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We don’t really have many links today because yesterday’s big story in the NHL was also the big story locally: Peter Karmanos has reportedly, at long last, found a buyer for the Carolina Hurricanes that will keep the team in Raleigh. I know it’s tempting to jump at the news, and it’s also tempting to offer a backlash take - “well, his statement says he’s evaluating whether to keep the team, so this is all going to come to nothing” - but there are more than a few reasons that this news should be taken as a positive development.
First, it’s always important to note where a story originates from. In this case, it was a writer for Bloomberg, Scott Soshnick, who is based in New York, not Toronto or some other Canadian market. Bloomberg has deep connections with investment banks in New York, one of which is presumably advising potential new owner Chuck Greenberg. In other words, this is being reported as a business story, not a hockey story. That’s a big check mark.
Second, the story was confirmed by WRAL’s Jeff Gravley within half an hour of the original report, with the added information that a letter of intent has been signed. Assuming that report is accurate - and there are many reasons to assume it is, more of which we’ll talk about in just a second - this isn’t a verbal agreement. This is Karmanos signing a piece of paper saying he intends to sell the team.
Now, could it fall apart? Of course it could. Maybe Karmanos decides to play hardball and insist on his long-rumored condition that he continue to operate the team, essentially playing in a sandbox with someone else’s toys. Maybe the financing falls through. There are a million different things involved with a transaction of this magnitude, any one of which could derail the whole thing.
But that’s why the boilerplate language in that statement yesterday exists. Karmanos has been in business long enough to know that he shouldn’t back himself into a corner. It’s a cover-your-posterior move, nothing more; don’t read into it any more than that.
Now, as for the WRAL report, the fact that they were the first to confirm this story is an inordinately good sign. Capitol Broadcasting, WRAL’s parent company, is a minority owner of the Hurricanes. All Gravley would have had to do is pick up the phone and call his owner, Jim Goodmon, and ask if this is for real.
ABC11’s Mark Armstrong did one better, getting a comment on the record from minority investor Tim Whitney that a letter of intent does exist. That’s not an anonymous source; when someone puts their name to it, that matters. And this is a bit of scuttlebutt, but Ron Francis - another minority owner - was at a press conference in Charlotte yesterday to introduce Mike Vellucci as Checkers head coach, but wasn’t available for talking afterwards because he left Bojangles’ Coliseum in a hurry. The initial Bloomberg report broke just as that press conference was wrapping up. One can easily assume that Francis was hightailing it back to Raleigh to deal with this news.
On top of all this, Greenberg and Capitol Broadcasting have a history together, and it’s a very easy line to draw to show that Capitol may have played the matchmaker in this potential deal. Capitol bought the Durham Bulls in 1991 from Miles Wolff, when they were still in the A-ball Carolina League. When the Bulls were promoted to AAA in 1997, the Carolina League franchise was moved to Danville, Virginia, for a year, before relocating to Myrtle Beach, where they have played as the Pelicans for nearly 20 years.
So, for a while, Capitol owned two baseball teams: the “new” AAA Bulls in Durham, and the “old” single-A Bulls, now in Myrtle Beach. This setup persisted until 2006, when Capitol sold the Pelicans...
...to Chuck Greenberg.
Greenberg also sits on the Carolina League board of directors, the league that includes the Carolina Mudcats and three other teams in North Carolina. So while Greenberg isn’t “local” in the sense of having a house on Falls Lake and getting stuck in traffic on I-40 every day, he’s certainly anything but a parachuting out-of-towner who’s never laid eyes on the Triangle before.
Third, let’s talk about price. The only report we have about the sale price is the Bloomberg report, which quoted the sale price as “about $500 million.” No one else, understandably, is willing to go on the record to talk money, so this is the most tenuous part of the story.
But that price point makes logical sense, even if it seems a little high. The market rate for NHL franchises in 2017 was set when Bill Foley paid $500 million as an expansion fee to start the Vegas Golden Knights. Should the $500 million-ish reported pricetag for the Hurricanes be anywhere close to accurate, it’s actually a pretty decent deal given the market.
Unlike Vegas, where $500 million gave Foley the right to spend even more money to get the franchise off the ground, the Hurricanes come as a complete package. The players and infrastructure are already here. The lease for the arena is in place. A new owner will likely want to make some changes, but the price for purchasing an existing franchise usually is higher than what would be paid to start a new one simply because there are more pieces already in place that will be included in a sale.
Finally, and this may seem the most basic of all, but reporting from two separate outlets - WRAL and Bloomberg - identified Greenberg by name as the point man of this bid. This isn’t anonymous sources reporting on an unnamed group that may be interested. When actual names get involved, that’s a telltale sign that a story has legs.
We’re a long, long, long way from putting this to bed and Karmanos turning over ownership of the club he’s owned for 23 years. But the signs are all promising, and cautious optimism is certainly warranted. We’re still in the opening few hundred feet of a marathon, but at least the starting gun has been fired.
- This was totally buried yesterday under the avalanche of news that came out almost simultaneously, but Mike Vellucci was introduced as the Checkers’ new head coach and Justin was there. Go read his writeup and watch the presser with Vellucci and Ron Francis.
- Most of what’s out there is based on two reports: the one from Bloomberg and the one from WRAL. Go read those if you haven’t already.
- Jeff Gravley was on with Adam and Joe yesterday afternoon to discuss more about the reports of the Hurricanes’ potential sale. [WRALSportsFan]
- Five playoff teams from the Metro seem to be a foregone conclusion for next year. Matt Larkin says the Hurricanes will be number five. [The Hockey News]
- Leon Draisaitl is still unsigned. The longer it takes, the more antsy Oilers fans are becoming. [Copper & Blue]