary range." The Hurricanes' cap figure was about $54.5M this season, and with the cap minimum for next season expected to be $40.8M, the team already has "about $41.7 million committed to 17 players." DeCock writes the Hurricanes' "playoff runs gave the team the strength in this market it has today," so it "would be a shame if making the Hurricanes more attractive on paper made them less attractive on ice" (Raleigh NEWS & OBSERVER, 6/3).