Blog Entry

Devils ownership in flux amid bankruptcy report

Posted on: September 12, 2011 1:24 pm
Edited on: September 12, 2011 3:04 pm
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By Brian Stubits

Last season the New Jersey Devils took a staggering stumble to the bottom of the NHL before a late-season surge brought them back to the level of respectability.

Now they are might be taking another fall. The New York Post's Josh Kosman reports the team is on the verge of bankruptcy after missing a loan payment on September 1. Typically, creditors don't appreciate that much.

The team’s financial hardships could also affect Newark’s four-year-old Prudential Center, the Devils’ home arena. Team-owned Devils Arena Entertainment operates the $375 million building and guarantees the Devils’ loans and, therefore, is in danger of also going bankrupt.

Two issues are complicating matters. First, principal owner Jeff Vanderbeek and co-owner Ray Chambers, each of whom owns 47 percent of the franchise, are on the outs. Chambers, through his Brick City Hockey unit, has been trying to sell his non-controlling stake in the franchise for a year.

But the efforts of Chambers and Moag & Co., a Baltimore investment bank, have been unsuccessful, despite, a source said, cutting their asking price 20 percent to $200 million. Forbes last year estimated the Devils were worth $218 million, No. 11 in the league, down 2 percent from 2010. The team is ranked No. 25 in attendance.

Second, Vanderbeek’s relationship with the lenders is as frosty as the rink surface at The Rock, as the arena is known.

The Devils have told their banks to get lost, the source said.

The Devils’ past-due loan payment of roughly $100 million is owed to a CIT-led lending group. Devils Arena Entertainment owes $180 million, the source said.

For their part, the Devils came out with a statement later Monday:

"Today’s New York Post story is inaccurate. The notions that the Devils are facing bankruptcy or that 'the Devils have told their banks to get lost' are patently untrue. The Devils value their relationship with their banks and are confident a refinancing will be completed shortly. As stated previously, ownership is close to finalizing an agreement that would lead to a buyout of Brick City’s share of the company."

To read the full statement, see Tom Gulitti's blog.

But what remains is that, despite their long run of success (besides last season), the Devils have struggled to bring people through the gates, plus they have loans on the still-new Prudential Center. It's a recipe that has led to the franchise losing money. Plus, minority owner Ray Chambers has been looking to sell his 47-percent interest in the organization after a falling out with primary owner Jeff Vanderbeek. It doesn't paint a very stable picture for the franchise's future.

These are certainly new times for the Devils. They suffered through last season partly because of salary cap issues after re-signing Ilya Kovalchuk. That has led to as big of a step back as the Devils have had in a long time. The have a newcomer on the bench (somebody from outside the organization) in former Panthers coach Pete Deboer. They were in the top five of the draft where they picked the concensus top defenseman available in Swede Adam Larsson.

Playing a role in the troubles, too, is the NBA lockout. That's because the New Jersey Nets, scheduled to play their final season in New Jersey at the Prudential Center this year, don't have any games lined up at the moment because of the labor strife. Nets games were a solid source of income for the Prudential Center.

While it's not a prerequisuite, it would sure help the Devils return to the top of the standings on an annual basis with a stable ownership situation. Either way, it's hardly the news a team wants to hear the week training camp opens.

Photo: Getty Images

For more hockey news, rumors and analysis, follow @EyeOnHockey and @BrianStubitsNHL on Twitter.

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Comments
kkjyywlpo
Since: Dec 2, 2011
Posted on: December 15, 2011 10:05 pm
This comment has been removed.

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Since: Sep 10, 2011
Posted on: September 13, 2011 9:20 pm
 

Devils ownership in flux amid bankruptcy report

hahaha 50 points maybe, overated russian version of brett hull, who also stunk.



Since: Jul 1, 2010
Posted on: September 13, 2011 9:18 pm
 

Devils ownership in flux amid bankruptcy report

 
Also 13k fans @ 65 bucks a seat, is just as good as 17k fans showing up in Tampa for 10 bucks a pop.
The difference isn't the revenue brought in on it's own, the difference is also the 250ish million the Devils owe compared to the 45 million the Lightning owes.    Neither team did well on their bottom line of their hockey operations numbers, but because NJ owes more than the team is worth, it's much more sensitive to that franchise.  

I'm guessing the numbers don't help out in the refinancing either, otherwise we never would have read a story about their potential financial drama. 

