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Hurricanes Renegotiating Lease

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FW, I agree, corporate support is key to better income in the good times and for helping a franchise through the rough times of lower attendance. From what I've read, the Canes lost whatever momentum they had with corporate support from the lock-out that not even a Stanley Cup restored. Seems strange to me that corporate support in this vital Triangle are is so hard to garner.

The bigger issue for me, however, is how can a team that is drawing reasonable fan support, even with below average corporate support, be losing money even with a self-imposed salary limit millions below the NHL cap? And Carolina is far from the only team in this boat. Seems the 'wisdom' of Bettman's bargaining agreement is full of holes if the only way Carolina and about a third of the rest of the league can make money is by going 'deep into the playoffs.' :huh:

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All this talk is making me sad. I don't wanna lose the Canes. Personally I think it's all bogus to get people who love the Canes to buy more buy more. Maybe not. Anyone who watched the Red Wings/Canes game notice the attendance

of that arena? Pretty empty for the #1 team in the league. My neighbor is from there and says it's the economy. But maybe that would not affect the Wings, because they have been there years and years and we are still a young team, but you think it would hurt them also.

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The Canes did not request a renegotiation. It was the arena group. They already have a lease through 2019. This was an extension to 2024 and to get that the Canes suggested 2 mil instead of 3 mil per year. It is likely this will end up somewhere in the middle.

1 mil per year does not make or break this team. Simple business negotiation.

No need for hand wringing at this point.

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What i can't understand is how the Canes organiztion can't even get the local media on board.I hear more about the stinkin panthers and bobcats that are located150 miles away!! The Canes are right here in our own front yards!!Plus the fact that all the college sports get so much coverage doesn't help. You would think local TV would want more things here in the triangle instead of Charlotte!! Both of those teams are terrible but still get more coverage. Corprate is all about money so if the Canes were more visible i believe that more corprate money would be spent. Heck even a "all news"channel has bobcat games televised!! You have to be seen, you have to be out there in the faces of everyone,not just the people whom have "TWC,DISH,OR DIRECT TV". Local media has to get on board,corprate will go where they can be seen,,its all about marketing and advertising for them.

On another thought ,instead of going for quality maybe the Canes should think about quantity. A little more affordable nite at the RBC center would bring in more money than 2/3rd full arena. Sitting in the top level is nice(i know cuz thats all i can afford) but every now and than it sure would be nice to sit where you can actually see and feel the game! You don't have to cut prices in half or anything but just enough to fill the RBC for all games. It's like when you see the "RED" empty seats the team will continue to be in the "RED" when it comes to making money.

Filled seats,= filled parking lots ,more consessions,sales ,& merchandise,,which ='s more money from us and corprate!

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What i can't understand is how the Canes organiztion can't even get the local media on board.I hear more about the stinkin panthers and bobcats that are located150 miles away!! The Canes are right here in our own front yards!!Plus the fact that all the college sports get so much coverage doesn't help. You would think local TV would want more things here in the triangle instead of Charlotte!! Both of those teams are terrible but still get more coverage. Corprate is all about money so if the Canes were more visible i believe that more corprate money would be spent. Heck even a "all news"channel has bobcat games televised!! You have to be seen, you have to be out there in the faces of everyone,not just the people whom have "TWC,DISH,OR DIRECT TV". Local media has to get on board,corprate will go where they can be seen,,its all about marketing and advertising for them.

On another thought ,instead of going for quality maybe the Canes should think about quantity. A little more affordable nite at the RBC center would bring in more money than 2/3rd full arena. Sitting in the top level is nice(i know cuz thats all i can afford) but every now and than it sure would be nice to sit where you can actually see and feel the game! You don't have to cut prices in half or anything but just enough to fill the RBC for all games. It's like when you see the "RED" empty seats the team will continue to be in the "RED" when it comes to making money.

Filled seats,= filled parking lots ,more consessions,sales ,& merchandise,,which ='s more money from us and corprate!

