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SBJ/20100524/This Week's Issue
Hurricanes hire Allen & Co. to sell 50 percent of team
Published May 24, 2010
The Carolina Hurricanes have hired Allen & Co. to sell 50 percent of the club, a move that makes the team the latest NHL franchise to seek new ownership.
“My partner, Tom Thewes, passed away two years ago, and we have been putzing around trying to figure [out] how to replace the partner,” said Hurricanes owner Peter Karmanos, who currently controls 100 percent of the franchise. “We just went to Allen & Co. to explore the different ways. It’s certainly not to sell the team.”
The Hurricanes, who relocated from Hartford, Conn., to North Carolina in 1997, join a crowded marketplace for NHL teams. Already on the market are the Dallas Stars, Phoenix Coyotes and Atlanta Thrashers. There is talk that other teams, including the Los Angeles Kings, have been approaching would-be buyers, as well. The Kings, owned by Philip Anschutz and Ed Roski, deny they are for sale.
Even at just the confirmed four, that represents nearly 15 percent of the 30 teams in the NHL, which has had a number of clubs struggle with substantial financial losses.
“In the NHL, [the sales] are driven a little bit by the economy. A lot of guys that could have scraped by aren’t able to, or they put themselves in financial situations that weren’t sustainable,” said Andrew Kline, managing director at Park Lane, which recently represented the ownership group led by Oren Koules in the sale of the Tampa Bay Lightning to Jeffrey Vinik.
With so many teams on the market, Kline said, Allen & Co. will have a challenge because the leverage is on the side of the buyers.
Allen & Co., which previously has advised in the sale of teams including the Pittsburgh Penguins, Cleveland Cavaliers and Washington Wizards, declined to comment. Managing director Steve Greenberg is handling the assignment.
The Hurricanes’ search will focus at first on North Carolina-based buyers, a source said, because part of the reason Karmanos is selling is because he feels a need to have a local ownership presence. He lives in Michigan.
It can’t be ruled out, of course, that Karmanos sells the whole team, which he has owned since 1994. Owners frequently look for partners only to find that buyers want full control.
How a 50-50 partnership would be structured for the Hurricanes is uncertain. There are only a handful of similar arrangements in sports. The Tisch and Mara families peacefully co-own the New York Giants, with the Maras handling football operations and the Tisches overseeing business operations. On the other side, George Gillett and Tom Hicks’ co-ownership of Liverpool FC has been stormy, and the duo is currently trying to sell the team.