Tag: New Jersey Devils sale

New Jersey Devils v Florida Panthers

The Devils have an interested buyer? Sort of

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The New Jersey Devils are swimming in a mountain of debt and while that might not sound like an appealing situation to bring about any interested buyers, there’s a guy out there looking to dive in head first.

The New York Post reports that billionaire investor Nelson Peltz is interested in buying the Devils out of their $250 million debt and getting involved directly with the team. Peltz’s plan involves setting up an equity investor to buy the team should the Devils fail to restructure their debt. The Post also reports that the NHL has given approval to Peltz’s plan to acquire the team’s debt.

Devils owner Jeff Vanderbeek is trying to arrange things behind the scenes to try and get a television deal worked to get $80 million to put towards the team debt and get things restructured. If he’s able to do that, Peltz might be out in the cold. Considering how poorly the money has gone with Vanderbeek to this point, the Devils are probably better off having Peltz come through with his plan.

The Devils need to get things figured out soon before it becomes a huge boondoggle in Newark to add to other financial messes around the league in Phoenix and Columbus. On the upside, Peltz is a huge hockey fan and his son was drafted by the Senators in 2009. Having a hockey fan buy a team worked out nicely in Buffalo.

(Hat tip to Kukla’s Korner on the story)

New Jersey Devils claim that bankruptcy report is inaccurate

New Jersey Devils Re-Sign Ilya Kovalchuk

Earlier today, The New York Post released an exclusive article that claimed the New Jersey Devils could be headed for bankruptcy after failing to pay back a loan on Sept. 1. The story illustrated what might be a significant issue for the franchise, especially since the Prudential Center could be prone to losses if the NBA’s lockout robs them of New Jersey Nets games.

The Devils’ brass didn’t respond to interview requests from the Post, but they did release a statement about the matter today. The team reiterated their statements that their ownership situation should be resolved. The plan is that co-owner Jeff Vanderbeek will buy out Brick City LLC (both parties currently own 47 percent of the shares) and then the franchise will be able to complete a refinancing process.

Here is the team’s statement that refutes the article, via Tom Gulitti of Fire & Ice.

“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. The organization is also pleased to report that new season ticket sales are up 130% over last year and last week’s on-sale for single game tickets were 260% above last year’s similar period.  Finally, the start of training camp was incorrectly reported in the article as tomorrow. In fact, training camp starts on Friday for the rookies and Saturday for the veterans.”

Hopefully it’s true that the Devils aren’t in as dire a situation as the Post reports. The NHL has enough problems on its hands with teams such as the New York Islanders, Phoenix Coyotes and Columbus Blue Jackets struggling. The last thing it needs is to hear rumors fly around about a team that won three Stanley Cups since the mid-90s.

It might be a while before there are any other significant developments in this story, but we’ll keep an eye on the situation either way.

Report: Devils miss Sept. 1 loan payment, could face threat of bankruptcy

Buffalo Sabres v New Jersey Devils

Last season was a tough one on the ice for the New Jersey Devils, but a report in The New York Post indicates that things are much rockier on the accounting spreadsheets. Josh Kosman cited an anonymous source who reports that the team missed a $100 million Sept. 1 loan payment, which is a troubling issue because it could push the franchise toward bankruptcy.

The bankruptcy problems could also reportedly extend to the Prudential Center, the Devils’ four-year-old arena located in Newark. Devils Arena Entertainment is on the hook for $180 million in payments, according to Kosman and other reports.

The source told Kosman that the Devils are “blowing up,” which we will assume isn’t slang for “on a roll” in this instance. The report indicates that the Devils’ issues are multifaceted.

The first problem is that the team’s ownership is in a state of flux, even if majority owner Jeff Vanderbeek stays in the picture. Co-owner Ray Chambers has been trying to sell his share of the team for about a year but hasn’t had any luck so far. Kosman also writes that Vanderbeek doesn’t have a good relationship with lenders, which could exacerbate the issues.

“You have a bank group that wants nothing to do with Vanderbeek,” said a source, who added they have been upset with how late they have been with financial information.

Some lenders are already considering selling their stakes to vulture investors, the source said.

“This is going to be a very difficult situation.”

The third problem is truly outside the Devils’ hands: the NBA’s lockout could ruin the New Jersey Nets’ final season at the Prudential Center. A full lockout would knock out 25 percent of the building’s 161 scheduled events, which is even more problematic considering the fact that the Nets are reportedly the reason why the building earned its first profitable year. Either way, the Nets aren’t going to be a part of a long-term solution for the Devils’ alleged financial problems.

It all seems like a very messy situation for the Devils, who haven’t responded to the report at this time. Like many other ownership/bankruptcy scenarios, this looks to be a fluid situation, so we will keep an eye out for responses from the team and any other updates.