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MinJaBen

Carolina Hurricanes Sold

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As I posted on 7/20, I think it's time for PK to move on.  A couple of folks took slight exception and stated how he had done good things for hockey (I don't disagree) and that he has kept the team in Raleigh (true).  But he has seemed to have lost interest in the team and now he is acting like a sleazy car salesman as Legend described.  He's been trying to sell the team for years, now he has an "offer" for more than he has ever expected to get and he's playing hardball?  What the heck is wrong with him?  What a greedy guy he is.  And he even suggested that he may retain ownership as one of his options.  Does he want to sell or not?  The train departs soon and no one know when the next one will arrive.  He'd better get on board it if intends to move on.

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3 hours ago, coastal_caniac said:

  No need for twitter insults or torpedoing a possible deal.

 

 

He states he likes Greenberg, then states the price will rise if he has to go back again, then states he is giving Greenberg time to get his group together. Don't torpedo this PK, I am looking forward to the change in ownership. I believe Greenberg will have no problem getting together an investment group. It make take awhile, just hope PK doesn't blow it.

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1 hour ago, bluedevil58 said:

It's sounding to my like the purchaser is trying to raise the money because he doesn't have the 500m.  Could be wrong though.

He clearly doesn't have the 500 mil but I don't think he will have a problem with investors. Greenberg has many options that I believe PK didn't have.

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20 minutes ago, coastal_caniac said:

Give PK a soap box (thanks Chip) and we certainly should know what to expect by now when Peter Karmanos speaks.

 

Here is more:

 

http://www.newsobserver.com/sports/nhl/carolina-hurricanes/article164782287.html 

 

 

The guy should read his own material.  He doesn't make sense, business wise or street wise.

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On 7/19/2017 at 10:28 PM, LakeLivin said:

Which raises the question: what is Greenberg buying for a reported $500m? Gale Force or just it's subsidiary, Hurricane Holdings?  In other words, are the Everblades and the Fla arena included in the package?

 

So now we know - according to the N&O article above, it doesn't.

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Also from the N&O article. http://www.newsobserver.com/sports/nhl/carolina-hurricanes/article164782287.html

 

"Hurricanes president Don Waddell said the 2016-17 season was the first time the team finished in the black financially without making the Stanley Cup playoffs. Waddell said season-ticket renewals from last year were at 89 percent and more than 500 new season-tickets had been sold -- selling points for a potential buyer."

 

That surprised me a little bit.  Wouldn't have thought the Canes broke even last season given how bad attendance was.

Edited by LakeLivin

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I've got to wonder if Karmanos' talk is geared more towards getting the investors Greenberg is gathering to hurry up than it is towards him trying to  increase his sales price.  The fact that he isn't including Germain arena in the sale makes what was already a very attractive price, what, maybe $15-$25m better? (I doubt the value of the Everblades makes them even worth much consideration in the deal; kind of like buying a house and negotiating over whether a particular set of curtains are included :P).

Edited by LakeLivin

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1 hour ago, LakeLivin said:

kind of like buying a house and negotiating over whether a particular set of curtains are included

Exactly like that. It's not like Greenberg is going to sever the org's affiliation in terms of player development--unless PK retires to Florida with JR and they eff up that org too...

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3 hours ago, LakeLivin said:

I've got to wonder if Karmanos' talk is geared more towards getting the investors Greenberg is gathering to hurry up than it is towards him trying to  increase his sales price.  The fact that he isn't including Germain arena in the sale makes what was already a very attractive price, what, maybe $15-$25m better? (I doubt the value of the Everblades makes them even worth much consideration in the deal; kind of like buying a house and negotiating over whether a particular set of curtains are included :P).

 

Im not familiar with franchise purchases.  How much of a role does a roster have in the equation? Do highly regarded player signings like Pesce and Slavin increase the value? Or does it play very little into it?  Is it more like an updated kitchen versus a still solid kitchen? It's more about appeal than additional value.  

 

If it doesnt play into it what else would drive the cost up? Outbidding competitors (I can't see that) or a new media deal coming that increases revenue?  I'm not seeing the value increase.

