For those who have been tracking everything daily in the North State Journal and News & Observer and on WRALSportsFan.com and Twitter, you can skip past history lesson at the ————— toward the end.
For those catching up or looking for a refresher, check out my original article on July 13 (only hours after the rumor broke). Though almost a month has passed since that article, I stand by my general assessment of what I think a Chuck Greenberg-led acquisition could mean for the Hurricanes organization and fan base.
Against the backdrop of hot weather, back to school sales and slowest month of the hockey year, the wheels continue to turn on a deal that would see the Carolina Hurricanes sold by the only owner that Canes fans have ever known in Peter Karmanos and acquired by a group led by Chuck Greenberg.
Details and specific are outside of the public domain, but I think we have enough snippets of verified information that the positive but intentionally vague assessment of “wheels continue to turn” is accurate.
Chuck Greenberg prairie dogs in and out of Raleigh
Throughout the process, Chuck Greenberg has yet to say anything formally or publicly on the deal or where it stands, but he has still managed to toss out enough evidence that something is in fact in process with Twitter and the local media serving as communications platforms.
July 24, 2017 – Chuck Greenberg appears in Raleigh making hockey stops.
— Chip Alexander (@ice_chip) July 24, 2017
August 2, 2017 – Chuck Greenberg is in Raleigh again and makes it public information.
— Chuck Greenberg (@chuckgreenberg) August 2, 2017
August 7, 2017 – He has the triangle on his mind.
Taking an informal poll. Does ?pass for a Triangle emoji? Is there a better one? Asking for a friend.
— Chuck Greenberg (@chuckgreenberg) August 8, 2017
August 9, 2017 – Moving on to somewhat more official hockey business, Greenberg meets with the Centennial Authority that manages PNC Arena.
Without formally talking to anyone, Chuck Greenberg has consistently put himself in the public eye at least for Hurricanes fans who care to do even a minimum to check in on the situation.
Peter Karmanos and Don Waddell take a turn
Peter Karmanos acknowledged that he had received an offer on the day that the rumor broke on July 13 making it immediately clear that there was substance to the rumblings. After that, 1400 Edwards Mill Road was pretty quiet about the situation for an extended period of time.
Last week, Peter Karmanos broke a seal of silence since the day the rumor broke when he spoke with Chip Alexander from the News & Observer resulting in an article on August 1 that took a turn at putting information into the public domain. Casting a challenge of sorts, Karmanos said he had 11-12 offers over time, could move on if Greenberg could not pull together the ownership and finished by saying that the price could go up if things dragged on too long. Taken at face value, the combination seems to be an attempt to exert a little bit of pressure on Greenberg in terms of expediting the timeline.
Slipped into the middle article was somewhat surprising news from Don Waddell stating that the team had turned a profit in 2016-17 on the back of strong season ticket renewals and growing sponsorship revenue. The news easily contradicted what simple attendance numbers would have suggested to be the case.
Then perhaps most interesting of all was that the team then went back to the media only a week later when Don Waddell shared additional financial details with Cory Lavalette from the North State Journal in an article published on August 9. Lavalette’s article clarified that the 2016-17 profit was about $2 million and significantly did NOT include the team’s $16.7 million pay out from the Las Vegas expansion. The article goes on to include almost line by line comments on revenue sources that provides a level of insight into the team’s financials that goes deeper than anything I remember seeing over the years.
Reading the tea leaves and use of the media as a public address system
On Chuck Greenberg
He has very clearly gone out of his way to advertise his regular visits to Raleigh using his own Twitter account once but more significantly using the News & Observer as a public address system. I suppose it could be random coincidence or a lucky tip, but Chip Alexander happening to be by the Hurricanes practice facility with photographer Chris Seward in tow no less on a random Monday in late July with nothing but youth hockey going on there seems too much to be coincidence.
The question is why Greenberg is going out of his way to make his time in Raleigh known and what, if anything, he hopes to gain from it. At the most simplistic level, it does create a bit of a marketing buzz around the team that he and his ownership group may soon own, and it also makes a first impression of him as an owner who is out and about in the community. But my hunch is that Greenberg actually making sure he broadcasts his work to the core fan base to gain a bit of leverage in the negotiations if things get dicey at any point along the way. My read on the Caniac Nation is that everyone (count that as 90 percent :-)) is ready to finally end the ownership saga, put it to bed and move on to whatever is next finally. So I think as things progress and the core fan base (read the season ticket holders who drive a significant chunk of revenue) believes that a deal is there to be had, the potential of a backlash from this group if things fall apart increases. The end result could be that the financials of Karmanos passing on this deal and just riding forward another year are damaged by the reaction of the core fan base.
