Hurricanes exec says sweetheart lease must be sweetened more to make team “sustainable”

Remember last year around this time, when a new rich guy bought the Carolina Hurricanes and didn’t immediately demand a new or renovated arena and I was all “he has a sweetheart lease through 2024 so maybe he won’t complain for a few more years”? Well, forget all that:

“If you look around the league, for public buildings, we’re at the bottom of the league,” Hurricanes president Don Waddell said. “It’s nothing that anyone did wrong. Those were the times back in the ‘90s. But if we’re going to be a sustainable franchise in this marketplace for a long time, the lease plays an important role. The economics of the deal have to change in our favor.”

Well, that’s a tidy bundle of threat bombs! Without changing the “economics” of the lease — read: giving Hurricanes ownership more and the public Centennial Authority less — the franchise won’t be “sustainable” for “a long time.” (I will skip including here my usual link to the Army Protection Racket sketch. Oh, paralipsis!)

The irony is that, as mentioned above, Hurricanes owner Tom Dundon has an exceptionally team-friendly lease now, where he gets all the revenues from the arena while paying nothing in operating or capital upgrade costs, just a $3 million a year rent that he can deduct a bunch of expenses from before paying. (He’s still probably losing money on the team, but them’s the breaks when you own a hockey team in a small city in basketball country.) But leases can always get sweeter — hell, the Arizona Coyotes used to get paid to play in their arena! — and you can’t get if you don’t ask, right?

There’s also the issue of upgrades to the Hurricanes’ arena, which “is in need of massive renovations that could exceed $150 million,” according to the News & Observer, citing no sources at all. The paper goes on to report: “While the building’s behind-the-scenes infrastructure has been maintained at a high level by the arena authority, public-facing areas from the arena bowl to the entrances have an understandably dated look compared to state-of-the-art arenas elsewhere.” So it really just needs a more modern paint job? A $150 million paint job? I’d think Dundon would do better asking for $150 million to subsidize his annual operating losses, but I guess if you can ask for both, all the better!


17 comments on “Hurricanes exec says sweetheart lease must be sweetened more to make team “sustainable”

  1. Why is it always up to the public taxpayers to make a private, professional sports enterprise “sustainable” (i.e. profitable)?

    Having said that, “Hello Quebec City!”

        • Quebecor owns operating rights to the arena, and has made very clear that nobody is going to get to operate an NHL team there except them.

  2. Dundon is correct about the arena being outdated, though I am always amused that a “modern look” means fewer seats.

    On the move threat, I’m not sure that Dundon has the leverage he thinks he has. Houston and Quebec City appear to only be options for local owners.

      • It wasn’t built in the last 15 years for one. So Ipso facto it is outdated. Kind of like the BB&T Building or Wells Fargo Capitol Center.

        I mean those are basically unusable right. So old!

      • Having been to the Raleigh arena a bunch of times…yeah, it looks like it was built in 1999, but I don’t know if just because it’s 20 years old automatically means it’s “outdated.” From a guest perspective, the place is still perfectly fine and user-friendly, and there’s nothing about it in its current state that detracts from the game-day experience. In no way is it in need of “massive renovations.”

        The team store is cramped and the signage, which dates from Day 1, could probably be spruced up, but that doesn’t cost $150 million to fix.

        I actually think it’s a better-designed arena and a more enjoyable place to experience a game than the new place in Quebec City.
        The Videotron Centre architects spent little time thinking about the guest experience beyond when the spectator is actually in their seat (the concourses/common areas are sort of unpleasant to be in, frankly), and the design hinders the team/tenant from generating as much revenue as they should, IMO.

        • So it’s a good thing that the new arena in QC has so few paying spectators then.

          I’ve found something similar with other arenas (never been to VC or the Canes arena, whatever it’s called these days)… sometimes the older ones that were purpose built for the average paying fan as opposed to the club seat lease holder provides a better experience for the public.

          Certainly there is a limit.. most really old facilities have too few bathrooms and they are far too difficult to get to (you’ll miss at least half a quarter or period if you go outside of halftime/intermission)… but that has little to do with “modernity” (IE: modern fire or access/egress regs). It has mainly to do with what today’s fans are required to do at sporting events: Spend tons of money on concessions.

          Believe it or not there was a time when most fans going to a ballpark or arena would eat at home before they left. They may or may not have left their seats to buy a soft drink or a coffee. They definitely didn’t drop twice their ticket price on food, booze and team merch.

          • Also, they used to bring the food to you. When I was growing up, my family would buy a ton of food at Mets games, but almost always from vendors who would come through the seats.

          • I remember those too! (not at Mets games, obviously…)

            If I understand it correctly, today you must be a club seat lessee to get the private ‘guest experience co-ordinating associate’ signal button on your Recaro outdoor seat, which you can use to order sushi or avocado toast delivery.

            The in stadium concessions folk used to be the ‘summer’ jobs for late grade high schoolers and university students on their summer breaks… lugging trays of beer and food up and down the stadium stairs. Nowadays the teams would like to ‘concentrate’ your spending elsewhere.

            I still see the occasional one wandering through the stands at some events, but nowhere near as many as there used to be.

            One of the reasons I tend to go to more minor league sporting events is that the atmosphere is more familiar to me… you still have vendors with (full) trays of items in the stands.

            I don’t necessarily feel I’ve gained anything if I pay $600 to sit in a private lounge under the lower bowl seating area and get to watch the players wander through a glass hallway “right in front” of me. I paid to see them play, not to schlep their way from the dressing room out onto the playing area… And for $600, I can see a full season of some sports…

    • At the moment Dundon owns 61% f the team with Karmonos retaining the remaining 39%. Dundon may opt to by the rest in 2 years at whatever the franchise value is at that time and make a carte blanche decision that affects the future of the franchise. It’s interesting that Karmonos has repeatedly cited the existing favorable lease as a reason why the team wouldn’t move, but apparently he didn’t ask the opinion of the new owner as he took the helm.

      Houston is probably the most likely landing spot for the Hurricanes considering Dundon is a Texas native. It’s obviously a huge market though he’d likely have to share the arena with the NBA Rockets. Now that Seattle has been awarded an expansion franchise, look for the them to move to Houston if Arizona or Florida doesn’t hop there first.

      League revenue sharing has helped this team survive in Raleigh for this long, something Hartford was not privy to since it was implemented after the 2004-2005 lockout, but the NHL still lacks a lucrative league wide television deal to generate stability.

      The Hurricanes have had a decent season on the ice so far, and will probably be supported well in playoff games if they make it, but I’d be wary of such dialogue if I were a fan – precedent speaks volumes…

  3. The Hurricanes have never had much of an identity. They’re one of only 4 NHL teams drawing under 14,000 fans per game. And they play in gear that crazily looks like knockoffs of what the Ottawa Senators wear. (Exact same colors and their logo looks like an “O” from basically any distance away while Ottawa even has third jerseys with an “O.” You could set out to pay homage and not end up with uniforms as close as what the Hurricanes and Senators have. And it’s made even worse given they’re the continuation of the Hartford Whalers who had one of the best logos in sports history.)

  4. Speaking on behalf of more than a few people who actually live in Raleigh, I say “let them go…”

    Maybe, just maybe, the lack of an NHL franchise helps us land the Major League Baseball team the area really wants.

    • Ok this made me laugh! Do you really think Major League Baseball would go to Raleigh?
      We can’t overlook the fact that the commissioner has stated that they won’t expand until Tampa and Oakland get new stadiums. When the commissioner does speak about expansion he’s never mentioned Raleigh, he actually brings up Charlotte(along with some bigger cities.)