Has anybody from the Devils publicly stated if they did or did not miss a payment?



Since: Aug 25, 2006
Posted on: September 13, 2011 7:08 pm
 

Devils ownership in flux amid bankruptcy report

I'm left scratching my head. (It is impossible to know who anyone is replying to on this website) Do the Devils have attendance issues?  Sure.  They finally started doing some REAL marketing.  The Arena is a $hitty city, but its certainly not walking through the hood.  Its actually wonderful and easy to get to.  Also 13k fans @ 65 bucks a seat, is just as good as 17k fans showing up in Tampa for 10 bucks a pop.  I don't doubt that they have money issues, and I also don't doubt that the NBA lockout is going to hurt the Devils wallets.  Unlike the Rangers who will just jack up cablevision rates to make up for the difference.  I'm not worried.  There are 10 other teams that will move before this team.  Plus Kovalchuk will get 50 this year.



please tell me where i can get those 10 dollar seats....because i cant find them.



Since: Aug 27, 2006
Posted on: September 13, 2011 5:38 pm
 

Just like reading a threads on the site,....

I'm left scratching my head. (It is impossible to know who anyone is replying to on this website) Do the Devils have attendance issues?  Sure.  They finally started doing some REAL marketing.  The Arena is a $hitty city, but its certainly not walking through the hood.  Its actually wonderful and easy to get to.  Also 13k fans @ 65 bucks a seat, is just as good as 17k fans showing up in Tampa for 10 bucks a pop.  I don't doubt that they have money issues, and I also don't doubt that the NBA lockout is going to hurt the Devils wallets.  Unlike the Rangers who will just jack up cablevision rates to make up for the difference.  I'm not worried.  There are 10 other teams that will move before this team.  Plus Kovalchuk will get 50 this year.



Since: Apr 4, 2007
Posted on: September 13, 2011 4:11 pm
 

Devils ownership in flux amid bankruptcy report

First of all, the entire team is valued at $218 million, but Ray Chambers is trying to sell his 47% stake for $200 million? I'm pretty good at math, and 47% of $218 million is not $200 million. They need to get Chambers out of the way, and fast, as this ownership situation is making things much worse than they should be.

This team's ticket prices are absolutely outrageous. Even the most loyal of Devils fans cannot afford to go to more than a game or two, let alone buy season tickets. Every team goes through periods where wins don't come easily, and this team has had such a long string of successful seasons, that a year like last year was due. That is not the reason why this team struggled at the gate last year. It's because they have raised the prices to exorbitant levels, during a period of financial distress. Then, when you add a losing team to the mix, attendance goes down.

They have made some good changes as far as talent is concerned. There's more to come. But they need a better business model and that starts with stability at the top.



Since: Sep 13, 2011
Posted on: September 13, 2011 3:15 pm
 

Devils ownership in flux amid bankruptcy report

Who can you belive now-a-days?  I can see the having financial issues but bankrupt?  not likely.  They will have some type of refinance in the works.  They really need to shore up the offence.  I don't see a lot of high power on the front lines




Since: Dec 11, 2006
Posted on: September 13, 2011 9:16 am
 

Devils ownership in flux amid bankruptcy report

Who Cares???  The Sabres are winning the Cup so all this other garbage is irrelevant.   LET'S GO BUFFALO!!!



Since: Aug 1, 2011
Posted on: September 12, 2011 11:36 pm
 

Devils ownership in flux amid bankruptcy report

This story broke by the New York Post, lol. national inquirer called and said if they ran this story they would actually be more respected than the Post.

They ain't bankrupt.

Banking industry in bad shape still, that should be the their story.

Devils got some good young players, Adam Larrson got Lidstrom comparison and scouts don't make a comparison like that often. Josefson and Tenenby look like they will be good as forwards and both former 1st round draft picks like Larsson.

The Devils have told their banks to get lost, the source said.

Journalism at it's finest. TMZ is hiring.







Since: Jul 8, 2008
Posted on: September 12, 2011 9:02 pm
 

zig6288...i didn`t say EVERYwhere

I said most places and most people.I agree with you.There`s definetely hockey fans in the USA,and Philly`s got some of the best.And they know their hockey !No argument there.I`m just saying,i DON`T think there`s as many American tax payers or billionaires funding the NHL as there are funding the NFL. Just a guess


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