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PK certainly has a tendency to put his foot in his mouth when he speaks. Still, the Hurricanes have lost money (or so we are told) nearly every year they have been in Raleigh. PK either absorbed that out of his pocket or is carrying a lot of debt, or some of both. But I think historically with sports franchises, negative cash flow while owning a team is not unusual, with the owner recouping his investment and a healthy profit when he sells. This potential sale would fit that model. But I have not heard a lot of speculation about this: if Greenberg is struggling to come up with the purchase price, what assurance do we have that he has the deep pockets to raise the Canes from a budget team to a cap team? Might we just get more of the same?

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10 hours ago, gocanes0506 said:

I'm not seeing the value increase.

Exactly.

 

Contracts are liabilities. Amounts due. Their only value (in business terms) is that they fix the amounts due at a known rate for a known period of time. But if your P/L sucks, that's small comfort; you've still gotta meet the obligations. Yeah, it's good that RF is a smart negotiator and is showing he's the guy you want in the GM's office. But that's still an intangible in terms of actual value.

 

True or not - and we'll never know, because the Canes are not publicly traded - Waddell's assertion of being in the black for the first time without making the playoffs is a strategic part of PK's sales messaging. He's selling the widely reported, very real potential of this team making the dance in the coming season. Transparent as his words might be, PK is only doing what anybody in his situation does: Putting whipped cream on horsesh*t in hopes of maximizing his eventual take. With a letter of intent in place, the number is not going to move now until next year's playoff picture is finalized; that's the next metric that could affect the asking price.

 

So, to extend Lake's house analogy: PK did a poor job of maintenance for 10 years, then finally brought in a guy to repair all the major systems. The house is now enough in order to attract a serious buyer, and PK is pushing to close the sale by sending a perfectly reasonable message: if the team does in fact fulfill its potential on the ice before a deal is done, the price will be higher than it is right now. 

 

Of course, there's another possibility: the team misses the playoffs, and the price heads the other way. PK isn't going to mention that--but he knows it, and that's why he wants the deal in place and final League approval on the Board of Governors' agenda in December. And if I'm Greenberg, I do too.

 

Transparent or sleazy as his comments might seem, from a pure sales/personal interest perspective, PK is saying all the right things.

Edited by top-shelf-1

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2 hours ago, top-shelf-1 said:

Contracts are liabilities. Amounts due. Their only value (in business terms) is that they fix the amounts due at a known rate for a known period of time.

 

Some contracts also sell tickets.  I'm not saying Slavin/Pesce are necessarily one of those contracts just that this is entertainment.

 

9 hours ago, gocanes0506 said:

If it doesnt play into it what else would drive the cost up? Outbidding competitors (I can't see that) or a new media deal coming that increases revenue?  I'm not seeing the value increase.

 

PK doesn't have to sell.  I took the $600m comment and another petulant PK comment.  He could decide tomorrow he wants $1b.  Take it or leave it.  Of course the buyer's not obligated either.

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A couple of thoughts here.

 

If they are looking for additional investors, I say we all empty out the ashtray and console change from our cars and trucks.  I'll also check under the couch cushions and cash in my beer cans.  Let's get this thing done.  Thanks for all you've done PK.  You brought us hockey and a Shiny Cup.  Now please accept a lovely fruit basket as a parting gift and go.  The uncertainty is not helping.  Also, don't forget PK's previous statement that he wanted to sell the team, and retain control for a while (how stupid is that?).

 

As for the report of the team finishing in the black, I'm always skeptical of reports of profits and losses.  All it takes is a change in the way you depreciate property to make that happen.  These things are played around with all the time as companies and business owners manipulate their taxes.  The team has lost money season after season, and turns a profit when PK wants to sell?  I'm not saying it smells fishy, but I do detect a scent of something.

Edited by super_dave_1
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53 minutes ago, wa1010 said:

Some contracts also sell tickets.

True, but nothing does like winning hockey games. Until we do enough of that to get into the playoffs, PK's true choice is pretty clear: keep depleting his retirement nest egg, or cut his losses and ride into the sunset.

