Friedman: Karmanos could, in the future, be majority owner of the Hurricanes once again.

[Fenway]

I don't know what to make of this

31 Thoughts: A 'Code of Conduct' is coming to the NHL - Sportsnet.ca

31 THOUGHTS

1. It got lost in everything else last week, but one thing that threw people for a loop was seeing a current minority owner (Peter Karmanos) contradicted in a statement on NHL letterhead.

There is an additional twist here. The process as set up in Carolina’s current ownership agreement is complex, and may not ever occur — but it is possible that Karmanos could, in the future, be majority owner of the Hurricanes once again.

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[Mightygoose]

Yeah without the details, I don't know what to make of this either. Though the probability is low, Freidman doesn't just throw things out there either.

During the sale, when was Dundon scheduled to buy out the remaining stake?

 

[Svechhammer]

Yeah without the details, I don't know what to make of this either. Though the probability is low, Freidman doesn't just throw things out there either.

During the sale, when was Dundon scheduled to buy out the remaining stake?

Within 3 years

 

[tony d]

Interesting. I wonder how long Dundon will stay as Carolina owner. This article certainly paints a possibility that Karmanos could come back as Carolina owner.

 

[aqib]

With a staged buy-out there is always the chance the buyer doesn't come through. Unless there is something about Dundon's finances we don't know about I don't see what is bringing this on other than him pulling the plug on the AAF

 

[Svechhammer]

Dundon is already spending enough money in the area I don't think he'll pull out now.

The team is actually announcing a new practice facility this week. This was one of his big wants when he initially bought.



There are also plans in the making to undergo a major renovation to the arena in the near future. They have been heavily polling season ticket members and corporations in the area on how different renovation concepts would go. I would expect some kind of announcement there to be made within the next year or so.

 

[HisIceness]

Oh boy, I can't wait for more flight tracking.

 

[tarheelhockey]

I think I get what Friedman's after here. Dundon is building up the team's value, so what if he goes true to form and cashes out at the opportune moment with a massive ROI.

IMO the much more likely thing is that Dundon finds some other, as yet unnamed owner to take the keys. It's very hard to imagine Karmanos being the guy, given the state of his affairs the past few years and given that the NHL has learned hard lessons about cash-poor ownership.

In theory, Karmanos could buy a small percentage to nudge his way back into a majority ownership. But that's an even less likely scenario. Dundon is not stupid... he's not going to hold 49% equity in the organization with 0% executive authority. That's the opposite of how he operates. It will be all or nothing.

 

[Whalers Fan]

I cannot imagine that Karmanos would want a majority ownership stake in the team anymore. He's sold off all his sports holdings -- Hurricanes, Florida Everblades (ECHL) and Plymouth Whalers (OHL), along with the arena in Plymouth -- for reasons that are still relevant. I highly doubt he wants the franchise in Raleigh back.

 

[emptyNedder]

The team is actually announcing a new practice facility this week. This was one of his big wants when he initially bought.

That really wasn't about new ownership—it was already planned. And all spending on the arena is taxpayer money.

think I get what Friedman's after here. Dundon is building up the team's value, so what if he goes true to form and cashes out at the opportune moment with a massive ROI.

The hostile takeover strategy.

I cannot imagine that Karmanos would want a majority ownership stake in the team anymore.

The story keeps changing—Friedman mentions 5 years and Karmanos needing to repurchase. The original story stated 3 years and specified that Karmanos would not be involved. Owners seem to own the narrative as well as the league.

 

[tarheelhockey]

That really wasn't about new ownership—it was already planned. And all spending on the arena is taxpayer money.

I don’t want to stir up **** where there isn’t any, so just saying — don’t take this out of context.

