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Hurricanes Announce Four New Investment Partners

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02-28-2013, 09:39 AM
  #1
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Hurricanes Announce Four New Investment Partners

http://hurricanes.nhl.com/club/news.htm?id=657825

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RALEIGH, NC – Peter Karmanos Jr., Chief Executive Officer, Owner and Governor of the National Hockey League’s Carolina Hurricanes, today announced that four new partners have joined in the ownership of the team. Epic Games Vice President and Co-Founder Mark Rein and his wife Tara, and PITT OHIO President and Owner Chuck Hammel join Hurricanes Holdings, along with two other investors who have chosen to keep their partnerships private.

“The continuing growth of our ownership group strengthens the Carolina Hurricanes’ position on the Triangle landscape and will help the team be competitive on the ice,” said Karmanos. “I am pleased to welcome Mark and Tara Rein, Chuck Hammel and the others to the Hurricanes family.”
For those keeping score at home, Karmanos has added 19 investors (almost all local) over the last 15 months or so.

Announced 11/3/2011:
*Michael Kahn, Empire Distributors Inc. (also owner of Charlotte Checkers)
*Matthew Szulik, Red Hat
*Capitol Broadcasting Company
*Temple Sloan Jr., General Parts International, Trail Creek Investments, Highwoods Properties
*Clancy & Theys Construction
*Jim Rutherford
*Abel and Barbara Zalcberg, OFM, Inc.
*Frederick J. Whitney and Timothy M. Whitney, Whitney Wealth Management
Unidentified Investor
Unidentified Investor

Announced 9/12/12:
*Ron Francis
*Eliza Kraft Olander and Brian McHenry
*Ron de Lange, Tekelec
Unidentified Investor
Unidentified Investor

Announced 2/28/2013:
*Mark Rein, Epic Games
Chuck Hammel, Pitt Ohio
Unidentified Investor
Unidentified Investor


*Based in North Carolina

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02-28-2013, 09:51 AM
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02-28-2013, 09:58 AM
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The "all local" part is great. If people have a vested interest in the team, they'll tap into their own business and social networks to help out. Given the demographic of NHL fans in general, RTP should be a great fit.


Anyone know what percentage Karmanos still owns?

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02-28-2013, 10:00 AM
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Good for Karmanos and the Canes.

Epic Games... as in Gears of War Epic Games?

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02-28-2013, 10:03 AM
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Originally Posted by Major4Boarding View Post
p:

Epic Games... as in Gears of War Epic Games?
Yes.....

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02-28-2013, 10:03 AM
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Quote:
Epic Games... as in Gears of War Epic Games?
Yep!

Quote:
Anyone know what percentage Karmanos still owns?
They have not been disclosing this, but when he originally announced his intention to do this a couple years ago, he suggested investors would each put $1 to $3 million and that he would retain around 70% ownership.

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02-28-2013, 10:04 AM
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Quote:
Originally Posted by Fugu View Post
Anyone know what percentage Karmanos still owns?
His master plan was to sell the 49% that previously belonged to his Compuware partner, Thomas Thewes, before Thewes' death a few years ago.

How much of that 49% has been sold is anyone's guess. I'd imagine he won't keep a public tally, but will announce when the final goal is reached... just a guess.

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02-28-2013, 10:05 AM
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Quote:
Originally Posted by Fugu View Post
The "all local" part is great. If people have a vested interest in the team, they'll tap into their own business and social networks to help out. Given the demographic of NHL fans in general, RTP should be a great fit.


Anyone know what percentage Karmanos still owns?
They haven't released that as far as I can tell. He was trying to sell the share that his minority partner owned (and Karmanos bought when he passed away), which I believe was 49%.

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02-28-2013, 10:05 AM
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Quote:
Originally Posted by Gotta Catch Em Staal View Post
and that he would retain around 70% ownership.
Maybe I'm wrong about the 49% then.

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02-28-2013, 10:08 AM
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I think we are both right. His expectation after adding the initial investors would be that he retains 70% ownership, but it sounds like his ultimate plan is to continue until he gets to 51%. This is the article I was reading: http://www.sportsbusinessdaily.com/D...urricanes.aspx

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02-28-2013, 10:08 AM
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Originally Posted by Major4Boarding View Post

Epic Games... as in Gears of War Epic Games?
Main studio is in the Raleigh area.

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02-28-2013, 10:09 AM
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Ok, I see where things got confused.

Karmanos plans to ultimately sell 49% of the team.
http://blogs.newsobserver.com/canes/...ring-investors

In the previous round of investment, he sold 30%.
http://blogs.newsobserver.com/canes/...ocal-investors


I would think the sale of the 49% is almost complete at this point.


edit: damnit, this is like two people texting at the same time

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02-28-2013, 11:42 AM
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Quote:
Originally Posted by Boom Boom Anton View Post
They haven't released that as far as I can tell. He was trying to sell the share that his minority partner owned (and Karmanos bought when he passed away), which I believe was 49%.
Quote:
Originally Posted by Gotta Catch Em Staal View Post
I think we are both right. His expectation after adding the initial investors would be that he retains 70% ownership, but it sounds like his ultimate plan is to continue until he gets to 51%. This is the article I was reading: http://www.sportsbusinessdaily.com/D...urricanes.aspx
Quote:
Originally Posted by tarheelhockey View Post
Ok, I see where things got confused.

