Karmanos: new investors took 'leap of faith'

Staff writerNovember 4, 2011 

Carolina Hurricanes owner Peter Karmanos Jr., talking today about his 10 new investment partners, said the group took a "real leap of faith" in buying into the team.

Why a leap of faith?

"When you invest as a minority investor in a sports team where it's difficult to figure out the value of the sports team, you sort of have to have a leap of faith," Karmanos said at a news conference at the RBC Center. "They know they're not going to come in and say, 'Geez, I think it's time to trade so-and-so and have that happen, all right?

"It's very encouraging that they thought enough of the Hurricanes and thought enough of our organization to make those kind of investments. ... It shows how important they believe the Hurricanes are to the Triangle area."

The investment partners, who include Canes president and general manager Jim Rutherford, were announced Thursday.

One thing the new ownership group should do, Karmanos said, is help add approximately $5 million to $10 million a year in revenue. He said that would come through their involvement in the community to help increase season-ticket sales and from a boost in advertising revenue.

Karmanos hired a consultant who valued the Hurricanes franchise at $240 million. He said Thursday he had sold about $22 million in equity in the team, and said today he hoped to sell another $20 million or so in the next 12 months to other local investors, adding that the new partners should make that easier to get completed.

"Absolutely," he said. "You'll have some allies with you when you're trying to convince some other people.

"I really think it's important for a sports team to be owned by local people. When the day comes that I'm going to get out of the business, we'll have lots of people who have some direct experience who actually live here."

One of the partners is Capitol Broadcasting, which owns WRAL-TV, WRAZ-Tv and several area media outlets. Karmanos smiled when asked if the Canes, whose games are broadcast locally by Fox Sports Carolinas, might look to start their own regional sports network.

"I'm sure people at Fox Sports Carolinas has worried about a sports network," he said. "Right now we'd like to concentrate on hockey. Starting a sports network is really a hard thing to do. Successfully, it takes a lot of money. ...

"The people who pay us for our local TV rights are very aware of that. I think we're going to probably work a deal with them early because they don't like the fact that might be a possibility. As long as we can get a decent deal from Fox Sports, we're not going to worry about setting up a network."

Asked again if the influx of new revenue would enable the Canes to look to increase their payroll, Karmanos said, "We'd like to have the flexibility budget-wise to go to the top (of the salary cap), if we think we need to. But we're not going to just throw money at players to get to the top of the range."

Karmanos said he felt good about the potential of this year's team and gave unequivocal support for coach Paul Maurice and his staff in its handling of the team.

"Paul and his staff, I think, are as good a coaching organization as anybody in the league," he said. "So I'm very, very happy with them."

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