My understanding from an extremely well-placed source is that Dundon hasn’t spent much of his own money on the Hurricanes outside of purchasing the team and covering payroll. If you look closely, everything else is clever leveraging of other people’s money. Now, that doesn’t mean he’s not committed to making things happen... he’s on the hook for for hundreds of millions. But he is doing it the same way he’s always done everything. He positions himself to receive, shall we say, passive income. Look at the way his AFL dealings went down. What appeared at first to be an outright purchase of the league turned out to be something quite different, where he made a relatively minor investment in an effort to get at something very valuable behind the scenes. This is how he operates. I would be interested to know how much actual cash money he has paid into the purchase/payroll, as compared to the revenue and appreciation that he has earned.

My guess (not from a source) is that Friedman’s comment is an aftershock of the NHL’s recent visit to Raleigh. Friedman appears to be picking up on chatter that centers around the idea of Dundon inflating the value of the team without leveraging his own funds, then speculating that he could reap rewards by selling high. Karmanos is ONE possible buyer based on the terms of the sale agreement, which IMO is a triviality that Friedman is either over-emphasizing or using as a clickbaity cover for the broader idea that Dundon playing to an investment strategy.

 

[emptyNedder]

My understanding from an extremely well-placed source is that Dundon hasn’t spent much of his own money on the Hurricanes outside of purchasing the team and covering payroll.

I am an extremely distant from Dundon, but I knew he wasn't spending his own money. In fact, I find it amusing/worrisome that others seem to think he is when it is mostly taxpayer money.

 

[tarheelhockey]

I am an extremely distant from Dundon, but I knew he wasn't spending his own money. In fact, I find it amusing/worrisome that others seem to think he is when it is mostly taxpayer money.

Yeah, the value in Friedman’s remark is in reminding us who we’re in bed with. Dundon is literally one of the best talents in the world for making a very minimal investment and then leveraging it so that other people proceed to fill HIS wallet with THEIR money. The notion of him being a short-term owner is not crazy.

But having had a day to digest it, the idea of Karmanos roaring back... it just seems so weird and far fetched. The guy is in his late 70s, is coming off a phase of family and financial instability, and has moved on to new ventures. If we assume that Dundon would not want to be a minority partner, it would cost PK hundreds of millions to buy back into control of the franchise. That just seems like such an odd, unlikely scenario.

 

[BKIslandersFan]

I am an extremely distant from Dundon, but I knew he wasn't spending his own money. In fact, I find it amusing/worrisome that others seem to think he is when it is mostly taxpayer money.

What did you expect though? Not like spending their own money to refurbish or build an arena is the norm in major league sports. Don’t know how this sets Dundon apart from any other ownership groups.

 

[tarheelhockey]

What did you expect though? Not like spending their own money to refurbish or build an arena is the norm in major league sports. Don’t know how this sets Dundon apart from any other ownership groups.

It's not so much that he's dramatically different from other owners. Just that he is less leveraged into the organization than it would outwardly appear. He has been very smart about letting other people put the actual cash down while he stands to reap the benefits, and that extends to all sorts of things outside of just the arena.

It makes sense, though. You hire a businessman, you expect him to act like a businessman. In this case, this particular businessman has a particular way of going about things and it shows.

 

[Hasbro]

 

[emptyNedder]

Dundon is literally one of the best talents in the world for making a very minimal investment and then leveraging it so that other people proceed to fill HIS wallet with THEIR money.

Too much credit. His AAF minimal investment didn't end with him owning the software.

 

[tarheelhockey]

Too much credit. His AAF minimal investment didn't end with him owning the software.

No, but I bet he calculated that it was worth the risk to try.

 

[Bookie21]

Too much credit. His AAF minimal investment didn't end with him owning the software.

Do you actually believe Dundon lost money on the AAF? Lol. .....


News flash ..Not even close, he may have lost someone else's money, but not his

 

[Negan4Coach]

It's not so much that he's dramatically different from other owners. Just that he is less leveraged into the organization than it would outwardly appear. He has been very smart about letting other people put the actual cash down while he stands to reap the benefits, and that extends to all sorts of things outside of just the arena.

It makes sense, though. You hire a businessman, you expect him to act like a businessman. In this case, this particular businessman has a particular way of going about things and it shows.

