Carolina Hurricanes’ Conspiracy Theories following Sebastian Aho offer sheet
The Montreal Canadiens attempted to offer sheet Sebastian Aho from the Carolina Hurricanes on a five year deal. But it was easily matched. What is really going on?
Let me begin by stating that I don’t believe in conspiracy theories. Lee Harvey Oswald acted alone. Bigfoot doesn’t exist. Neil Armstrong stepped on the moon. The NFL does not favor the New England Patriots. Nothing crashed in Roswell, N.M. The Carolina Hurricanes didn’t force the Storm Surge on the players.
I believe in fact over fiction. Grainy photos and whispered stories don’t mean anything. Neither do cryptic tweets from supposed “in-the-know” insiders. I need to see evidence.
Which brings us to the latest conspiracy theory floating around the Carolina Hurricanes: Tom Dundon is looking to turn the team over for a quick profit. How else do you explain the Sebastian Aho situation?
Nothing to see here
As with any story, there are at least two sides. Let’s look at the reasons this is likely hogwash (no offense Hamilton the pig).
Dundon is a successful businessman who supposedly is worth more than a billion dollars. He likes to buy things. He owns a golf course, a 55 percent stake in Top Golf, a 33-story building in downtown Dallas and, oh yes, the Carolina Hurricanes.
He threw away $70 million on the Alliance of American Football this year through a hastily arranged deal. He has since claimed he was misled to the extent of the AAF’s financial issues and has filed a lawsuit seeking his money back.
It would be easy to characterize him as rash, impetuous or foolish after that debacle, but that appears to be an outlier.
Despite the fact he is involved in a lot of different ventures (his firm, Dundon Capital Partners, owns stakes in Carvana and Employer Director, a healthcare services company), he doesn’t appear to be the kind of person who flips his investments for a quick profit. He still owns his share of Top Golf and the building in downtown Dallas as well as the golf club.
His track record would indicate he intends to own the team for a long time.
Reasons have been worried
When Dundon purchased the team, some insiders were concerned he wanted to relocate the franchise to Texas. Houston NFL star J.J. Watt has been an active advocate for bringing an NHL team to the city, and Dundon is friends with former Dallas quarterback Tony Romo (if the guy knows one NFL player in Texas, he must know them all, right?). The success of the 2019 season and public comments from Commissioner Gary Bettman make a move unlikely, however.
If Dundon intended to move the team, and that plan now seems remote at best, has he become bored with the franchise and decided to dump it? After all, he lives in Texas and only makes occasional trips to Raleigh. He has no known ties to the area.
Dundon paid $420 million in January 2018 for a majority share and operating rights to PNC Arena. He appears to have bought in at the ideal time. Hockey revenues are surging across the league. The television rights deal with NBC that nets the league about $200 million a year could be worth double when it expires after the 2021 season. Postseason ratings were up again this year.
Forbes Magazine released its annual ranking of each NHL’s team value in December, and Carolina clocked in with a value of $420 million. According to the magazine, the team’s value had grown by $50 million from the previous year, an increase of 14 percent when the league average was six percent.
Keep in mind this valuation is for the 2017-18 season, a year in which the Canes missed the playoffs for the ninth straight year. Considering what happened this past season, another significant increase in value should be in the offing when Forbes releases its 2019 survey in December.
A similar 14 percent increase would see the team’s net worth increase to close to $480 million. Given the surge in attendance (up more than 1,000 per game), merchandise sales and the deep run in the playoffs that brought an additional seven sold out home games to PNC Arena, the increase could be high enough to push the franchise value north of half a billion dollars.
If the value of the team has increased by $110 million in two years, and Dundon would realize more than half of the increase if he sold the team, he might be tempted to take the money and run back to Texas.
Business for next year is booming. The team sold more than $5 million in new season tickets for 2019-20 before the end of May. The Bunch of Jerks brand is still popular. Surely this would make the team attractive to potential buyers.
This brings us to the Aho contract situation. If Dundon intends to sell the team, reducing operational costs would increase his profit from the sale. Shedding the $21 million that will be owed to Aho within the next 12 months thanks to Montreal’s front-loaded, bonus-laden offer sheet would be one way to do that.
The $8.45 million average annual value of the contract is less than what most hockey observers felt Aho would command from Carolina and actually helps the team’s salary cap situation for the next five years.
Conspiracy theorists would note that the Canadiens must have some reason to believe Carolina is vulnerable to this kind of offer. Either the Canes don’t have the cash on hand to match the offer (highly unlikely given Dundon’s net worth and how much Carolina made in its playoff run) or Dundon won’t want to pay that much because he’s looking to sell.
Related Story. Hurricanes Match OfferSheet on Aho. light
This rumor was put to rest once the team matched the offer for Aho, but had for some reason Aho was allowed to leave, expect more eyebrows to be raised around Raleigh. For now the Conspiracy theorists have been proven wrong.