Peter Karmanos Jr. said Tuesday he is in the process of selling the Carolina Hurricanes, a franchise he has owned since 1994, and that the asking price is about $500 million – for now.
Karmanos said a term sheet is in place with a potential ownership group headed by Chuck Greenberg, a sports attorney and former CEO of the Texas Rangers. But he cautioned, “There is no purchase agreement.”
Until Tuesday, Karmanos had not spoken publicly or confirmed that Greenberg’s group was seeking to buy the Hurricanes for about $500 million. Bloomberg News first reported the offer from Greenberg on July 13, and a Hurricanes spokesman released a statement later that day that said Karmanos was considering all of his options, including retaining ownership of the team.
Karmanos said Tuesday that 11 or 12 groups “at one time or another” had shown interest in buying the team, which he moved to Raleigh in 1997 from Hartford, Conn., and renamed the Carolina Hurricanes. He said he liked Greenberg and was giving Greenberg time to finalize a ownership team.
“Once he’s done that we’re going to examine his offer and see if it cuts the mustard,” Karmanos said. “He was supposed to be done a while ago. I like working with Chuck ... (but) if we get a few more weeks down the road and he can’t raise enough money, I’m going to tell him sayonara.”
Karmanos said the final price “may shake out” between $450 million and $500 million. He did not say how much assumed debt would be a part of the transaction -- it’s thought to be about $100 million -- but said the deal would not include the Florida Everblades, an ECHL team owned by Karmanos, and the Florida arena.
“If I have to go back, the price is going up – maybe 550, maybe 600 (million dollars),” Karmanos said. “The team is on the rise. If I have to wait through this season and we have a magnificent year and we again run the team on a positive, even-up (financial) basis like we did last year, the value will increase significantly.”
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 -- both selling points for a potential buyer.
“Our sponsorship revenue is higher than it’s ever been, even in spite of the fact we haven’t been in the playoffs in (eight) years,” Karmanos said.
Greenberg’s group could include many of the investment partners that Karmanos has incorporated into team ownership in the past six years while also bringing in others from the area. In a trip to Raleigh last week, Greenberg is said to have met with several potential investors.
Karmanos praised Raleigh and the Triangle as a fast-growing market with high per-capita income. He praised PNC Arena, the Hurricanes’ arena lease and cited the good working relationship the team has had with the Centennial Authority, the arena landlord.
“My problem is I’m 74 years old and I have four little kids at home, which changes the dynamic enormously,” he said. “I don’t want to leave my family in a really tough spot, by having this huge liquid asset and forcing a fire sale at that point in time. I’m trying to do what I think is best for the team and for my family, and for my investors.”
Both Karmanos and Greenberg have indicated that a sale, if completed, would keep the team in Raleigh. Karmanos said that has never been in doubt, noting the league is committed to having a team in the Triangle.
“That team’s not moving, no matter who owns it,” he said.
Karmanos said he is excited about the team’s potential for the upcoming season. He said general manager Ron Francis deserves the accolades he has received for his rebuild of the team through the draft and player development, and the offseason moves this year that included the acquisition of goalie Scott Darling and signing of free-agent forward Justin Williams, a member of the Canes’ 2006 Stanley Cup champions.
Regardless of the new buyer, Karmanos said he would like to remain involved with the team, at least in an advisory role. He’s in the Hockey Hall of Fame and U.S. Hockey Hall of Fame and believes his expertise as a longtime NHL owner and Stanley Cup winner would be an asset.
“I’ve done enough deals, bought enough companies, to understand when you sell your company, you sell your company,” Karmanos said. “If you sell your team, you sell your team. I would just like to hang around the edges, help them when they need help. But when you sell the team, you sell the team.”