Jun 2, 2010, 3:01 PM EDT
With Hurricanes owner Peter Karmanos on the verge of selling part of the team to a group of minority investors, the talk in Carolina has stepped up a little bit on what the effects of doing so will be on the outlook of the team on the ice as compared to how they look in the bookkeeping office. The Raleigh News & Observer’s Luke DeCock was able to find out just what that could turn out to be.
The sales prospectus prepared by Allen & Co., investment bank Karmanos hired, touts a reduction in expenses in excess of $10 million and possibly as much as $15 million as a step toward consistent profitability. In a meeting with News & Observer editors and reporters, Karmanos confirmed that kind of savings could only come through cutting player salaries by a quarter.
Slashing a quarter of the payroll of a team that had $54 million committed to salary last year is taking an awfully big bite out of what was a bad but injury-laden Hurricanes team last season. Looking at what Carolina has committed to salary for next season, the Hurricanes have almost $42 million already set for 15 players and that’s not counting youngster Zach Boychuk who’s set to earn nearly $1.2 million should he stay with the big club. A lot of that money goes away after next year so Karmanos will get his reduced payroll one way or another, but what about being successful when going low budget? There’s the rub.
The 30 teams that have spent the least since the lockout — the six teams at the bottom 20 percent of the league’s payroll rankings in each of the past five seasons — have made the playoffs nine times. Considering that 16 of the league’s 30 teams make the playoffs each season, those are stiff odds.
Obviously it pays off well to pay up, but it’s always better to pay up wisely – something which the Nashville Predators know a lot about and the New York Rangers do not.
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