On Peter Karmanos
At the most basic level, Karmanos’ mention of 11 or 12 other teams showing interest, how promising things look financially heading into 2017-18 and the threat of the price going up if things take too long are grabs for leverage in whatever still needs to be negotiated. Karmanos mention of a range for the deal suggests that the original offer had a range with the exact amount to be determined in the final negotiation. Unless Karmanos really finds another bidder which seems unlikely, I cannot imagine he will muster much for leverage with his comments.
But most of the information put forward by Karmanos could easily have been relayed to Greenberg behind closed doors, so the bigger question is what incentive Karmanos has to suddenly push this into the public domain. My best guess is that he is trying to counter what Greenberg is doing. If the deal falls through, talking about how promising the team’s financials are right now and mentioning the possibility of just waiting longer for the value of the team to go up would present the best case possible to the core fan base that waiting will still be okay in the end. And emphasizing the possible delay and lack of an ownership group thus far from Greenberg sets Karmanos up to claim that he did everything in his power to close the deal but that the failure occurred on the other side of the transaction if it breaks down.
On Don Waddell and the broadcast of the team’s financials
The second article by Cory Lavalette on the financials of the team and with an unprecedented level of depth is the most intriguing recent event in terms of playing detective and ‘hypothesizer.’ A couple things make this stand out. First, the team has historically been incredibly hazy with sharing financial information. Second, it is August, and it is not as if the team has ever gone out of its way to share much in terms of financials. So why now? And finally, the team seemingly already took one try to broadcast some of this information into the public only a week earlier. It is unclear whether Chip Alexander had more of these details and just chose not to include them in his article or if perhaps he just did not get to the level of depth desired in the discussion. Regardless, it looks pretty obvious that the team went out of its way to have another discussion aimed at pushing more of the financial details into the public domain.
So the big question is what Karmanos and the team has to gain by making a strong assertion that the team had a strong 2016-17 season financially, that it was based primarily on sustainable financials not just Las Vegas money and to put forward a bunch of details to try to validate it in the face of an attendance smell test that does not line up.
As noted above, while it could reinforce the private conversations and information exchange, I doubt the driver is communicating the promising future of the team to Chuck Greenberg. Karmanos does want to assert this viewpoint, but in terms of negotiating with Greenberg, it is not necessary to use a public forum to reach him.
Again, it comes down to thinking about who in the general public, Karmanos would want to market to. I think it could be twofold. First, I think Karmanos wants this information in front of the core fan base. If the deal falls through, it is the best he can do to minimize the inevitable ‘the sky is falling’ reprise from the core fan base. He is making his best possible claim to ‘it will be okay; we are in good shape financially’ in the event he needs it.
Second, I think publishing a bunch of promising financials that suggest that the team is in better shape financially than headline attendance numbers might suggest represents Karmanos best effort to generate interest and pull in another interested party or at least set the table as best he can for bluffing. I am not sure how much water it would hold and/or how good of a read Greenberg and his team have on other potential suitors and the potential for any of them to enter, but Karmanos could at least try to suggest that showing how strong the team was financially in 2016-17 and also is going forward has brought another potential bidder into the process. Even the potential of another party at the table changes the game and the leverage that Greenberg has in terms of the final purchase amount and other pending terms.
Having been close to a couple deals on a much smaller scale and in a non-sports realm, the mix of straightforward financials and analysis, people/personalities/egos and sometimes sheer poker playing ability can be fascinating. The only downside is that since most of it will go on behind closed doors, we will never know exactly the motivation and rationale was for certain events nor will we learn what went on behind closed doors.
But as long as we get a smooth transition to new ownership that believes in Raleigh as a hockey market, that will be just fine.
What say you Canes fans?
What do you make of Greenberg’s obvious attempt to stay in the public view and mind locally even if there is no concrete information coming out of it?
What do you make of Karmanos and Waddell’s double try to get more detailed positive financial information out into the public domain?
What is your latest guess for if and when a deal closes?
Who thinks this article is the stuff of conspiracy theorists and that the reality of the situation is much simpler?