Hurricanes, though down on their luck, are entrenched at Raleigh’s PNC Arena

By Clifton Barnes
With the PNC Arena needing renovations, and the NHL talking about expansion and the owner of the Carolina Hurricanes talking about adding partners, the predictable rumors of the Hurricanes leaving Raleigh have been swirling.

“One thing I can guarantee is that this franchise isn’t going anywhere,” said Don Waddell, the president of Gale Force Sports and Entertainment, which oversees the business side of the Hurricanes and the PNC Arena. “We have a great set up here.”

What hasn’t been so great is the Hurricanes’ product on the ice, further fueling the speculation. The Canes have only been to the playoffs once since their unlikely trek to the 2006 Stanley Cup title… and that was seven years ago in 2009.

“There’s zero buzz about the Hurricanes in the community,” said Dave Droschak, who is the Marketing and PR Director of Backyard Bistro, the only sit-down restaurant within walking distance of the PNC Arena. “When you miss the playoffs for that long, the interest wanes.”

For its part, Backyard Bistro cut back its sponsorship level from hosting 10 Canes Corner radio interview programs to just four. They did that because the team hasn’t been winning and, until recently, had the same players that fans had already met there before.

“We are happy with the decision we made because this year we were packed for all four shows,” said Droschak, who added that they are still very busy on hockey game nights despite the losing.

“When attendance dips, it hurts us a little bit,” he said, “but we only seat 270 people so it would have to really dip to affect us much.”

Except for a Wendy’s restaurant in a nearby convenience mart, Backyard Bistro is the only place within walking distance to go before or after a game for food, drink and entertainment, which consists mostly of big-screen TVs.

When the location for the arena was decided on 20 years ago, it was believed that restaurants, bars and entertainment businesses would open but instead business complexes have been built on adjacent properties.

While some areas, like Charlotte, have built arenas in vibrant downtowns, it was determined in the 1990s that Raleigh’s downtown didn’t have the infrastructure.

“There are benefits to having an arena downtown,” said Scott Dupree, executive director of the Greater Raleigh Sports Alliance, a sports tourism organization for the city. “Namely, you have access to hotels, bars, restaurants, retail and nightlife. But there are benefits to having it where it is too including convenient access to the highway and parking.”

The first two rounds of the East and Midwest Regionals of the NCAA Tournament were held recently at the PNC Arena. It’s the second time in three years and the fourth time in 13 years that the PNC Arena has hosted NCAA Tournament games.

“We’ve never gotten one complaint about hosting NCAA basketball,” said Dupree, who estimates that the economic impact of the tournament to the area to be $4-5 million. “The NCAA committee and staff, the teams, everybody loves the building. The folks from the NCAA couldn’t stop talking about it.”

The location just off the highway and near the airport, along with the ease of getting in and out was also praised.

Waddell said those facts along with the inability of downtown Raleigh to handle all the traffic and parking make renovating the current facility more attractive than being downtown. “While we’re based in Raleigh, we are a Triangle team,” he said. “A lot of people come from Durham and Chapel Hill and other places. This is a central location and a very easy building to get in and out of from whatever direction.”

NHL officials have told Waddell that the Hurricane’s arena has the easiest in-and-out traffic of any building in either the NHL or the NBA.

Dupree said it’s the general consensus of city and community leaders that it doesn’t make sense to try to identify the land and the dollars to build another arena downtown when there is a perfectly good one a few miles away.

“The fact is that the PNC Arena feels new and is still too nice and too good to bring it to an end and put a building downtown,” he said. “And the Hurricanes are going to be there for a long time.”

The Hurricanes have a lease through 2024 with the Centennial Authority, which owns the PNC Arena building. Gale Force Sports and Entertainment, which owns the Hurricanes, also operates the arena. “Operating the arena is part of our company and a profitable part of our business,” Waddell said.

In late 2014, Peter Karmanos, the team’s chief executive officer and principal owner, announced he was looking to take offers for his majority interest in the Hurricanes.

“The owner is 72 years old and he’s naturally looking for a succession plan,” Waddell said. “While looking for partners, people took that as the team would be leaving. That was never said. It’s just not realistic. The amount of money invested in the building and this marketplace is tremendous.”

Karmanos put more than $40 million of his own money in the arena when it was being built. And now the team will be helping pay for the upcoming renovation and expansion costs.

The Centennial Authority should know by July how much it will cost to update the PNC Arena but one early estimate has the figure at around $80 million.

Ratio and HOK architects, who met with arena employees from the suits to the chef in February, are looking into various scenarios for improving the facility.

“We’ll look at how much to bite off at that time,” said Jeff Merritt, the Centennial Authority’s executive director.

But one thing seems certain – there will be a rooftop bar and lounge.

“Since there aren’t many restaurants and entertainment facilities in the immediate area, a roof top bar and lounge will help expand the customer experience,” Waddell said.

