Hurricanes on PNC Arena lease negotiations: ‘The economics of the deal have to change in our favor’

[Ted Hoffman]

I'm not defending the ACC here, because well, they're the ACC, but how much of it is TV? ESPN is always coming up with these non-conference "clashes" but never has it finalized until the last minute. And unfortunately for the Hurricanes, ESPN throws big money at the schools for this stuff.

I believe every game is televised. Not sure if ESPN carries every game, but I'm pretty certain it carries a large majority of them. And ESPN's last-minute scheduling is much more about "whoa, this team is really good, let's get them on TV every chance we possibly can" than it is trying to get all schools exposure. If the latter happens, it's purely accidental.

It's possible that the new ACC Network alleviates some of this because games will move there, but with the league going to a 20-game schedule that's "only" 15 extra games but it complicates things some more. Plus, with talk of season-opening conference games, that will create a couple more potential we might need that dates on top of all the others currently being requested.

You're absolutely right about ESPN throwing big money at schools, though. Division I basketball universities might as well have presidents and ADs strutting around in sexy lingerie the way they whore the players out at times to the highest bidder for national TV exposure, while the presidents talk about protecting the integrity of the student-athlete.

 

[NCRanger]

It's not just basketball scheduling conflicts. Football throws a giant monkey wrench in there too, since those ACC game times are not known until 2 weeks before game day, sometimes 6 days prior.

2 Saturdays are gone thanks to the Fair.

At least 3 more due to football. There would be a way to have a noon kickoff and a 7:30 hockey game without too much conflict, but that's not guaranteed because of TV controlling kickoff times. Even if not a 'Canes game, a concert.

Then basketball...

Even as great as the changeover crew is at PNC, the ice is usually abysmal when State plays an afternoon game and the Canes play at night.

All that said, this was a situation Dundon had to know about going into the purchase. He has to deal with the mistakes Karmanos made until he completely can control the negotiations.

 

[NCRanger]

I'd have to do some digging to find out the exact numbers of what can and can't be blocked off, but from what I've read at least this year there were at least 3 saturday dates that were completely blocked off by State where the arena went unused because the ACC ended up not using those dates and there was no concert or the like that could be found to fill the time slot with the kind of turnaround that was available after the ACC released its schedule. There may have been a few others instances where replacement acts were able to be booked for those dates with acts that would be of lower impact than what would have been available if the NCSU schedule had been known ahead of time. That's what I'd have to do my digging to find out. But simply put to make the arena stronger economically it needs to become the case where State and the ACC have to schedule around the Canes, not the other way around. They just simply can't be able to block off even close to the number of dates that they currently are able to.

Probably should have responded to your comment directly instead of having back to back comments.

As for the dates, it's at least 8 Saturdays a season.

2 Fair Saturdays.

At least 3 football Saturdays (although the dates are known, the times aren't, which block the date completely).

At least 3 basketball Saturdays, but this could also be a Sunday.

 

[garnetpalmetto]

Out of curiosity, how many dates does the late scheduling impact? I've known about the NC State side of scheduling impacts, but I've never known just how many. As an outsider, one would think that the Canes and concert schedules would be plugged in first and then men's basketball scheduling around that. Strictly speaking from a revenue standpoint.

Thanks DG.

Wondering too if there was something in the lease that couldn't be traded off for one another (i.e. concession). You'd think that with all this time they've been there, even with the last negotiation, the flip-flop of priority couldn't be negotiated. Maybe I'm just trying to shoehorn this in too much perhaps

I mean, the Canes pay much more rent than most teams (Lightning's case it was around $580K 6 years ago last I checked) that the building isn't theirs, so unless Capital Expenditures are majorly (or wholly) handled by CA then there has to be something else to it.

Just a headscratcher to me because Georgetown and the Caps have had no issues like this, same with St. John's. That last one though, no offense to Red Storm fans but... I mean Knicks, Rangers, and concerts so they wouldn't have much sway regarding scheduling priority correct?

My point is, there's plenty of other examples where scheduling isn't an issue in NCAA co-habitated arenas.

