For the first time since the Islanders and Coyotes changed ownership in 2014, the NHL welcomes a new player to its exclusive group with the sale of the Hurricanes from longtime owner Peter Karmanos to Tom Dundon, a Texas billionaire and newcomer to the professional sports landscape.
The NHL announced Thursday the approval of the transaction, in which Dundon will buy a 61 percent stake in the Raleigh, N.C.-based franchise, valued around $500 million. Karmanos retains a 39 percent minority stake; Dundon has an option to purchase the remainder in three years.
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The deal was orginally announced in December at the NHL's Board of Governors meeting, signaling the end to the Hurricanes' long-rumored sale.
So, who is Dundon? And, most importantly, is the franchise in danger of relocating from its home of 20 years?
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While the Dallas-based businessman is likely anonymous to most hockey fans, you've probably heard about his most successful venture.
Dundon, 45, is the primary investor in Top Golf, the wildly popular franchise of tricked-out recreational driving ranges popping up around the country. The closest Top Golf to Raleigh recently opened across the state in Charlotte, but it's a safe bet one will arrive to the Triangle soon enough.
Dundon's exact net worth isn't public information, but his history of business dealings point to earnings well above $1 billion. Dubbed a “brilliant executive and investor" in a 2015 Dallas Morning News story, he made his fortune as CEO of Santander Consumer USA, a company which provides auto loans to buyers with poor credit. He stepped aside as Santander CEO in 2015, walking away (under scrutinous circumstances) with his 10 percent stake worth about $900 million, and started the Dallas investment firm DCP.
Dundon's most lucrative investment to date, without question, has been with Top Golf, a private company which carries an approximate valuation north of $2.7 billion.
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Will the Hurricanes relocate?
In terms of moving the Hurricanes franchise, Dundon told TSN Thursday "we like it where it is."
Take it as public posturing if you will, but Karmanos, who bought the Whalers in 1994 and moved the franchise from Hartford, Conn., to Raleigh in 1997, has maintained he would only sell his majority stake to a buyer who agreed to stay put. If it does happen one day, it won't be anytime soon. The agreement reportedly includes a standard clause which prevents Dundon from moving the team within seven years of purchase.
As part of buying majority stake in #Canes, Tom Dundon has agreed to not apply to relocate the franchise for a period of 7 years - a standard clause in #NHL purchase agreements. #TSN
— Frank Seravalli (@frank_seravalli) December 7, 2017
The Hurricanes turned a $3 million profit in 2017, according to Forbes, but a decade of financial hardship has made the franchise prime fodder for relocation rumors. Coincidentally, the team's sweetheart lease to play at PNC Arena runs until 2024. That's not necessarily a sign of things to come, but a lot can change in seven years and the building will be 25 years old by then.
"The real consideration was, am I going to buy a franchise that operates in Raleigh, not buy a franchise that I can perhaps move somewhere else?" Karmanos said, referring to Dundon's thinking during the negotiation process.
Bettman, rather empahtically, reiterated the team is to remain in Raleigh long term.
“I want to address one rumor about as crystal clear and as absolute terms as I can, Tom Dundon is buying his interest in the Hurricanes to have the Hurricanes in Carolina,” Bettman told reporters. “This is not a team that is being moved. The rumors that it might be moving somewhere else are absolutely incorrect, made up, fabrications, wrong, wrong, wrong.
"The club is not going anywhere with Mr. Dundon's purchase and for those of you who know geography, the fact that he lives in Dallas and that happens to be in the same state as Houston has nothing to do with anything. He's buying the club to have it in Carolina. I want to be crystal clear on this because it's really not fair to the players, the fans or anybody in the Triangle that this rumor has started. It's just not accurate.”
What happened to Chuck Greenberg?
In July, Karmanos had a handshake agreement in place to sell the team to Chuck Greenberg, another Texas businessman who was once a minority owner of MLB's Rangers. But Greenberg sought additional investors in order to meet Karmanos' asking price, reportedly between $400 million and $500 million, and was unable to raise the requisite funds. Dundon then emerged as a more attractive bidder.
According to Forbes' most recent NHL franchise valuations released earlier this week, the Hurricanes are worth $375 million, 27th in the league.
There's also an assumed debt that will factor into Dundon's purchase. Forbes estimated that debt to be around 70 percent of the franchise's value.