So my understanding of why Dundon bought the team was not as an investment (I mean, how great an investment can the Canes be) to make money off of, but because the guy wanted to run a hockey team, as evidenced by how involved he is with the daily goings on of the team. I mean I don't think he does anything other than run the Canes right now, is that correct?

Unlike Karmonous who was an absentee landlord even during the best of times. I can't imagine him buying back into a team he never really gave a crap about and was trying to sell desperately until Dundon came along.

So I get that Dundon is a killer who can turn on a dime to make a buck, but he's already got more money than he can spend- I think he'd more want to demonstrate to the world that he is so awesome he can just waltz into a world he knows nothing about and transform it with his style of business. And he's on the way, but hasn't quite done that yet. I don't think he quits until he brings the cup back here or he gets bored and frustrated if the Canes fall off the radar again.

 

[tarheelhockey]

So my understanding of why Dundon bought the team was not as an investment (I mean, how great an investment can the Canes be) to make money off of, but because the guy wanted to run a hockey team, as evidenced by how involved he is with the daily goings on of the team. I mean I don't think he does anything other than run the Canes right now, is that correct?

He’s still an active businessman outside of the Canes. There was the whole AAF thing, and he’s the majority partner in Carvana and TopGolf. If you look up Dundon Capital Partners, he’s involved in a pretty wide array of businesses. Ordinarily I’d say an investment doesn’t necessarily translate to active management, but... Dundon.

So I get that Dundon is a killer who can turn on a dime to make a buck, but he's already got more money than he can spend- I think he'd more want to demonstrate to the world that he is so awesome he can just waltz into a world he knows nothing about and transform it with his style of business. And he's on the way, but hasn't quite done that yet. I don't think he quits until he brings the cup back here or he gets bored and frustrated if the Canes fall off the radar again.

Don’t get me wrong, I’m not saying he’s trying to turn a quick buck and get out. I think he has a longer horizon with the Canes. If anything, someone looking to REALLY cash in would give it several more years at minimum. That would get him past expansion and also into the new national TV deal, capitalize on arena renovations, allow him to rake in this surge of revenue from attendance/merch, potentially get him to an outdoor game, and hopefully cash in on some more playoff success before unloading a much more valuable franchise at massive capital gains. I find it very hard to imagine he would pull the plug before of all that payoff rolls in.

But the way he has this set up, it’s theoretically plausible that he could still skip out with a massive ROI in the short-term. I feel like Friedman picked up on that possibility and gave it some very unlikely context with a Karmanos connection.

 

[Svechhammer]

Reading between the lines here, I don't think the league is going to want to deal with Karmanos anymore....



And yes, Dundon said a few things early on about how he wanted to own a franchise to the effect that you don't buy one to make a quick Buck.

 

[Boom Boom Apathy]

There's nothing to make of it.

Shortly after he purchased the Canes, Dundon said he had an "out clause" from the moment he bought the team and that he has them in all his business dealings. Said, at the time, that he has no intention of using it though but he's going to always make sure he has one. This really isn't new news as it was well publicized shortly after he bought it. Thought at the time was that the timing was so that Karmanos could get his share of the Seattle expansion money, then he'd fade off into the sunset.

EDIT: Here is an article from April 2018, roughly 4 months after he purchased the majority share of the Canes.

https://www.newsobserver.com/sports/nhl/carolina-hurricanes/article208326414.html#storylink=cpy

When Tom Dundon became the majority owner of the Carolina Hurricanes in January, it was announced he had bought a 61-percent stake in the team, with the option of buying the remaining 39 percent after three years.

Not announced: Dundon also has the option to sell his 61-percent share after three years and leave, he said Monday.

“We’re not going to do that, but it is part of the contract,” Dundon said.

“I have an option,” Dundon said. “That’s how I do deals. What if I didn’t like hockey? It was a nice option to have, but it turns out it looks like it’s unnecessary.”