How a failed NHL expansion bid in Raleigh led to the Carolina Hurricanes’ existence

On the eve of the NHL’s latest expansion draft, meant to stock Seattle with enough talent to compete as the league’s 32nd entry, a fun tidbit:

Raleigh, this could have been you.

Raleigh nearly entered the National Hockey League with an expansion team in 1997. No, it would not have been named the Carolina Hurricanes. It’s a stretch to believe it could have won a Stanley Cup by 2006. Peter Karmanos would have moved the Hartford Whalers elsewhere. Rod Brind’Amour might never have come to Raleigh, either.

And, the team may not have lasted all that long.

One of the top money men in the prospective ownership group, Bernard Ebbers, entered federal prison in 2006 after one of the most extensive security fraud and conspiracy cases in U.S. history. That came after three years of highly publicized indictments, charges and court appearances. Imagine the ramifications of that on a hockey team.

“That would have been a disaster because our franchise owner would have ended up in the hoosegow,” former Raleigh mayor Tom Fetzer said Monday in an interview.

With the Kraken set to begin play, it’s a good time to flash back to 1997. In a matter of months, a strong expansion bid by the Ebbers group fell through and Karmanos soon had a new home for his team.

“Fate smiled on us,” Fetzer said.

Looking to expand

The front man for the expansion group was Charlotte businessman Felix Sabates, a NASCAR team owner and the owner of the Charlotte Checkers hockey team, then in the ECHL and the league champions in 1996.

Sabates, ever loquacious and often outspoken, was the perfect guy to represent and do most of the talking for the prospective ownership group. Ebbers, who died in 2020, was more quiet and reserved, staying in the background, a Canadian by birth who had played basketball at Mississippi College and would become a major player — if only for a few years — in the then-burgeoning telecommunications business.

“I’m a very competitive business person,” Ebbers said in a 1997 interview with the News & Observer. “I think some of that is from my sports background.”

Ebbers, then 55, had become CEO of WorldCom, which acquired MCI Communications and made a failed attempt on a $115 billion acquisition of Sprint Corporation. Antitrust issues put an end to that bid, but the rapid growth of WorldCom made Ebbers a very rich man.

Ebbers likened obtaining an NHL expansion franchise for the Triangle to completing a standard business deal, with networking, relationships slowly built, differences settled and cooperation obtained to achieve the end goal.

“I’ve spent a lot of my time doing mergers and acquisitions,” Ebbers said in the 1997 interview. “I’m not a newcomer to the political workings of how things get done. You start out and you court each other. We courted the city and the city courted us. Then you get down to each group and representing their interests. There’s not always going to be 100 percent agreement but the overriding feeling is that the community wants it.”

At the time, the NHL expansion fee was $80 million — or about $135 million in 2021 dollars. The Seattle Kraken’s expansion fee was $650 million. The Vegas Golden Knights paid $500 million in 2017.

“The NHL is on the rise,” Ebbers said in ‘97. “History will show how much it costs to get a franchise today and how the value of franchises increase.”

The Whalers sold for $47.5 million in 1994. The Hurricanes franchise, now owned solely by Tom Dundon, was valued at $440 million in the most recent Forbes valuations of sports franchises.

Making their pitch

So, why Raleigh? And why then?

With plans under way for building a new arena near Carter-Finley Stadium, the belief was that an NHL could share the building with N.C. State’s men’s basketball — and share the costs of the construction. The NHL was looking to expand, and a newly formed group, the Research Triangle Sports Council, joined the Greater Raleigh Chamber of Commerce and Fetzer in promoting the effort and pushing for someone to enter an expansion bid in the fall of 1996.

“We had a practical situation and needed someone to help fill up that building 40 or 50 nights a year,” Fetzer said Monday. “We needed another anchor tenant and it just so happened the NHL was going through an expansion phase.”

The Sabates group jumped in and made the bid. In January 1997, the Sabates group joined 10 other applicants bidding for expansion teams in making formal presentations to the NHL’s executive committee in New York. The Sabates group invited Fetzer and others along for a united front of what had been often bickering parties, all the better for the optics.

“I sensed the mood in the room with the (NHL) governors was very positive, very favorable about the presentation, the content of the presentation,” Ebbers said in 1997. “Not to brag, but I haven’t been involved in a making an acquisition on behalf of my business that I didn’t get done.”

Sabates was confident. The day before the presentation, he looked at a map featuring NHL cities, pointed to the Triangle and said, “Look at the NHL footprint. We would be smack-dab in the middle of the Eastern seaboard. The NHL is looking for TV markets and areas with growth. We have that. And we have 90,000 college students in the area. The NHL is a youth-oriented league, with much of its licensed merchandise geared to youth.”

