MAKING A RELOCATION, PART SIX: Dirty Deeds (Done for $45 Million)

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“Making A Relocation” is an ongoing series exploring the inconsistencies between the facts and the public narrative surrounding the demise of the Hartford Whalers. If you’re new to the series, we recommend that you start at the beginning:


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Much has been made of Peter Karmanos and the public drama leading up to relocation, but as we come to a close here I won’t spend much time on that. Besides being the most familiar and well-remembered part of the story, it was a farce. Bread and circuses.

What I find much more interesting is the year leading up to Karmanos purchasing the team in 1994.

It always felt a little too neat to me. Having filled in the gaps, it feels meticulously orchestrated. Like anyone else in Hartford, I’ve been over this part of the story dozens of times, but when I re-read it prior to writing this instalment it was with fresh eyes and the benefit of a lot of new information. It made me physically ill.

If you need a refresher before we begin, I recommend this article from sporttoday.org by Steve Gallich. It’s not an account I agree with, but it’s an excellent representation of the “official” explanation for the sale of the Whalers to Peter Karmanos.

Rewind to 1993. Following a series of failed attempts to relocate both the Patriots and Rams of the NFL to Hartford and for costs ranging from $175-$250 million, a deal was struck to keep the struggling Whalers afloat. The state gave Gordon $30 million to pay down debts and rent-free usage of the Civic Center, in exchange for a 20-year commitment to the state and the rights to all revenue from luxury seating.

When the deal was announced, all anyone heard was: The Whalers will be here for twenty more years. While a few cynics, most notably Jeff Jacobs of the Hartford Courant, were wary of a quick fix that seemed too good to be true, most people were just happy for an end of the dark years. The halcyon days of Whalermania and Ron Francis didn’t immediately resume, but things got better. The 1994-95 season saw an average attendance increase of about 1500 officially, which was more like 2500 if you factor in the luxury seating that now belonged to the state and was not factored into official head counts starting that year.

The optimism ignores two important problems:

First was the issue of the luxury seating. It largely ignored at the time, disregarded as an irrelevant detail buried in a story about a 20-year lease. What this arrangement actually represented was a final step in the wrong direction. With parking, concessions and now luxury seating revenue all out of the state’s hands, the Hartford Whalers were now completely out-of-step with any semblance of a  working, modern-day NHL business plan. There was a twenty-year lease, but in the absence of any means by which the team might turn a profit, it was toothless. The days of gate revenue from ticket sales carrying a team were over. There was no NHL television deal. The salary cap and revenue sharing were still years off. Arena revenue was the team’s only hope to turn a profit as a small market team in the nineties. This deal to “save” the Whalers was in fact a subtle death blow.

The second problem was the twenty-year commitment itself. While it sounded great, the fact that the lease’s natural termination in 2014 is not fresh in our memories says it all. Not only did it not last 20 years, but the promise was broken in less than a single year. The deal included a clause giving the state first right to purchase the team in the event that Gordon continued losing a money (in hindsight a certainty that all parties must have anticipated), and conversely gave Gordon the right to sell or move the team if the state declined to exercise this option.

Less than a month after receiving his $30 million bailout and pledging his two-decade commitment to Hartford, Richard Gordon exercised his option to move the team and put the NHL on notice as to his intent to relocate the Whalers. He dismissed it a mere “precaution” in the event that the state failed to exercise their option to buy the team.

Within six months of announcing his intent to sell, two competing bids had emerged. First came an offer from a group of local businessmen fronted by William F. Dowling. The second was from Peter Karmano of Compuware, a group which as we’ve previously established in this piece, was known to be seeking small market teams with the intent of southern relocation. When I first found that particular smoking gun, I believed it be the only surviving public mention of that history. Purchasing the Whalers with intent to relocate them might border on criminal given the significant involvement of public money and promises to the contrary; it certainly would constitute ethical grounds to invalidate the eventual inclusion of Peter Karmanos in the Hockey Hall of Fame.

Since then, I was shocked to discover this article from the Courant archives which, among other disturbing details of sale, explicitly references the legal complications from an existing arrangement Karmanos had in Arizona and a failed expansion bid in Florida. Not only does this remove any doubt of his interest in southern relocation and expansion, but removes any doubt of the state’s knowledge of his intentions. There is a dizzying disconnect reading these ancient broken promises, the empty mantra of “committed to Hartford” repeated over and over, with the advantage of hindsight.

Peter Karmanos is a terrible human being. I’ve expounded at length in the past about the damage he has done to Hartford, if only in the lies he told in the moment and ever since to justify what happened in Hartford. He certainly dealt a near-fatal blow to our regional pride. But I can’t say he is responsible for what happened to the Whalers, not after all of this.