EXACTLY! "The Panthers continue to suck again blah blah blah...college basketball this and that....blah blah blah, let's talk about other teams that are not even from our state and the Canes won (who cares)" So irritating!

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What i can't understand is how the Canes organization can't even get the local media on board.I hear more about the stinking panthers and bobcats that are located150 miles away!! The Canes are right here in our own front yards!!Plus the fact that all the college sports get so much coverage doesn't help. You would think local TV would want more things here in the triangle instead of Charlotte!! Both of those teams are terrible but still get more coverage. corporate is all about money so if the Canes were more visible i believe that more corporate money would be spent. Heck even a "all news"channel has bobcat games televised!! You have to be seen, you have to be out there in the faces of everyone,not just the people whom have "TWC,DISH,OR DIRECT TV". Local media has to get on board,corporate will go where they can be seen,,its all about marketing and advertising for them.

On another thought ,instead of going for quality maybe the Canes should think about quantity. A little more affordable nite at the RBC center would bring in more money than 2/3rd full arena. Sitting in the top level is nice(i know cuz thats all i can afford) but every now and than it sure would be nice to sit where you can actually see and feel the game! You don't have to cut prices in half or anything but just enough to fill the RBC for all games. It's like when you see the "RED" empty seats the team will continue to be in the "RED" when it comes to making money.

Filled seats,= filled parking lots ,more concessions,sales ,& merchandise,,which ='s more money from us and corprate!

if you reduce prices then revenue is reduced, you risk alienating your STH base because why would I want to pay those prices when i can wait for a BOGO game or one of your reduced rate games. So though your idea would fill seats it would cost more in the long run. Just reducing prices won't get butts in seats if people just don't want to go, it might get you there cheaper than now but in the scheme of things won't accomplish the goal. They have to make a major push as far as the media and marketing, plain and simple.

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if you reduce prices then revenue is reduced, you risk alienating your STH base because why would I want to pay those prices when i can wait for a BOGO game or one of your reduced rate games. So though your idea would fill seats it would cost more in the long run. Just reducing prices won't get butts in seats if people just don't want to go, it might get you there cheaper than now but in the scheme of things won't accomplish the goal. They have to make a major push as far as the media and marketing, plain and simple.

Could not agree more as you alread have HT tickets and other ticket deals.

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this kinda goes along with the topic and my previous post.............

http://www.masslive.com/sypek/republican/i....xml&coll=1

the only reason I posted that is to go with the "don't trust owners...they are not your friends". I know some of you feel that Karmanos is the second coming but most owners don't feel a sense of community, a sense of city pride, they don't feel for the fans....all they see are $$$$$$$$ and when that is not happening...they fly. That article goes along with what I have said for years , Karmanos was allowed to buy this team with no intention of working anything out in Hartford.

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OK, first, sorry for such a long post but here it is

I have spent the last 5 years trying to understand the business of hockey. I work for a Corp20 company and use that MBA quite often at work but have made it a hobby to look at the business of hockey. I have tried to look at Gale Force/Canes as a business person. I participate in several hockey business boards. I have also exchanged emails with the Mayor on this very subject and have known about this for 3 weeks or so as it was published in the TBJ.

I don't think the Canes are leaving anytime soon but I don't think all is well. The Cent. Authority tried to get 5 more years added to their lease and they use the upkeep of the arena as bait. Gale Force did not bite. The reason, I think.......the team is worth more with a shorter lease than with a longer lease. Look at what happened in Nashville and with Pittsburgh. One had an "out" on a lease and the other did not have a lease or an arena. Karmonos is not going to own the team forever and to be honest, I am not sure how much longer. He has been a good owner for Raleigh and a less stubborn man would have left years ago.

To put it in perspective, it takes about $70M to run a team. JR even quoted this amount on XM one day. Take player salaries and costs of operation and travel and staff and all the other things it takes to run a business. A team may be able to get off a little cheaper but $65M to $70M is what is quoted in the Canadian press and other places.

