Peter Karmanos Jr., unhappy in Connecticut, was looking for a new city for his NHL franchise.
Steve Stroud, then chairman of the Centennial Authority, was looking for another tenant to share a new arena in Raleigh due to open in 1999.
It was an unlikely duo: the pony-tailed Karmanos, a software company owner from Detroit, and Stroud, a native North Carolinian whose drawl was thick and his business acumen keen.
But together, the two helped orchestrate and bring major-league hockey to the Triangle and the state in 1997. The Carolina Hurricanes, whose home is PNC Arena, have given North Carolina its only major-league championship – the 2006 Stanley Cup – while becoming an indelible part of the state’s sports landscape.
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“The Carolina Hurricanes are a part of our area fabric,” Stroud said. “They’ve become a part of the sports passion here. Mr. Karmanos has done right by this community.”
As Karmanos steps aside as the Hurricanes’ majority owner, turning over the franchise leadership to Dallas billionaire Tom Dundon, much good has been done, and not just the winning of the 2006 Cup.
PNC Arena initially was to be the home of N.C. State men’s basketball. But Stroud and others on the Centennial Authority, an appointed body and the arena landlord, realized sharing the building with an NHL team would be advantageous.
And especially if the team owner would help pay for it.
“We first were supposed to spend $12 million to $15 million to upgrade it to NHL standards,” Karmanos said. “It turned out to be $40 million that I put in.”
The total cost of the arena was $158 million.
“Without Peter we couldn’t have done it,” Stroud said.
Before the coming of the Canes, Raleigh was bidding for an NHL expansion franchise. The ownership group, headed by Charlotte business executive Felix Sabates, made an impressive presentation to the NHL executive committee in New York in January 1997, and Raleigh appeared among the favorites – along with Atlanta and Nashville – to land a franchise.
But the constant haggling over the building of the arena – its size, its cost, who would pay what, a lease – finally caused the Sabates group to pull its bid. The push to get an NHL team seemed over.
But NHL commissioner Gary Bettman liked the potential of the Triangle and Raleigh market. Karmanos, while not on the executive committee at the time, sat in on the expansion presentations and liked what he heard about Raleigh and the Triangle.
Karmanos, the co-founder and CEO of Compuware, had joined business partner Thomas Thewes in buying the Hartford Whalers in 1994. By ’97, he was looking to move the team.
“They were going to build a beautiful building in Raleigh, in a dynamic area with really good jobs where within a 25-mile radius was one of the highest per-capita incomes in the league,” Karmanos said. “It was a wonderful market.”
Stroud and the authority quickly found common ground with Karmanos and the franchise’s management group headed by Jim Rutherford. A lease deemed fair by both sides was approved. On May 6, 1997, Karmanos made it official: the Whalers were being rebranded the Carolina Hurricanes and coming to Raleigh.
For two years, while the arena was being completed, the Hurricanes played in Greensboro, usually before sparse crowds. Karmanos lost millions of dollars those two years which he said helped offset his “huge” personal tax bills at the time.
“But I wouldn’t characterize it as losing anything,” Karmanos said. “It’s an investment in the team and the market.”
I think we’ve been good business for Raleigh, Wake County, the Triangle and the state. On the ice we had so much success early that we may have spoiled some people. Few in the league had the success we did.
The arena, then called the Entertainment and Sports Arena, was opened Oct. 29, 1999. It has hosted Stanley Cup finals in 2002 and 2006, the 2011 NHL All-Star Game and the 2004 NHL Draft. The 2006 Stanley Cup banner hangs in the rafters along with N.C. State’s 1974 and 1983 NCAA championship banners.
Gale Force Sports & Entertainment, the Hurricanes’ umbrella company, has managed the operations of the arena.
“I think we’ve been good business for Raleigh, Wake County, the Triangle and the state,” Karmanos said. “On the ice we had so much success early that we may have spoiled some people. Few in the league had the success we did. “
The Canes have not reached the playoffs since 2009, when they were eliminated by the Pittsburgh Penguins in the Eastern Conference final, and that has been reflected, in part, in lagging home attendance in recent years.
“That’s not a knock on the market,” Karmanos said. “We haven’t made the playoffs and you need to win to earn those tickets back.”
Stroud remains a Centennial Authority member although no longer is the chairman. The authority now will be dealing with a new owner, perhaps new arena management.
“But Peter left us in very good shape,” Stroud said. “The organization is in great shape.”