Karmanos plans to ultimately sell 49% of the team.
http://blogs.newsobserver.com/canes/...ring-investors

In the previous round of investment, he sold 30%.
http://blogs.newsobserver.com/canes/...ocal-investors


I would think the sale of the 49% is almost complete at this point.


edit: damnit, this is like two people texting at the same time

Thank you.

In your individual opinions, how do you think the team is doing financially? I know tarheel and I had a long discussion about the cap system and trying to grow out of the bottom 15 about a year or two ago. If I recall, Rutherford had commented about the costs of things like contract insurance and the lifetime contracts impacts on the cost of doing business for smaller market teams.

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02-28-2013, 12:47 PM
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Quote:
Originally Posted by Fugu View Post
In your individual opinions, how do you think the team is doing financially?
They're definitely spending more money than they used to, which is a good sign. I doubt that they are, or will ever be, much higher than about 15th-20th in the league in terms of financial resources. That's just the reality of being a small, southern team. The key for this organization is that they stay within the middle-third and don't backslide. Even though the new CBA isn't a magic bullet, it has made it possible for the ~20th team to make a modest profit.

To frame what's happening in the broader sense: the franchise had some rough years when the team wasn't just struggling, but was falling way short of inflated expectations. The payroll was high and the bandwagon effect was very brief, which ultimately led to a budget shortfall. At the same time, Thewes passed away and Karmanos ended up owning more of the team than he had bargained for. That was when they really went into "budget team" mode in a kind of painful way. They've rebuilt the right way, identifying cornerstone players (the Staals, Skinner) who are capable of being the face of the team, and locking them up for the long term. The new ownership group isn't just a cash infusion, but also it was pointed out on the Canes board that they will spread out the pain of any revenue shortfalls, making it less of a desperate situation for everyone involved. And in the event that Karmanos decides to liquidate his 51%, he will be selling a relatively stable asset which is strongly backed by community investors.

I don't want to go so far as to say it's all roses, but the organization is trending in the right direction and I think the anxiety around their finances has pretty much dissipated.

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03-01-2013, 08:30 AM
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Originally Posted by Major4Boarding View Post
Good for Karmanos and the Canes.

Epic Games... as in Gears of War Epic Games?
this is another step towards the previously announce Karmanos' retirement that is getting rolled out in bip and blobs. He stepped down last year as CEO of the company and is now Executive Chairman. I know a few years ago, when it was first announced that he would be changing his position that some financial experts made observations on K's loyalty to hockey as opposed to those who were coming in to replace him

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03-01-2013, 09:09 AM
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Quote:
Originally Posted by jumptheshark View Post
this is another step towards the previously announce Karmanos' retirement that is getting rolled out in bip and blobs. He stepped down last year as CEO of the company and is now Executive Chairman. I know a few years ago, when it was first announced that he would be changing his position that some financial experts made observations on K's loyalty to hockey as opposed to those who were coming in to replace him
I'm not sure I understand what you mean here. Karmanos, not Compuware, is the owner of the Hurricanes franchise. His replacement as CEO of Compuware won't affect the team at all, except perhaps indirectly in terms of how he handles his time and money going forward.

Or by "those who were coming in to replace him", do you mean the new ownership group? I wouldn't think they would buy minority shares of an NHL team if they weren't "loyal to hockey", which I assume is a euphemism for keeping the team in town?

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03-02-2013, 05:20 PM
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Quote:
Originally Posted by Fugu View Post
Thank you.

In your individual opinions, how do you think the team is doing financially? I know tarheel and I had a long discussion about the cap system and trying to grow out of the bottom 15 about a year or two ago. If I recall, Rutherford had commented about the costs of things like contract insurance and the lifetime contracts impacts on the cost of doing business for smaller market teams.
They've hit the "break even" point a few times since the 05-06 cup season (first time they turned a profit), turning a profit once more in 08-09 with a run to the conference finals. Typically, aside from the disaster that was the 09-10 season where they were a big spender and missed by a mile, PK and JR have had the team at the point where they should be close to break even with average attendance each season and will add salary if they are making a serious playoff push. They took heavy losses in 09-10, but every other year they've been hovering at or reaching "break even". Whether or not they actually are breaking even those seasons is another matter though, but the Canes are usually fairly candid with the Triangle Business Journal.

I don't think they'll get out of that 15-20 range of teams any time soon, but if that 15-20 range becomes more financially competitive with a 50/50 share then I don't think the Canes will be running into the issues they were under the post-95 lockout CBA.

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03-05-2013, 01:57 PM
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Karmanos has been busy this month, as he prepares for life after Compuware.

Quote:
Peter Karmanos, owner of the Carolina Hurricanes, may have much more on his mind than hockey this month as he nears the end of his tenure as executive chairman of the board at Compuware. He may be involved in selling the company.

Quote:
Bloomberg news is reporting Tuesday that Compuware (Nasdaq: CPWR) has attracted buyout interest from private-equity funds including Apax Partners LLP and Hellman & Friedman LLC, according to people familiar with the situation.
Quote:
Compuware recently detailed retirement plans for Karmanos in a rfiling with the Securities and Exchange Commission. The 69-year-old is expected to become a consultant for Compuware, earning $600,000 a year. The move to leave the company's board is effective March 31.
http://wraltechwire.com/compuware-re...ffer/12182652/

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