Dave nailed down the 3-4 dates. The other issue was NC State's last Athletics Director, Debbie Yow (sister of former women's basketball coach Kay Yow), sought to make an impact in the wake of Lee Fowler's departure and one way she sought to do that was to get more aggressive with scheduling. That issue was litigated in BoH at the time and essentially came down to the new kid in town wanting to flex her muscles on Rutherford and they had their blowout in public but it ultimately blew over. That said, NC State does have scheduling priority so you wind up with the dead dates that Dave mentions.

Another issue, with regards to targeting concerts is that you have three indoor concert venues in NC - Spectrum Center in Charlotte (opened in 2005, seats 13,376 to 18,504 depending on setup), Greensboro Coliseum (opened in 1959 and has undergone multiple renovations and expansions, seats up to 23,500), and PNC Arena (opened in 1999, seats up to 19,500). For most major shows, Greensboro (largest capacity, convenient to Metrolina, the Triad, and the Triangle) or Charlotte (newest, in largest metro area in NC) are the bigger draws. PNC needs to look into the upgrades that have been mentioned to stay competitive as it enters its 20th year of operation.

I'm not defending the ACC here, because well, they're the ACC, but how much of it is TV? ESPN is always coming up with these non-conference "clashes" but never has it finalized until the last minute. And unfortunately for the Hurricanes, ESPN throws big money at the schools for this stuff.

I can't recall the history. Were the Canes there and then the arena was built, or was the arena built first with the idea that NC State was the main tenant? From everyone's perspective(including NC State), they should have built an on campus arena, IMHO.

the canes and ncsu built the arena together

technically, the arena is on-campus as the football arena is in the same parking lot. the vet school campus is right there also

Partially right here. The arena was originally conceived to be NC State's and NC State's alone as they sought to move somewhere bigger and more modern than Reynolds Coliseum (which is located in the heart of NC State's campus) and funds were originally raised on that premise. NC State booster and former NC legislator Wendell Murphy, owner of Murphy Farms (now part of Smithfield Pork), did a lot of the groundwork in the legislature to get the arena approved and, initially, was going to hold the naming rights to the arena, as I understand it. When Karmanos looked at options to relocate the Whalers, the plans got changed to accommodate both the basketball and hockey teams and Karmanos put some of his own money in for the changes and two months after the announcement was made that the Whalers would relocate to Raleigh, ground was broken on PNC (which is why the Canes had to play their first two seasons in Greensboro Coliseum). So while the arena was built with both teams in mind it was originally conceived as primarily being for NC State's men's basketball team.

 

[NCRanger]

Another issue, with regards to targeting concerts is that you have three indoor concert venues in NC - Spectrum Center in Charlotte (opened in 2005, seats 13,376 to 18,504 depending on setup), Greensboro Coliseum (opened in 1959 and has undergone multiple renovations and expansions, seats up to 23,500), and PNC Arena (opened in 1999, seats up to 19,500). For most major shows, Greensboro (largest capacity, convenient to Metrolina, the Triad, and the Triangle) or Charlotte (newest, in largest metro area in NC) are the bigger draws. PNC needs to look into the upgrades that have been mentioned to stay competitive as it enters its 20th year of operation.

Partially right here. The arena was originally conceived to be NC State's and NC State's alone as they sought to move somewhere bigger and more modern than Reynolds Coliseum (which is located in the heart of NC State's campus) and funds were originally raised on that premise. NC State booster and former NC legislator Wendell Murphy, owner of Murphy Farms (now part of Smithfield Pork), did a lot of the groundwork in the legislature to get the arena approved and, initially, was going to hold the naming rights to the arena, as I understand it. When Karmanos looked at options to relocate the Whalers, the plans got changed to accommodate both the basketball and hockey teams and Karmanos put some of his own money in for the changes and two months after the announcement was made that the Whalers would relocate to Raleigh, ground was broken on PNC (which is why the Canes had to play their first two seasons in Greensboro Coliseum). So while the arena was built with both teams in mind it was originally conceived as primarily being for NC State's men's basketball team.

It seems like the state competes against itself for concerts. It doesn't seem like Charlotte gets a great offering either.

The whole basis for the NC State basketball arena was because Jimmy V went on one of his famous rants about how he wanted his own "Dean Dome" out by Carter-Finley. It was supposed to be a 22,000 seat basketball arena. Hockey wasn't ever part of the deal. Then Karmanos came into the picture and everything you said is spot on.