The deed was done before he ever stepped foot in Hartford.

Listen to how this went down. It’s nauseating.

Dowling made the first offer to buy the team. The price was predetermined by the deal made with Gordon, $45 million dollars. The offer had more to do with the size of the intitial down payment, length of commitment to Hartford, and whatever other added value the investors could bring.

Less than a month after Dowling’s offer, the Compuware group made one of their own. The original offer by Dowling is unknown, but was thought to be slightly lower than the $20 million down payment offered by Compuware. Dowling’s group immediately countered with an offer of $29 million down and a 7-year commitment to Hartford. Their original offer included no specific clause regarding relocation, which probably seemed unnecessary given the existing 20-year lease and Dowling’s local roots. However, the Compuware group had offered four years.

Here we have another one of those things that doesn’t make much sense until you figure out the angle being worked. Why it was necessary for the state to purchase the team and facilitate the negotiations?

The state’s role as middle man served two purposes: First, it quietly paid out the remaining 25% of local corporate ownership, severing the team’s strongest tie to Hartford. Second, it invalidated 20-year clause of the lease and prevented that commitment from being passed on to the new owner. Per usual, the public face of these deals rarely bears any resemblance to the actual intent or consequence.

On Tuesday, May 31, 1994 a surprise meeting was called for both bidders to present their final bids to the Connecticut Development Authority. The Compuware group arrived promptly at 3:00pm, spoke briefly with the CDA and headed out to the TPC Highlands golf course in Cromwell. Dowling’s group arrived at 4:30pm, and waited for three hours before discovering that the CDA had not just called a surprise meeting, but that they’d already voted. Without hearing Dowling’s proposal, and in spite of the fact that he was local and offering both a larger down payment and a longer commitment, the CDA has unanimously chosen Peter Karmanos as the new owner of the Hartford Whalers.

In the words of Dowling’s attorney, John Droney, “It was very discourteous and very unfair. They didn’t give us a chance to compete. It was ridiculous.”

Feeling sick yet? Ponder this for a moment.

Think about all of the agonizing we did in previous instalments about the endless series of bad decisions made by Richard Gordon. It was hard to escape the sense that he was deliberately sabotaging the franchise, but equally difficult to figure out why.

A few years later, it was all spelled out. The CDA, in defending a seemingly inexplicable decision on their own part, held up a laundry list of Gordon’s bad decisions as if it were a shield and hid behind it while shouting about the importance of “experience” and “knowledge of hockey”. He gave them the only justification possible for ignoring the substantially higher offer and local ownership offered by Dowling, an preemptive ace-in-the-hole to be used against any local fool passionate enough to outbid Karmanos or offer to bankroll a new arena.

Little was made of the fact that while Dowling had actual major league experience with the New York Yankees, the only NHL experience Peter Karmanos had was in several failed attempts to relocate or expand into southern markets. He had spent a lot of time indulging in his hobbyist’s passion for hockey as a benefactor of youth and junior hockey in Michigan, but there is no evidence that he’s earned a penny running hockey teams to this day. In 2016, the Carolina Hurricanes are still owned by Karmanos and average several thousand less in attendance than the Whalers did in their last season and lose millions of dollars every year. Of course, his competency was never an issue. He wasn’t going to be Hartford’s problem for long.

The case for Dowling can only be extrapolated from his offer and angry comments to the press, as he was never given a chance to formally make a case.

Gordon, for his part, had his debts erased at state expense and received more than twice his initial investment back in the end, this despite having turned the Whalers from one of the league’s most valuable teams to the one of the least.

It’s hard to say exactly when Weicker and Karmanos first spoke. I suspect the details will go to the grave with them. It’s safe to say an informal arrangement was worked out before Gordon received his $30 million, as that deal only makes sense if you assume the prior intent to eventually sell the team out of state, which would mean it was in the works more than a year before anyone in Hartford knew the name “Karmanos”. It’s possible, if not probable, that he’d been colluding with Gordon for years to turn the Whalers into a lame duck and attract a relocation buyer.

What’s not speculative in the least is that immediately following the sale of the Whalers, Lowell Weicker’s term ended and he was awarded with a job on the board of Compuware.

The deed was done.


 

 

 

 

 

 

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4 thoughts on “MAKING A RELOCATION, PART SIX: Dirty Deeds (Done for $45 Million)

  1. Pingback: MAKING A RELOCATION, PART SEVEN: Dead Whale Walking | exile on trumbull street

  2. Pingback: MAKING A RELOCATION, PART EIGHT: Requiem For a Pipe Dream | exile on trumbull street

  3. Pingback: MAKING A RELOCATION: The True, Untold Story of How Hartford Lost the Whalers | exile on trumbull street

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