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The Triangle Business Journal reported on Friday that Carolina Hurricanes owner Peter Karmanos is in the final stages of completing a deal that would relinquish 8% of his hockey team to a group of a "half a dozen" investors for over $20 million. The transaction has yet to be approved by the NHL and the legal paperwork is still in process.
According to the article, the owner will not release any names involved until after the deal is 100% approved and completed.
The report also states that Karmanos hired a consultant who valued the team at $240 million, a much higher figure than the Forbes estimate of $162 million late last year.
For comparison, Terry Pegula recently purchased the Buffalo Sabres for $175 million, (plus $14 million in liabilities) while the group from Winnipeg purchased the Atlanta Thrashers for $170 million. (They also had to pay the NHL a $60 million relocation fee which was allegedly split up between league owners.)
The final numbers will most likely be a bit different than reported above because 8% of $240 million is $19.2 million. Either the valuation is higher than $240 million, the actual cash investment is lower than $20 million, or the 8% ratio is a touch low.
Regardless of the details, the numbers are lower than what the owner was originally looking for. Earlier this year, Karmanos was hoping to sell 25% or more of the team to a dozen or more investors.
As we mentioned previously here on the blog, TBJ reported earlier that Karmanos created a holding company so he could guarantee these investors an annualized return of 3.5% if they wanted to opt out after five years. The report states that these types of guarantees are extremely rare in sports ownership.
Look for something to be finalized regarding this sometime fairly soon. Check out the entire TBJ article, (subscription required) at the following link: