Blog Entry

'Forbes:' Devils headed right for bankruptcy

Posted on: November 4, 2011 3:10 pm
Edited on: November 4, 2011 3:16 pm
  •  
 

By Brian Stubits

New Jersey Devils fans, you might want to study up on the ownership situation in Dallas the past few years, because that could soon be your team's fate, too.

At the beginning of September, the New York Post reported that the Devils controlling owner Jeff Vanderbeek had not paid a loan payment and that bankruptcy was down the road. For their part, the Devils categorically denied the report.

Well, the report is back, this time from a what most would consider a rock-solid source when it comes to the finances in hockey, Mike Ozanian of Forbes magazine.

Yesterday afternoon I tweeted that creditors of the Devils and the Prudential Center were looking to unload the National Hockey League team’s debt at a steep discount. Last night the Globe and Mail reported the same story. From working on our NHL team valuations, which will go live on Forbes.com Nov. 30, I can tell you the Devils have over $250 million of debt piled on the team and arena, which they control. The debt is growing because Vanderbeek, unable to make interest payments, is capitalizing the interest.
Vanderbeek already missed a $100 million principal payment that was due Sept. 1. He was given an extension by the lenders in order to try and raise enough money to buy out co-owners Ray Chambers and Mike Gilfillan, but they wanted no part of it. Vanderbeek can buy some time because technically the team cannot be forced into bankruptcy by creditors until after the Stanley Cup finals. But the longer he holds onto the team the bigger the debt problem because he is not making interest payments.

None of that sounds promising. As Ozanian points out, it's looking very similar to the situation the Stars found themselves in when owner Tom Hicks couldn't pay his interest payments which ballooned to $600 million before he defaulted. It looks like Dallas is ready to crawl out of that situation as they work on finalizing a deal with Vancouver businessman Tom Gagliardi.

You wonder if the Devils wouldn't like to have the decision to build the Prudential Center over again. The financial hardships from it have clearly been too much for Vanderbeek to handle. Moreover, attendance has not been good to only make matters worse. They are just 26th in the league in average attendance, playing, or 25th if you prefer to look at percentage of tickets sold. They have sold 78.7 percent of their seats.

Ozanian concludes with some advice for commissioner Gary Bettman:

NHL commissioner Gary Bettman needs to step up and get Vanderbeek out. The Stars are being sold at a cheap price with creditors taking a steep haircut. The same thing is almost certain to happen with the Devils. All this is bad for business, bad for the league’s brand and bad for NHL team values.

Photo: Getty Images

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

  •  
Comments

Since: Jan 2, 2007
Posted on: November 6, 2011 9:17 am
 

'Forbes:' Devils headed right for bankruptcy

Not with a Brand New Arena...

This comment indicates that you do not fully appreciate the potential seriousness of the Devils' situation.  Bankruptcy is, unfortunately, a familiar beast on the NHL landscape, (icescape?).  I agree that every effort will be made to save the franchise for NJ, and part of that will be due to the new arena in Newark.

However, if this gets nasty, and it could, then the league could have another PHX situation on their hands.  Getting a new owner to buy that franchise should not be too difficult, but getting them to commit to the NJ/Metro-NYC market is another matter.  After all, even with the new arena, NJ stands in 26th place this season in average home attendance and they are at less than 80% of capacity.

NJ is a great hockey market, but much of the credit for that goes to the tenacious loyalty of Rangers' fans.  (This is not a NYR vs. NJD spat; this is backed up by empirical evidence.)  Does NJ really deserve a team?  Should the NHL have three franchises in one market when there are viable markets looking for one team? ...



Since: Aug 27, 2006
Posted on: November 5, 2011 6:43 pm
 

HELLO MARC CUBAN!!!!!!

Bring em in!



Since: Aug 27, 2006
Posted on: November 5, 2011 6:40 pm
 

'Forbes:' Devils headed right for bankruptcy

Not with a Brand New Arena.....



Since: Jan 2, 2007
Posted on: November 4, 2011 10:18 pm
 

'Forbes:' Devils headed right for bankruptcy

The Devils were real close one time to moving to Nashville.  It would be ironic if they were to end up in Kansas City.  After all, they are the former KC Scouts, by way of the Colorado Rockies.

The New York metro market will have at least two teams and despite a vastly superior product over the past many years, NJ has never been supported well compared to the Rangers.  If the NYI can settle their arena situation then they'll be staying too.  As a Sabres fan, I can attest to how nerve-wracking a bk can be; I am not wishing any ill-will on NJ, but I think that Devils' advocates have a lot to worry about. 




Since: May 13, 2011
Posted on: November 4, 2011 9:51 pm
 

'Forbes:' Devils headed right for bankruptcy

"Bad for the leagues brand."

That is bettman being commissioner still after 18 years.

Little gary and his sidekick daly won't mind having the league take over another team. The Coyotes need company being owned by the NHL.

That Stars sale hasn't even gone through yet and that new owner is a Canadian who probably wants to move the team eventually.

I haven't heard anything about NYI owner Wang being a stupid businessman in huge debt. He's just frustrated a new arena hasn't been built yet on Long Island from what I've read because of the lousy politicians there.

Hand over team to David Putty or The Sopranos in Newark.

New arena and fans don't want to go games, lol.  Maybe that dumb owner should of done some market research before deciding to built the new arena where it's at, jeez.

Vanderbeek the former executive VP of Lehman Brothers, haha. Shocking to hear he effed up the NJD's too. haha.





Since: Sep 16, 2007
Posted on: November 4, 2011 9:08 pm
 

'Forbes:' Devils headed right for bankruptcy

What does this have to do with the Islanders?

Oh nothing, nothing at all. The hockey team plays in a parallel universe somewhere, completely unaffected by the ownership's financial problems.



Since: Nov 6, 2009
Posted on: November 4, 2011 7:40 pm
 

'Forbes:' Devils headed right for bankruptcy

What does this have to do with the Islanders?



Since: Aug 15, 2006
Posted on: November 4, 2011 6:27 pm
 

'Forbes:' Devils headed right for bankruptcy

And people still believe the Islanders will say in NY.  Someone is going to go to Kansas City.  They may be willing to bail the Devils out of their debt provided the team moves to KC.  So will this team be heading west.  Or will as some have suggested the NHL will fold two teams one of them being the Devils?


The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com