Atlanta and Nashville were considered locks for new expansion teams. Ted Turner was backing the Atlanta effort, Sabates quipping at the time, “He can pull a sheet of legal-pad paper and write ‘I am Ted Turner, give me a team’ and he will get one. The rest of us have to spend all this money on our bids.”

NHL commissioner Gary Bettman had shown interest into further expanding the league into the Southeast — the Tampa Bay Lightning first began play as an expansion team in the 1992-93 season — the Triangle had a lot to offer. At the time, it was the largest TV market in the nation without a major-league team.

When the Sabates group made its presentation to the NHL governors, in the room and listening was Karmanos, not a member of the executive committee then but an interested observer and an owner dead-set on relocating the Whalers.

“Little did we know we were paving the way for someone else,” Sabates told the N&O in 1997.

Falling through

The Sabates group had taken a memorandum of understanding on a proposed arena lease to the NHL presentation. Organizational plans were under way. The late Carl Scheer, who had been general manager of the Checkers and was a former GM in the NBA and ABA, headed up operational plans for the Sabates group.

But in the next month, the expansion bid began to crumble.

The arena lease negotiations were contentious. Sabates, increasingly frustrated, believed the Centennial Authority, an appointed group formed to oversee the arena, was more concerned about N.C. State interests than the hockey team’s interests. There was a lot of haggling, much of it publicly.

“The lease was an Achilles problem throughout,” Harvey Schmitt, former CEO of the Greater Raleigh Chamber of Commerce, said in an interview Monday. “We were always at risk because the arena deal wasn’t closed during that process. My feeling was we were always hopeful but we also understood the risk.”

On Feb. 17, 1997, Sabates withdrew the expansion bid, calling it a “crying shame for the region.” Others said the market would continue to be attractive for a major-league team — and it was.

Enter the Hurricanes

In May, Karmanos announced the Whalers were moving to Raleigh and would be called the Carolina Hurricanes, a name he said he picked because it was one people would “remember easily.”

“Things moved so rapidly,” Schmitt said Monday. “We went from chasing an expansion franchise and losing the deal in February to wining and dining Karmanos in March.”

The new expansion teams were the Atlanta Thrashers, Nashville Predators, Columbus Blue Jackets and Minnesota Wild. In the expansion drafts to follow, NHL teams were allowed to protect one goalie, five defensemen and nine forwards; or two goalies, three defensemen and seven forwards.

Canes forward Jeff Daniels, now a Carolina assistant coach, was taken by Nashville in the 1998 expansion draft, and the Thrashers took goalie Trevor Kidd from the Canes in the 1999 expansion draft.

In June 2000, the Blue Jackets and Wild drafted their teams. The Hurricanes lost forward Robert Kron to the Blue Jackets and defenseman Curtis Leschyshyn to the Wild.

Ultimately, better off

There was no immediate success for the new teams, nothing like Vegas’ splashy entry into the league and the march to the 2018 Stanley Cup finals.

Atlanta won 14 games in its first season (1999-2000), finishing last in the Southeast Division, and the Predators 28 in 1998-99, their first season -- Nashville’s first franchise win coming against the Canes. The Wild finished last in the Northwest Division and the Blue Jackets last in the Central in 2000-2001, their first seasons.

The Hurricanes, after the move to North Carolina in 1997, reached the playoffs in 1999, 2001 and 2002. Playing the first two seasons before sparse crowds in Greensboro while the arena in Raleigh was completed, it was a tough go financially for Karmanos and the Canes. But the Canes were Stanley Cup champions in 2006.

“I think we did better by not (getting an expansion team),” Schmitt said. “I think having an established product was a better situation for the market. A struggling expansion franchise might have damaged the product in the market.”

Sabates, 75, still lives in Charlotte. He sold the Checkers but later joined Scheer in buying the team back in 2002. The Checkers later became the Canes’ AHL affiliate under another owner, Michael Kahn, and now have a joint affiliation with the Florida Panthers and the Kraken.

Had the Triangle gotten an expansion team in 1997, it’s hard to say what would have unfolded given Ebbers’ legal and financial problems. There might not be an NHL team in Raleigh — that’s one possibility.

Ebbers, ultimately, was sentenced to 25 years in federal prison in 2005 for conspiracy and security fraud. After losing an appeal, he reported to a Louisiana prison facility in September 2006, driving himself to the front gate in a Mercedes. He was granted early release from prison for health reasons in December 2019 and died in February 2020 at age 78.

Before his legal problems intensified, Ebbers did find a hockey franchise to own: the Jackson Bandits, an ECHL team based in Jackson, Mississippi.

The Canes, meanwhile, are still in Raleigh. They’re coming off the first stretch of three consecutive playoff appearances in franchise history, and looking to build on a strong, young nucleus of players in this year’s NHL Entry Draft — after they cede a player to the NHL’s newest expansion team Wednesday, that is.

(Chip Alexander covered the Raleigh expansion bid for the N&O.)