The financial woes of some of the NHL’s teams are well known. Phoenix, Dallas, Columbus, even the Islanders can get thrown into that mix on occasion. The problems of the New Jersey Devils, however, aren’t played up quite as much… Until now.
Forbes’ Mike Ozanian reports that the Devils are headed towards bankruptcy themselves and that owner Jeff Vanderbeek is compounding the team’s issues by treating the team the same way Tom Hicks did with the Dallas Stars. The issue at hand for the Devils? Vanderbeek isn’t making interest payments on the team. Quotes from the Globe And Mail on Vanderbeek’s inability to pay follow.
Devils co-owner Jeff Vanderbeek already missed an interest payment on the $80-million (all currency U.S.) loan 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.
However, Vanderbeek’s efforts have not paid off yet so he still has not been able to make the interest payment. The Devils are not an attractive property to buyers because of their attendance troubles at the Prudential Center in Newark, N.J. They are 25th among the NHL’s 30 teams in attendance with an average announced crowd of 14,074.
As you might imagine, this is horrible news. Ozanian concludes his report on the Devils saying that the NHL and commissioner Gary Bettman have to do their part to get Vanderbeek out as the owner before the debt issue makes the possibility of selling the team virtually impossible.
Just when you thought things were turning the corner for the league, they’ve got another financial disaster to juggle and this one is in the heart of league’s biggest market.
The Dallas Stars sale is a one man race as Vancouver businessman Tom Gaglardi is reported to be the only person to put a bid in for the team. Forbes.com’s Mike Ozanian reports that while the process for bids on the team was open to anyone willing to throw in on them, Gaglardi was the only guy to do so.
The process of selling the team is an exhaustive one but one that has a simple and eventual finish. While the team will be put through the bankruptcy process thanks to former owner Tom Hicks being terrible about managing his properties, the eventual end game here is that Gaglardi will buy the team and allow the Stars to operate like a normal franchise again instead of like the apprentice to the Coyotes.
The final sale price for the Stars is set to be around $260-$270 million which will take care of their debts, Hicks’ other issues, as well as half the price for American Airlines Arena where the Stars play. That’s a lot of hooch for a hockey team but in the case of the Stars, getting their ownership stuff figured out and allowing them to operate normally should help bring the rabid Stars fanbase back.
The Dallas Stars’ quest to find a new owner seems like it’s getting stranger and more confusing with each passing report.
The latest kerfuffle came as a result of a recently published report from Mike Ozanian of Forbes.com. Ozanian reports that the Stars are losing $1 million per week according to “someone familiar with the negotiations surrounding the team’s pending sale.” The Stars are technically still owned by Hicks Sports Group, but creditors are currently operating the team until it finds a new owner. Ozanian reports that the debt is being “capitalized” rather than being paid. (Defending Big D discusses what exactly that means in their post about the Forbes report.)
In case some of that went over your head, the Forbes source claims that the team is “bleeding money” to the tune of $1 million in weekly losses.
Things seemed dire for the Stars in the last season, but that report paints an even uglier picture than most expected. Perhaps it shouldn’t come as a surprise that a Stars official flatly denied that rumor. ESPN Dallas’ Mark Stepneski quoted a Stars source saying this much.
Dallas Stars official on Forbes report that the team is losing $1 million per week: “Totally, unequivocally untrue.”
These matters tend to get confusing, as it’s tough to tell what is true and what is simply a negotiating ploy. Are the Stars denying that they’re losing money each week or are they just disputing the report that those losses amount to $1 million per week? It’s tough to follow what’s actually happening amid the waves of misinformation and conflicting reports.
Here’s one thing that few would deny, though: the Stars need a new owner and they need one as soon as possible. It’s hard to tell if the team could have retained crucial center Brad Richards even if their situation was stable (it seems like he had his heart set on a reunion with John Tortorella), but their ownership mess made it a much easier choice for the playmaking center. If the Stars want to return to their contending form from the late ’90s, then they need to be able to spend with the big boys and show that the team is in good hands.
It might be a confusing journey until a new owner is made 100 percent official, but we’ll keep you updated through all the twists and turns.