 

[garnetpalmetto]

It seems like the state competes against itself for concerts. It doesn't seem like Charlotte gets a great offering either.

The whole basis for the NC State basketball arena was because Jimmy V went on one of his famous rants about how he wanted his own "Dean Dome" out by Carter-Finley. It was supposed to be a 22,000 seat basketball arena. Hockey wasn't ever part of the deal. Then Karmanos came into the picture and everything you said is spot on.

I guess I (perhaps incorrectly) assumed y'all got the big concerts then

I looked into this at one point and here's the current concert/event schedule for this year at all three venues without pro/collegiate sports factored in. Unique events (as far as I can tell) at each venue are bolded:

PNC Arena
Justin Timberlake (1/6)
Trevor Noah (1/19)
Cher (1/27)
Metallica (1/28)
Cirque du Soleil (2/7 - 2/10)
Cinch World's Toughest Rodeo (2/23)
Monster Jam (3/9 - 3/10)
Elton John (3/12)
Funny as Ish Comedy Tour (3/15)
Mumford & Sons (3/17)
Winter Jam Tour (3/22)
Millennium Tour (3/29)
Dr. David Jeremiah Overcomer Tour (4/5)
KISS (4/6)
Casting Crowns (4/19)
Women's Empowerment (4/27)
Paul McCartney (5/27)
Ariana Grande (6/4 - canceled)
Twenty One Pilots (6/11)
New Kids on the Block (7/7)
Backstreet Boys (8/20)
Carrie Underwood (9/30)

Greensboro Coliseum
Winter Jam (2/23)
Eric Church (3/15)
Millennium Tour (3/17)
Harlem Globetrotters (3/24)
Alabama (4/5)
Chris Tomlin (4/7)
Kenny Chesney (4/12)
Cracking Up Comedy Tour (4/13)
Legends of Soul (4/19)
Carrie Underwood (5/1)
Bobby Brown & BelBivDevoe (5/18)
Pentatonix (5/30)
4 Latidos (6/1)
Jojo Siwa (7/16)
Marco Antonio Solis (8/23)
Chris Stapleton (10/19)

Spectrum Center
Justin Timberlake (1/8)
Cher (1/29)
Fleetwood Mac (2/24)
WWE Smackdown Live (2/26)
Pink (3/9)
Astroworld (3/24)
Millennium Tour (4/6)
Ariana Grande (6/10)
Twenty One Pilots (6/12)
New Kids on the Block (7/9)
Cirque du Soleil (7/17 - 7/21)
John Mayer (8/9)
Queen + Adam Lambert (8/23)
Alan Jackson (8/24)
Elton John (11/6)

So some overlap between Raleigh and Charlotte - you guys get Fleetwood Mac, Pink, Travis Scott, John Mayer and Queen, though.

 

[the halleJOKEL]

travis scott was at PNC already in november

 

[BigBadBruins7708]

I mean, I'd give college basketball preference to my arena in North Carolina too...hell that's a license to print money

 

[garnetpalmetto]

travis scott was at PNC already in november

Thanks, halle. Not a huge Travis Scott fan so I wasn't sure if he'd also come through. I've removed the bold from that show in Charlotte accordingly.

 

[NCRanger]

I mean, I'd give college basketball preference to my arena in North Carolina too...hell that's a license to print money

Except when the myth is not reality.

College basketball just does not have the grip on the state as it did 20-30 years ago, ESPECIALLY, when it comes to NC State. (And in full disclosure, I am a State fan, and when I lived in the Triangle, a Wolfpack Club member.)

Tickets to the ACC Tournament used to be an almost impossible get. Now, there are public sales and seats go unsold, even in Greensboro and Charlotte.

To the topic at hand, for whatever reason, the Hurricanes have always drawn very well on Saturday nights, like unexpectedly well. State will draw the same crowd on any afternoon/evening, unless it's against chapel hill or dook. State non-conference games, which are sometimes scheduled for Friday or Saturday nights in November/December, draw maybe 11,000. The 'Canes or a concert would easily outdraw that. That's the issue. It forces the Canes to play a weird 1/3/5 PM Sunday game, which really doesn't do that well, or it's made a weekday night game.