Edited by top-shelf-1

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Quote

“If you sell your team, you sell your team. I would just like to hang around the edges, and help them when they need help and still get my name on the Stanley Cups if we win it. But if I’ve sold the team I’ve sold the team.”

 

What?

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1 hour ago, super_dave_1 said:

If they are looking for additional investors, I say we all empty out the ashtray and console change from our cars and trucks.  I'll also check under the couch cushions and cash in my beer cans.  Let's get this thing done.  Thanks for all you've done PK.  You brought us hockey and a Shiny Cup.  Now please accept a lovely fruit basket as a parting gift and go. 

 

I personally feel you are getting quite liberal in handing out fruit baskets of late.

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Anyone know how many season tickets the Canes sold last season?  I'm curious because Waddell says renewals for this year are at 89%, plus there's been an additional 500 new seasons tickets sold.  I'm wondering what the net comparison is at this point.  If, e.g. the Canes sold 5000 seasons tickets last year, they're now at exactly the same net number.

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16 minutes ago, hag65 said:

 

I personally feel you are getting quite liberal in handing out fruit baskets of late.

 

A fruit basket makes a lovely gift

 

fb6go.jpg

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48 minutes ago, hag65 said:

“If you sell your team, you sell your team. I would just like to hang around the edges, and help them when they need help and still get my name on the Stanley Cups if we win it. But if I’ve sold the team I’ve sold the team.”

 

It appears to me PK knows he needs to sell the team but just can't come to terms with the fact he won't be part of the team he built.

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3 hours ago, super_dave_1 said:

As for the report of the team finishing in the black, I'm always skeptical of reports of profits and losses.

 

This is all very speculative on my part but aren't there two companies associated with the team?  Carolina Hurricanes and Gale Force Holdings?  I always thought the accounting between those two companies was a little suspicious.  I don't know the numbers but it seems like historically, CH was losing money and GFH was making money.  Part of that, I think, is the arena deal income, at least for non-canes games, is run through GFH.  Is all arena income run through GFH (seems unlikely since that would seem like the largest part of income on the CH books but maybe just ticket receipts go to CH and all other arena income (concessions, parking) are considered arena operations and run through GFH)?  The TV deal (also likely on CH books)?  I don't know that the books are open enough, to the public, to know this for sure but I'd love to see the actual numbers.

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1 hour ago, wa1010 said:

This is all very speculative on my part but aren't there two companies associated with the team?  Carolina Hurricanes and Gale Force Holdings?  I always thought the accounting between those two companies was a little suspicious.  I don't know the numbers but it seems like historically, CH was losing money and GFH was making money.  Part of that, I think, is the arena deal income, at least for non-canes games, is run through GFH.  Is all arena income run through GFH (seems unlikely since that would seem like the largest part of income on the CH books but maybe just ticket receipts go to CH and all other arena income (concessions, parking) are considered arena operations and run through GFH)?  The TV deal (also likely on CH books)?  I don't know that the books are open enough, to the public, to know this for sure but I'd love to see the actual numbers.

 

Hurricanes Holdings, LLC owns the Canes and operates PNC Arena.  It is a subsidiary of Gale Force Holdings, LLC, which in addition to owning HH also owns the Everblades and Germain Arena in FL. Based on the N&O article, Greenberg is trying to buy Hurricanes Holdings from Gale Force Holdings (Karmanos).  Gotta believe that at a price north of $450m, all Canes related revenue goes to HH.  Not sure how HH is compensated for operating PNC, whether it's a percentage of all non-Canes related revenue that's generated by the Arena or what, but I get the impression that it's a pretty lucrative contract, adding significant value to Hurricane Holdings.

 

I suspect that there's someone here who has more details on the Arena contract, I'd be curious to see them filled in.

https://www.nhl.com/hurricanes/team/hurricanes-holdings-llc

Edited by LakeLivin

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2 hours ago, OBXer said:

It appears to me PK knows he needs to sell the team but just can't come to terms with the fact he won't be part of the team he built.

I could totally see him getting an "emeritus CEO" or whatever the League needs to okay the engraving. More critically, though, his comment about getting his name on the Cup speaks volumes about the expectation-management portion of RF's job description :lol:

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