NHL commissioner Gary Bettman, saying he hoped to “take down the temperature” on speculation surrounding the Carolina Hurricanes, said Wednesday the franchise was on sound financial ground with owner Peter Karmanos Jr. and called relocation rumors unfounded.
Speculation about the team’s future has intensified in recent months as the NHL nears a decision on expansion, and questions recently arose about the franchise’s financial standing after a $105 million lawsuit involving Karmanos and his three adult sons was filed in Michigan.
Las Vegas and Quebec City have made expansion bids, and the league is expected to make an announcement later this month. With Las Vegas considered the front-runner to land an expansion franchise, there has been increasing speculation in Quebec City that Quebecor, the ownership group backing the expansion bid, might seek to buy the Hurricanes from Karmanos and secure NHL approval for a relocation.
“I don’t see the Hurricanes relocating, period,” Bettman said in an interview. “I think the Triangle is a terrific market. A good fan base has developed around the Hurricanes and I see the opportunity for continued growth for this franchise in the future.
“Peter Karmanos is a terrific owner. This franchise has never missed a beat and he has been there to support it, financially and emotionally. All this speculation is unfair to the franchise and its fans. It’s completely unfounded.”
The lawsuit recently filed in Oakland County, Mich., alleges Karmanos Jr. defaulted on more than $100 million he borrowed from a trust established for his sons, who also alleged the trust was used to “support the Hurricanes.” The plaintiffs allege Karmanos Jr. borrowed money from the trust, has failed to meet repayment terms and owes them $105.7 million.
Bettman, in the interview, called the suit a family “squabble” gone public, and said the trust has not been used as financial collateral for the team.
“The trust has nothing to do with the league,” Bettman said. “It’s not signatory to anything, it hasn’t secured anything. It has nothing to do with us. There’s no connection between the trust and the league.”
Asked if there were any concerns about Karmanos’ financial well-being, Bettman said the NHL doesn’t check the financial wherewithal of the owners on a weekly or monthly basis. Of the Hurricanes, he said, “The fact is the club is meeting all its financial obligations.”
The commissioner would not say if the Hurricanes had received advances on TV revenue and revenue-sharing payment, but he said it was not unusual for teams to do that to help with cash flow.
Bettman disputed a recent media report the Hurricanes had borrowed more than $300 million from the league, calling the report ridiculous and absurd.
Karmanos joined the late Thomas Thewes in buying the Hartford Whalers franchise in 1994, moving the team to Raleigh in 1997. Karmanos and Thewes, a Compuware co-founder and Karmanos’ business partner in Detroit, each owned 50 percent of the franchise until Thewes’ death in September 2008.
Karmanos has secured investment partners, most with North Carolina ties, for the team the past five years. He hired Allen & Co., a New York investment firm, to sell his share of the team as part of what he called a “succession plan.”
Bettman said Wednesday he was not aware of a formal ongoing sales process for the Canes, indicating Karmanos was looking for a partner or partners to join him in owning the team. “If they’re the right people he wouldn’t hesitate to do that,” Bettman said.
The Hurricanes finished last in NHL home attendance this past season, with an average turnout of 12,203 at PNC Arena, a dip from 12,594 in 2014-15, when Carolina was 29th.
The low attendance also has fueled speculation the Hurricanes, who have reached the playoffs once since winning the 2006 Stanley Cup, have lost fan support in the Triangle and that other league owners might be willing support a change in ownership and a relocation.
Bettman praised the work of Canes general manager Ron Francis in building a team with good, young players, saying a strong second half to the past season was an indication of the team’s potential.
“I think the team is being built the right way,” Bettman said. “Attendance tends to lag, but again, I think the Triangle is a terrific market.”
In ending the interview, Bettman said, “I hope this conversation will take down the temperature that’s been elevated, because the temperature is way hotter than it should be.”