For example, take a Thanksgiving weekend.

Canes play Wednesday night.
State basketball plays Directional U. non-conference Friday night (draws 11,000)
State football plays chapel hill at home on Saturday
State basketball plays St. Hopeless of the Perpetual Loss non-conference on Sunday (draws 9,500)
Canes can't play at home until Monday night.

Canes lose a potentially big draw, plus the schedule gets screwy.

Then figure 7 more Saturday nights that have similar conflicts...

I'm not saying the Hurricanes are innocent victims here as the ownership knew the conflicts when they entered the partnership 20+ years ago. However, they do have a more than legitimate point.

 

[the halleJOKEL]

Thanks, halle. Not a huge Travis Scott fan so I wasn't sure if he'd also come through. I've removed the bold from that show in Charlotte accordingly.

me either, i just remember seeing the poster above the urinals during games. that list at PNC is honestly one of the better sets of concerts they have had there in a decade between JT, metallica, paul mccartney, etc.

 

[blueandgoldguy]

https://www.pollstar.com/Chart/2018...deTicketSalesTop100AmphitheatreVenues_693.pdf

Raleigh ranked 14th for ticket sales worldwide for their amphitheatre last year. That would suggest a majority of concerts to hit Raleigh occur at this venue between April to October, and not the arena.

Are a good portion of the outdoor amphitheatres in the US operated by Live Nation? If so, it would be in their interest to book as many events for these venues to make full use of them. I'm not sure a new downtown arena would see a noticeable increase in concerts, if that were the case. Of course, there are concerts from November to March, but it seems like majority of tours happen during the warmer months.

 

[HisIceness]

Someone already mentioned that Valvano wanted his own "Dean Dome" and that is correct. From what I remember, the goal was to have a new basketball only arena in time for either the 89-90 or 90-91 season, this was before the allegations against Valvano that ultimately caused him to step down in 1990, and that kind of threw a monkey wrench into things. The idea was still out there though.

It wasn't until about 1995 or so that plans began heating up again and the idea of minor league Hockey also sharing the joint came into play. The Raleigh Icecaps became an unexpected hit in the early 90s and there was the expectation that they would jump to the AHL by 1998 or so. Even as Raleigh was growing like a weed in 1995, if you would have told someone the city would receive an NHL franchise by 1997 they would have laughed at you.

The history of the building from now and going back to 1983 when Valvano first dreamed about it is quite fascinating.

 

[Fenway]

It whould pretty much take the only open eastern market off the table if the sens went to Quebec City

Cleveland could be a dark horse but the Blue Jackets would fight it. Forget about Hartford as Connecticut has real budget problems as the casino revenue is dropping rapidly and will take another hit when the huge casino 3 miles from downtown Boston opens in June.

IF a NHL ready arena sprung up in the Atlanta burbs maybe.

In Canada the only option if QC gets a team in somewhere in or around Toronto.

 

[93LEAFS]

Cleveland could be a dark horse but the Blue Jackets would fight it. Forget about Hartford as Connecticut has real budget problems as the casino revenue is dropping rapidly and will take another hit when the huge casino 3 miles from downtown Boston opens in June.

IF a NHL ready arena sprung up in the Atlanta burbs maybe.

In Canada the only option if QC gets a team in somewhere in or around Toronto.

I'd be pretty surprised if Cleveland was capable of being a big 4 sports city at the moment. It feels like a city that its either NBA or NHL and not both. They were smart to go to Columbus. They would be the smallest city with all 4 major sports teams if they get one.

My guess would be to look West and just move someone from the Central over. I'm sure Chicago or Nashville would be happy to join the East.

Who in the East currently has a somewhat usable arena outside of QC and maybe Hamilton? I guess Cleveland would be one of the few fits, although, I don't think it would work out well. Orlando has an arena that could be used, and it might be just as viable as Cleveland. Although, that too would be a terrible idea. Same with Indianapolis. It may have even more territorial issues with its proximity to Tampa. The only other somewhat reasonable candidates don't have anything resembling a usable arena like Baltimore, or Cincinatti. Louisville might work and it has a viable arena, but I don't see that happening.