Another enhancement concert goers especially are likely to see is space for a VIP Experience, which is a national trend where music fans pay more for extra perks. Right now if a band or performer had a VIP Experience, where, for instance, fans would get a chance to meet the celebrities, the PNC would have to close the Arena Club Restaurant and use that space for the event.

Nonetheless, Merritt said it has been a good year for concerts at the PNC Arena. “The touring world is very cyclical,” he said. “But we’ve had a pretty steady concert business lately.”

While getting concert acts is competitive, Merritt said that Gale Force Sports Entertainment does a good job keeping tour managers and artists happy.

“What we hear is largely positive,” he said. “It’s a relationship business and Gale Force has a lot of the same people they had 16 years ago, some in the same roles.”

About the time the Centennial Authority gets the cost estimates for the renovations, they’ll start work on a long-range master plan that will look into the future needs of running the building through the year 2039. They’ll likely hire a firm in the fall that will look at everything from anticipated technological advances for scoreboards to light bulbs – and how much it will all cost throughout the years.

Meanwhile, Waddell is putting money into hiring people to help them make money to help pay for those costs.

“We were understaffed when I got here,” said Waddell, who has been president of the Hurricanes since July 2014. “We’ve added 45 positions and 41 of them are in revenue-producing areas.”

He said the business had been run very frugally. “You’ve got to invest in the business to grow the business,” Waddell said.

They are more aggressive going after sponsors – adding Martin Marietta for the first time, for instance – and selling season tickets and business suites.

The number of season ticket holders has dropped each year over the last seven or eight years going from 10,000 to 7,000. This year it appears to have leveled off and is starting to move up a little.

Recently the Hurricanes started their season ticket renewal campaign and they are significantly ahead of last year’s numbers. “We had 40 percent of season ticket holders renew in first week of the renewal campaign this year while at the same time last year we only had 18 percent renew,” Waddell said.

Selling more of the business suites has been a challenge over the last decade. “When you’re laying off hundreds or thousands of people it’s hard to justify keeping a suite to entertain people,” Waddell said. But he notes that it’s better than it was even a year or two ago. He now has four people in the suite department as opposed to just one when he arrived.

One area that is going very well is sponsorship of dasher boards around the ice. Those are completely sold out. Part of the reason could be that TV ratings are up around the NHL and for Hurricanes broadcasts. While he wouldn’t give specific numbers, Waddell said that Hurricanes TV ratings this season are double what they were last season.

“We have a lot of big national pharmaceutical and technology companies based here and they like to see their name in the arena associated with the team,” Waddell said. “When the New York Rangers or Boston Bruins, for instance, come in here to play, those games are broadcast back to their local markets so those national companies are getting exposure in 29 other markets.”

But are those TV viewers seeing anyone in the stands at Hurricanes games? “We were in last place on Nov. 30 when the team started playing better,” Waddell said. “Since Dec. 21, we’ve been averaging 2.700 more people per game.”

John Gallagher, president of the Hurricanes Booster Club, said his group has added 15-20 more members since last year. “There is renewed energy with the influx of new, young talent,” Gallagher said. “They are playing ahead of their scheduled development. This is a great cause of excitement and optimism for this year and years to come.”

Hurricanes General Manager Ron Francis, former Hurricane and a member of the Hockey Hall of Fame, is rebuilding the team through trading older players for younger and acquiring future draft picks.

“They have a nice core of young players,” said Dave Droschak, the marketing person for Backyard Bistro who also has a background in sports writing. “But they are probably a couple of years away.”

While the Hurricanes have come close to making the playoffs, this year included, there just isn’t much excitement when the team misses the playoffs over and over.

“Winning is the answer,” Droschak said. “In 2006, we all saw what it was like here. It was crazy. But it takes an exciting brand of hockey, winning and getting in the playoffs consistently. Then everybody wants to be on that bandwagon.”

Waddell said people in the area got spoiled – in a good way – by the early success of the franchise. The Hurricanes made the playoffs in their second season in Raleigh, playing in what was then called the Raleigh Sports and Entertainment Arena. In their third season in Raleigh, the Canes made it all the way to the Stanley Cup Finals before losing to Detroit.

The magical run in 2005-06 gripped the area as the Hurricanes Stanley Cup championship marked the first professional major league sports title for a team from the state of North Carolina.

But the economy soon hit a downturn and losses started mounting up for the Canes. “We made it too easy for people to walk away,” Waddell said. “When the economy turned, it hit every market. And when you don’t have the product to support it, discretionary money goes elsewhere.”

This past season the Hurricanes were dead last in NHL attendance at a little more than 12,000 per game. Of course the PNC’s seating capacity for hockey is smaller than most NHL arenas at 18,680.

In the first couple of years after winning the Cup, the arena – at the time called the RBC Center – was averaging 15-16,000 for Hurricanes games.

“The market has changed drastically since then with more of an influx of people from the north, some of whom are going to be hockey fans,” Waddell said. “If we put the product on the ice that we believe we will, there’s no reason we don’t get back to where we used to be and even better.”

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