Canes owner seeks partner

RALEIGH -- For years, Carolina Hurricanes owner Peter Karmanos Jr. said he wanted to find a local investor to buy a minority share of the team.

Karmanos is now offering a full 49 percent and has hired a New York investment firm to help him sell it.

"I believe the Carolina Hurricanes are a community asset," Karmanos, a Detroit resident, said Monday. "It would make sense to have a partner who lives and works in the Raleigh area."

Karmanos stressed he was not looking to sell the team, saying, "That's my baby." He said the death of Hurricanes co-owner Thomas Thewes two years ago influenced the decision to hire Allen & Company to sell Thewes' share. In recent years the company found buyers for the National Hockey League's Pittsburgh Penguins and the National Basketball Association's Cleveland Cavaliers.

"My partner died a couple of years ago, and I want someone to replace him," Karmanos said. "I have a responsibility to my partner and friend to get someone to buy his share for estate purposes."

Thewes, who co-founded the Detroit-based software company Compuware Corp. with Karmanos and Allen Cutting, died on Sept. 28, 2008, at age 76.

Jim Rutherford, president and general manager of the Hurricanes, said Thewes owned 49 percent of the team.

"Peter believes in the market and the growth of the market," Rutherford said. "This would give Peter a partner and would strengthen our organization."

While a new investor or investor group would have a hand in management decisions, Karmanos would remain majority owner and represent the Hurricanes at the league's board of governors meetings, where NHL issues are discussed.

With Karmanos continuing to live in Detroit, local representation within the ownership group would further ensure the stability of the team in the Triangle. Rutherford reiterated Monday, however, that Karmanos and the Hurricanes are committed to remaining in Raleigh regardless of who buys in.

The home team

David Carter, executive director of the University of Southern California Sports Business Institute, said some form of local ownership benefits professional teams.

"It helps with sponsors and fans to have someone with a vested interest in their hometown," he said. "The fans, in particular, like the notion of someone in their business community being involved."

The market for pro hockey teams could be a crowded one, with the Sports Business Journal reporting that the NHL's Atlanta Thrashers, Phoenix Coyotes and Dallas Stars all are up for sale.

Karmanos and Thewes bought the franchise, then the Hartford Whalers, in June 1994 for $47.5 million. In its most recent team valuations, Forbes pegged the value of the Hurricanes at $177 million, which ranked 21st in the 30-team league.

"It certainly should be a buyers market," USC's Carter said. "In sports, there are two or three teams at one time that are for sale, like Phoenix. Those are the two or three we know about, and there are a handful of others behind the scenes positioning themselves, so there could be a half-dozen in play.

Locally, business leaders praised the possibility of some local ownership for the Hurricanes, although no one publicly expressed interest Monday in buying a share of the team.

Harvey Schmitt, president and CEO of the Greater Raleigh Chamber of Commerce, said that the Hurricanes have created a "branding of Raleigh and the region" and that securing a local owner would enhance that.

"It would be terrific for the Hurricanes to find someone locally to be a part of the team," Schmitt said. "I think the business community and the community in general have adopted the Hurricanes, and a local ownership in the team would only cement that relationship into the future.

"I hope there are folks locally who see the benefit of the team and that they are a tremendous asset. The value of having the Hurricanes is part of the sales pitch made to businesses looking to move into the market."

Jim Cain, a Raleigh lawyer and former Hurricanes president, said a local investor or group of investors would put a "community face and voice" on the team.

"It's always good to have someone with that abiding commitment to the community who understands the role the team plays in the community," he said.

Any potential investor would have to consider the financial health of the Hurricanes franchise before committing.

'A huge financial hit' in '09

Three years after winning the Stanley Cup, the Hurricanes broke even financially in the 2008-2009 season, when they reached the Eastern Conference finals in the Stanley Cup playoffs. The Canes failed to reach the playoffs this season, however, and regular-season attendance declined. Karmanos said during the season that the team would take a "huge financial hit."

The team has released no financial figures for the 2009-10 season, which Rutherford has called, "a year Mr. Karmanos is not comfortable with." The cost-cutting moves included trades in February and March that Rutherford said would save the team $2 million in salary this past season.

But Karmanos said the financial health of the NHL was stronger than that of other leagues.

"Hockey is in great shape financially," he said.