Tuesday February 17, 2004
In today's edition of the Raleigh-based News and Observer, there is an article where Carolina Hurricanes owner Peter Karmanos talks about what it will take in a new CBA to keep the Canes viable in Raleigh, even with a salary cap.
Carolina Hurricanes owner Peter Karmanos has explicitly placed the future of the franchise in the Triangle in the hands of a new economic agreement between NHL owners and players. Based on the league's own numbers, a salary cap may not help the Canes all that much.
In fact, when Karmanos says "our team really needs a new system to be viable," he appears to mean the Canes need more than $10 million per season in revenue sharing as part of any new collective bargaining agreement.
Carolina's chief financial officer, Mike Amendola, said the Canes were one of the 19 teams that lost money last season and that the Canes lost "slightly" more than the average loss of $18 million.
Levitt determined that player costs accounted for 74.8 percent of revenues. According to his figures, the break-even figure for player costs would be 61 percent of revenue.
Based on what the Canes are saying, the fine print is this: For this franchise to turn a profit, the other 29 NHL teams have to be willing to send millions in Carolina's direction.
Asked about the gap between even an optimistic salary cap and the Canes' losses, Carolina president and general manager Jim Rutherford acknowledged the team will need a "creative" CBA to make up at least $10 million.
"How [do] you make that up?" he said. "You can generate more revenue somehow. I think there's room for us in this market to generate more revenue, but there would have to be other ways. You can't make it up yourself."
In other words, the rest of the league would have to make it up for the Canes. And the rest of the league would have to ask itself whether having a franchise in the Triangle is worth as much to the league's general financial health as the millions it would cost to help it break even or turn a profit
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