 

[Fenway]

My guess would be to look West and just move someone from the Central over. I'm sure Chicago or Nashville would be happy to join the East.

Who in the East currently has a somewhat usable arena outside of QC and maybe Hamilton? I guess Cleveland would be one of the few fits, although, I don't think it would work out well. Orlando has an arena that could be used, and it might be just as viable as Cleveland. Although, that too would be a terrible idea. Same with Indianapolis. It may have even more territorial issues with its proximity to Tampa. The only other somewhat reasonable candidates don't have anything resembling a usable arena like Baltimore, or Cincinatti. Louisville might work and it has a viable arena, but I don't see that happening.

Chicago would move east in a heartbeat if they could.

The reality is a market is defined not only by the ability to sell out the arena but the RSN territory that can be created. Nashville and St. Louis today have a huge footprint simply on how cable operators treat RSN's. That is what makes Seattle very viable and Houston desirable.

Forbes attempts to measure team values every year and while Bettman skoffs at their list, he doesn't produce figures that discredit Forbes either.

The wealthiest teams share one common denominator - very healthy local TV contracts. Personally, I think Forbes has underestimated the Bruins worth because it is impossible to sort out how Jacobs and family owned Delaware North deal with the entire Boston operation.

The Business Of Hockey

Carolina has debt service issues they didn't have with Karmanos.

Carolina Hurricanes on the Forbes The Business of Hockey List

It bears watching how the Canes draw in the final 2 months of this season as they are making a legitimate playoff push. Not helping is the casual fans in the Triangle will be watching March Madness with UNC, NC State and Duke being involved.

A man that I worked with in Chicago in the early 80's who went back to Greensboro, the late Rich Brenner, told me countless times that the Hurricanes would have fared much better in Greensboro than in Raleigh because even though it was a smaller market the locals would have embraced it and they would attract puckheads from both Raleigh and Charlotte and be a true Carolina team.

 

[HisIceness]

@Fenway with all due respect to your friend I have to disagree. Greensboro is a good city in its own right but it's not a city built for full time major league sports.

 

[spockBokk]

@Fenway with all due respect to your friend I have to disagree. Greensboro is a good city in its own right but it's not a city built for full time major league sports.

Agree. I lived in Greensboro for a few years and got my Bachelors from the University of NC-Greensboro. It's a nice city and the Triad area (Greensboro/Winston-Salem/High Point) is growing, but it's not close to the market that the Raleigh-Durham area is.

I wonder how an NHL team would draw in Charlotte though. Lots of transplants here, like the RDU area and the Checkers do well here. Living in the Charlotte area, it always has amazed me how inept the Canes have been at marketing here and in the overall state of NC outside of the RDU area. Knowledge of the team is very limited outside of Raleigh. Heck, when they won the cup in 2006 and I had been living in the Charlotte area just over a year, I got asked over and over at work that wasn't it great that the Checkers had just won the cup. I don't know how many times I had to explain that one...

 

[NCRanger]

@Fenway with all due respect to your friend I have to disagree. Greensboro is a good city in its own right but it's not a city built for full time major league sports.

And the other problem is that people who don't live here think that Greensboro is close to both Raleigh and Charlotte.

It really isn't. Raleigh is about an hour and twenty minutes, Charlotte, an hour and a half. It's just a little too far to be realistic.

It would be like expecting Philadelphia and New Haven to travel to New York.

 

[Centrum Hockey]

Cleveland could be a dark horse but the Blue Jackets would fight it. Forget about Hartford as Connecticut has real budget problems as the casino revenue is dropping rapidly and will take another hit when the huge casino 3 miles from downtown Boston opens in June.

IF a NHL ready arena sprung up in the Atlanta burbs maybe.

In Canada the only option if QC gets a team in somewhere in or around Toronto.

the XL center is in really bad shape if any NHL owner looks at New England the only arena they should look at is the duckin donuts center

 

[CHRDANHUTCH]

the XL center is in really bad shape if any NHL owner looks at New England the only arena they should look at is the duckin donuts center

Providence won't be happening, Centrum.... Worcester or Manchester might be options..... Boston essentially controls that market even if they don't indirectly own/operate the franchise, it is generally understood, that Boston essentially owns Providence just like the trend was with the California teams leaving when they did

the only reason the Rangers are in Hartford is the proximity to MSG, WHICH is the other factored equation among affiliates... unless the owner/operator has a favorable deal..... ie Binghamton, Utica....