So you have ticket sales at average of $44 for the canes (quoted before as cost) . The Canes give away about 900 tickets a game (source: Globe and Mail report). Multiply that $44 times an average of 16,500 -800 Freebies and that is 15,700. Multiply 15,700 times $44 times 41 only equals $28.3M. That does not even cover player salaries and I had to laugh when I heard people on these boards asking why the Canes don't spend at the cap. Figure suite revenue is $80K a box since the tickets for those suites is already counted in the average ticket. With an average of 65 suites rented, that is $4.8M. I actually think that is high but lets go with it. Many sponsors get suites with their sponsorships and some suites are not rented or rented out on a game by game basis.

Sponsorships probably bring in another $5M but I think that may be high but not sure. We are up to $38.1. Not even covering player salaries yet. I hear people complaining about parking. So lets say they average 9000 cars a game at $9 average (VIP, regular and Premier), that is $81K but then take out $8K for salaries or parking guys, that is $73K a game times 41, that is almost $3M........which is I think is very high compared to what it really is. I would think more like 2M but lets go with $3M.

We are now up to $41.1M. We have $29M more to go. Does anyone on this board think they make $29.1M on jerseys and french fries ? If so, I have a bridge in Brooklyn that I can put your name on. Now there could be a few other items in there but it shows the importance of 2 things. Average cost of tickets which goes down with 2 for 1 deals (also erodes ST base) and revenue sharing which by the new CBA, does not last forever. Say we get $7m in Revenue sharing, it does not last and let me tell you, it really POs the small market teams paying into revenue sharing like Edmonton and other teams that are forking over millions of profits. You will need those teams and their Governor on the Board on your side if your team gets in trouble or a new owner (hostile or nice) since they vote for new owners coming into the league.

And no way does Gale Force make it up on a few concerts. Next Canes game you go to, just look at how many people are working the game and being paid for it. I would suggest there are at least 150 people working.

It also shows how profitable the playoffs are since you don't have to pay your players which is your biggest expense.

Now we are not, by far, the only team in this situation. San Jose, who has corporate support out of the ying yang also looses money and controls the arena. I would dare say 15 more teams are like this but some have better sponsorship and corporate deals.

So to end this post, it shows how important the following are: ticket prices, sponsorships, butts in the seats, fewer ticket giveaways or discounts, concessions, parking, etc.

We are lucky to have Karmonos but that luck will not be here forever. Time for this baby to walk and get on its feet. I think some people take the Canes for granted and say "it's too expensive." Maybe it is for some, but the last thing we should do as a city and fans is take them for granted.

That is why I cringe when I hear people complain about any and everything about having hockey in Raleigh. It is a privilege, not a right !!!

And get ready for the fight around 2017 when a new arena is on the horizon. That will be a fight that will cause many sleepless nights.

I am not painting a doom picture, but the Canes have been working for years to improve those items and "improved marketing" will help but sounds much more easier than done. If so, every company would do it and there would be no problems.

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Good post.

Give people a picture on what it takes to run a team. Karmanos was quite generous person shredding his own money for 10 years now.

As you said, it's time for this baby to walk, but that might take some time.... could be as long as another 5 or more years... I just hope Karmanos is patient to do just that.

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ever heard of a little company called compuware??? last time i checked karmanos isn't banking on the canes putting food on the table for his family...losses on the canes books are deductible against gains on the books of compuware...when we lose money, karmanos still saves money...it's accounting...bottom line

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Good post.

Give people a picture on what it takes to run a team. Karmanos was quite generous person shredding his own money for 10 years now.

As you said, it's time for this baby to walk, but that might take some time.... could be as long as another 5 or more years... I just hope Karmanos is patient to do just that.

Yea and I heard people boo him at the beginning of 2005 season and I just cringed. I wanted to ask them "Do you really like hockey or are you just some drunk bozo!!!"