 

[garnetpalmetto]

https://www.pollstar.com/Chart/2018...deTicketSalesTop100AmphitheatreVenues_693.pdf

Raleigh ranked 14th for ticket sales worldwide for their amphitheatre last year. That would suggest a majority of concerts to hit Raleigh occur at this venue between April to October, and not the arena.

Are a good portion of the outdoor amphitheatres in the US operated by Live Nation? If so, it would be in their interest to book as many events for these venues to make full use of them. I'm not sure a new downtown arena would see a noticeable increase in concerts, if that were the case. Of course, there are concerts from November to March, but it seems like majority of tours happen during the warmer months.

There's actually two amphitheatres in Raleigh which somewhat compete against each other - Walnut Creek, which is the one you identify at #14, and Red Hat Amphitheatre, which is at #79. Walnut Creek is larger (seats 20,601) and is on the outskirts of downtown Raleigh while Red Hat is smaller (5,990) but is in downtown Raleigh proper. There's also a third outdoor arena in the area, Koka Booth Amphitheatre in Cary. It's larger than Red Hat at 7,000. Red Hat and Walnut Creek are both Live Nation venues while Koka Booth isn't.

 

[Centrum Hockey]

Providence won't be happening, Centrum.... Worcester or Manchester might be options..... Boston essentially controls that market even if they don't indirectly own/operate the franchise, it is generally understood, that Boston essentially owns Providence just like the trend was with the California teams leaving when they did

the only reason the Rangers are in Hartford is the proximity to MSG, WHICH is the other factored equation among affiliates... unless the owner/operator has a favorable deal..... ie Binghamton, Utica....

Webster bank arena on the other side of the state is in much better condition than Hartford and its close to NYC. A NHL version of the Providence reds would do well and they could get their own local TV and radio contracts it would probably never happen but it makes more sense than the NHL returning to Hartford

 

[CHRDANHUTCH]

Webster bank arena on the other side of the state is in much better condition and its close to NYC. A NHL version of the Providence reds would do well and they could get their own local TV and radio contracts it would probably never happen but it makes more sense than the NHL returning to Hartford

NO, Centrum, the Islanders are heading to Belmont, more than likely, they're not allowed to leave Metro New York because of the television deal, among other ancillary issues.....

forget the Providence Reds.... they are the current Hartford franchise by lineage..... that's how Binghamton got AHL pro hockey with the Dusters, after being blocked by the AHL in Portland and Spectra, who at the time owned Philadelphia, that's why Cross Arena looks that way outside Aesthetically... IT IS MODELED AFTER THE Spectrum.... which is why the Phantoms had to temporarily go to Glens Falls while Allentown built the PPL Center

 

[HisIceness]

Agree. I lived in Greensboro for a few years and got my Bachelors from the University of NC-Greensboro. It's a nice city and the Triad area (Greensboro/Winston-Salem/High Point) is growing, but it's not close to the market that the Raleigh-Durham area is.

I wonder how an NHL team would draw in Charlotte though. Lots of transplants here, like the RDU area and the Checkers do well here. Living in the Charlotte area, it always has amazed me how inept the Canes have been at marketing here and in the overall state of NC outside of the RDU area. Knowledge of the team is very limited outside of Raleigh. Heck, when they won the cup in 2006 and I had been living in the Charlotte area just over a year, I got asked over and over at work that wasn't it great that the Checkers had just won the cup. I don't know how many times I had to explain that one...

If it wasn't for the Hornets, I think Charlotte could do reasonably well with an NHL team. The problem is, well, the NBA has been here for 30 years and fought to get back into the market after the original Hornets left. To put it simply, this city falls into a similar category with cities like Portland, Indianapolis, Orlando, and Nashville. Big enough for one but not both.

I do wish the Canes would market themselves more here and elsewhere, that I do agree with you on. The Bobcats in their 7 win season were promoting themselves from Asheville to Wilmington to Raleigh to Columbia to Charleston and the Triad. I saw it and couldn't understand why the Canes wouldn't do the same outside one preseason game in Charlotte.