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ever heard of a little company called compuware??? last time i checked karmanos isn't banking on the canes putting food on the table for his family...losses on the canes books are deductible against gains on the books of compuware...when we lose money, karmanos still saves money...it's accounting...bottom line

I don't pretend i know corporate accounting.... but if you know better please post your thoughts in the similar fashion as Thunderball did for all us to understand.

Otherwise, why making empty statements.

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ever heard of a little company called compuware??? last time i checked karmanos isn't banking on the canes putting food on the table for his family...losses on the canes books are deductible against gains on the books of compuware...when we lose money, karmanos still saves money...it's accounting...bottom line

That is corporate tax. He does not do his taxes on Turbo Tax. Corporate tax is more complicated. Not to mention Compuware is not that large and is in a struggling mainframce market which if you have looked around, are not as many of those around. Not to mention change of the tecnnology roadmap. Karmonos value, I think is around, $300M to $400M which 30%-40% (I am not sure about this but have read some of this in the past) is probably the Canes. Where Karmonos has made his money is the value of the franchise going up. He will cash out at some time and that why jaws dropped by many on this board when Jr. Karmonos resigned.

People don't continue to loose money no matter what. There are many corprate tax loopholes out there.

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Now we are not, by far, the only team in this situation. San Jose, who has corporate support out of the ying yang also looses money and controls the arena. I would dare say 15 more teams are like this but some have better sponsorship and corporate deals.

If 15 (or even say 10) teams are losing millions per year, then maybe the salary cap needs to come come down. Hockey players may not be the highest paid professional athletes, but many guys make more in year than I'll make in my lifetime. I know athletes in other sports can make more, but if one-third to one-half of the teams in the league can't operate a profit, then that is a serious problem.

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Nice post ThunderBall...had to take a few breaks in reading it :) ...but nice post. The longer term solution, other than the obvious (the team needs more revenue), is for Karmonos not to hold on to the team forever. I'd love to see him sell the team in the next few years to local ownership, perhaps a group of local businessmen with Ron Francis as the lead investor....

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If 15 (or even say 10) teams are losing millions per year, then maybe the salary cap needs to come come down. Hockey players may not be the highest paid professional athletes, but many guys make more in year than I'll make in my lifetime. I know athletes in other sports can make more, but if one-third to one-half of the teams in the league can't operate a profit, then that is a serious problem.

That is exactly what GMs wanted to do and NHLPA was against. Hence we had entire year with no hockey spend behind negotiation table.

Right now salary cap is raising mostly due to the strong canadian dollar. 6 teams from canada are making disproportionally large amount of profit compared to US team.

There is also such thing as profit sharing in NHL, i am not sure how exactly it works.

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Good post.

Give people a picture on what it takes to run a team. Karmanos was quite generous person shredding his own money for 10 years now.

As you said, it's time for this baby to walk, but that might take some time.... could be as long as another 5 or more years... I just hope Karmanos is patient to do just that.

One more point and I am not trying to spread doom and gloom as I have been multiple STH since 2000 and plan on until the day I die but I think the Canes are planning their growth on the population growth and getting more people hooked to hockey.

With the business and population growth here, it is a good plan but the growth rate of hockey fans needs to grow at the same rate or near that level. Also need to grow the sport in other cities like Charlotte. It is happening and they just need to continue. Playoffs help that.

One kind of bad thing about growth in the Triangle is this area is known to many as the place that has little to no income growth with the people that work here. Which means salaries don't keep up with inflation.

By the look of my last raise and the one coming, I could not agree more. :angry: Just means less trips and dinners out to afford hockey tickets :rolleyes:

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I don't pretend i know corporate accounting.... but if you know better please post your thoughts in the similar fashion as Thunderball did for all us to understand.

Otherwise, why making empty statements.

I didn't mean to make empty statements and I apologize if I did so. I don't even know too, too much about it. Just work in public accounting and have dabbled in corporate tax with regards to losses and gains. According to my corporate tax book, and to information provided by people at work (accounting firm)(still could be hearsay), Karmanos can claim and has claimed Canes losses as deductions for Compuware(NOT PERSONAL DEDUCTIONS). And Thunderball, if $120 million in NI a year is struggling, then man I need to pick my game up. :rolleyes:http://phx.corporate-ir.net/phoenix.zhtml?c=63349&p=customOverview' target="_blank">Compuware Financials[/post]

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Nice post ThunderBall...had to take a few breaks in reading it :) ...but nice post. The longer term solution, other than the obvious (the team needs more revenue), is for Karmonos not to hold on to the team forever. I'd love to see him sell the team in the next few years to local ownership, perhaps a group of local businessmen with Ron Francis as the lead investor....

Not sure if Francis has the financial wallet to do so but I think he would be a great minority owner andthe face of the org. Costs of teams are going for $180M-$200M) Think of Mario and the Pens who most think Mario owns them but he has a partner that may be majority owner (Correct me if I am wrong).

I don't think they are hockey fans but I would like our local billionaires too get involved. Goodnight ($8.9B) and John Sall ($4.4B) would make great silent partners (not both since they really don't talk even though they own SAS together) along with Jim Goodman (WRAL) who has stated he is interested. BTW, Goodnight is worth 3 or so Balsillie's. That would make for interesting conversations on a Canadian message board !!!! :P

My ideal ownership group was Peter K and Jason K owning 51% with others owning 49% but with Jason bowing out, I am not sure that will happen. Who knows.....

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And Thunderball, if $120 million in NI a year is struggling, then man I need to pick my game up. :rolleyes:http://phx.corporate-ir.net/phoenix.zhtml?c=63349&p=customOverview' target="_blank">Compuware Financials[/post]

Yea, me too... :P I guess I mean that technolgy is like fish, it starts to rot when it is taken out of the water. What makes money today, does not always make money tomorrow. You really have to be on top of the curve. I work in Tech and I don't doubt he has not made money but as you know, that $121M does not go into Peter K's pocket. Got to keep the shareholders happy. :D From aa technology point, I am not sure Compuware is leading the world with their technolgy roadmaps. Not to say they don't have a solid roadmap but I remember a few years back reading about thier product portfolio and saying they had real challenges ahead, not to mention the large lawsuit Compuware and IBM had between themselves which finally ended.

I don't doubt he does not make money or Compuware does not make money, but I have heard the "tax writeoff" comment since I have become a fan when the team came to Raleigh and I am sure it is a nice thing to throw in the pile before April 15 but I am not sure and really doubt it is Peter K's personal buisness plan. Rather be profitable and buy some other money loosing venture if needed.

JMHO

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Don't know how true this is its just something I've heard here and there and no not recently, but I've heard that Goodnight is interested in becoming a partner. When JK resigned, the whole Goodnight thing was brought back up. PK wants a partner where JK didn't. So who really knows.

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Yea, me too... :P I guess I mean that technolgy is like fish, it starts to rot when it is taken out of the water. What makes money today, does not always make money tomorrow. You really have to be on top of the curve. I work in Tech and I don't doubt he has not made money but as you know, that $121M does not go into Peter K's pocket. Got to keep the shareholders happy. :D From aa technology point, I am not sure Compuware is leading the world with their technolgy roadmaps. Not to say they don't have a solid roadmap but I remember a few years back reading about thier product portfolio and saying they had real challenges ahead, not to mention the large lawsuit Compuware and IBM had between themselves which finally ended.

I don't doubt he does not make money or Compuware does not make money, but I have heard the "tax writeoff" comment since I have become a fan when the team came to Raleigh and I am sure it is a nice thing to throw in the pile before April 15 but I am not sure and really doubt it is Peter K's personal buisness plan. Rather be profitable and buy some other money loosing venture if needed.

JMHO

If I had the salary of the CEO of a publicly traded company, I'd gladly have a "money losing venture." Work all day. Make thousands of dollars every day, go sit in my box at center ice, have some liquor drinks, wake up the next morning, make thousands, and do it all over again. TOUGH LIFE, REALLY SLUMMING IT! (sarcasm)

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