Are the Devils in bankruptcy trouble? UPD: Chambers to pay $25m to exit?

[No Fun Shogun]

I was actually stunned to read this at work earlier today. Knew they were having their fair share of issues, but man alive are they in deep trouble.

Pretty stunning, really.

 

[TheDevilMadeMe]

I remember Brodeur celebrating in the parking lot of their old arena upon their Cup victory in 2000, with some 500 fans.

You're only off by a factor of 80:

At least he will if Devils GM Lou Lamoriello returns. That's what he told the 40,000 or so fans who gathered yesterday outside the Meadowlands arena for the Devils' Stanley Cup celebration.

http://articles.nydailynews.com/200...vils-captain-scott-stevens-devils-stanley-cup

I realize some fans like to kick franchises while they are down, but don't you think you should try to get your figures right if you want any credibility here?

 

[guyincognito]

The troubling part about this is how they managed to survive in East Rutherford since 1982, a place of 10 000 people, and are having trouble now in Newark, a real city!! The Nets of the NBA, are also in some sort of trouble, excluding the fact that the NBA season might be in trouble.

I remember Brodeur celebrating in the parking lot of their old arena upon their Cup victory in 2000, with some 500 fans.

This team has no real solid fanbase and no city to identify with. Upon the success years, they marginally surpassed the Rangers in fan support. The Rangers are a historic franchise, nothing will dethrone them, especially a team that plays in NYC suburbs across the river in a different state, eclipsed by a global city which has twice the population the whole state of New Jersey has as a whole. Even, if the Devils are in the NYC market, they have no reference to the word New York in their title.

They should just move inside NYC and finally call this place, home.

What the hell are you talking about? You have a strong future in the field of hockey writing with that accuracy.

This isn't an operational problem (yet). It's an arena debt problem. They opened an arena in 2007. The lending process ate itself alive in 2008. The only worse case scenario would be if you were BUILDING during that time.

Operationally, they're fine. But their arena debt is going to be tough for the current regime to survive.

 

[Marv4Life]

especially a team that plays in NYC suburbs across the river in a different state, eclipsed by a global city which has twice the population the whole state of New Jersey has as a whole

Um. The state of NJ has 8,791,894 people. NYC has 8,175,133 people. Nice try though.
http://www.nytimes.com/2011/03/25/nyregion/25census.html
http://www.nj.com/news/index.ssf/2011/02/njs_population_grew_most_in_so.html
Typical folks who know absolutely nothing about the team, arena, location or state. What else is new.

 

[guyincognito]

You still have no idea what you're talking about, but you didn't address that.

That post was pretty all around brutal and I don't know if one sentence in it was factual.
Even the stuff you were using to put over the Devils was ridiculous. The easiest mark of fanbase is TV ratings and the Devils TV ratings in the NY market are typically around 40-50% of the Rangers ratings.... even in the Czechmates era.... or error. Either way.

 

[DumFries]

Um. The state of NJ has 8,791,894 people. NYC has 8,175,133 people. Nice try though.
http://www.nytimes.com/2011/03/25/nyregion/25census.html
http://www.nj.com/news/index.ssf/2011/02/njs_population_grew_most_in_so.html
Typical folks who know absolutely nothing about the team, arena, location or state. What else is new.

What I meant to say first of all, the urban area of NYC is roughly 18 000 000!!! Now, 22 000 000!!!!

 

[htpwn]

2003 was a long time. They've done nothing great since then.

What does fan support have to do with this story?

Someone is terribly spoiled...

The majority of teams would love to have 2003 as "a long time." A whole host of them would love to win something, period. Phoenix just wants to win a playoff round for once. Toronto and Florida just want to make the playoffs.

 

[guyincognito]

What I meant to say first of all, the urban area of NYC is roughly 18 000 000!!! Now, 22 000 000!!!!

And a good deal of NJ's 8M+ gets factored into that number.

Please stop. For the sake of our children and our children's children.

 

[DumFries]

What the hell are you talking about? You have a strong future in the field of hockey writing with that accuracy.

This isn't an operational problem (yet). It's an arena debt problem. They opened an arena in 2007. The lending process ate itself alive in 2008. The only worse case scenario would be if you were BUILDING during that time.

Operationally, they're fine. But their arena debt is going to be tough for the current regime to survive.

Good riddance then!!! I would love to see this team gone with their miserable trap system and their Kovy contract blunders. Give the Islanders, a real chance for once.

 

[guyincognito]

Good riddance then!!! I would love to see this team gone with their miserable trap system and their Kovy contract blunders. Give the Islanders, a real chance for once.

The same thing happened to Montreal. They'll survive. Drowning in arena debt is hardly a new phenomenon... nor is sucky posters wrecking business board threads and being allowed to for some unknown reason.

 

[Marv4Life]

Someone is terribly spoiled...

The majority of teams would love to have 2003 as "a long time." A whole host of them would love to win something, period. Phoenix just wants to win a playoff round for once. Toronto and Florida just want to make the playoffs.

We're spoiled, but we also don't put up with constant mediocrity like those teams you mentioned.

People act like the Devils are some great dynasty like the Lakers or Yankees winning 3 titles in a row with well-marketed superstars, hence we should fill up the arena every night even against lousy teams or poor draws. I wish we were a great dynasty, but right now we're not.

 

[Fugu]

Just a reminder that you guys are on the Business board. We don't tolerate the personal shots here AT ALL.


The topic is the Devils financial situation, not the other posters and what you think of them. Only warning.

 

[ILikeItVeryMuch*]

Good riddance then!!! I would love to see this team gone with their miserable trap system and their Kovy contract blunders. Give the Islanders, a real chance for once.

Don't know much about your franchise history do you Pierre?

The majority owner becoming a total owner and refinancing does not equal bankruptcy, the NY Post has been slandering the Devils for years, it was already debunked by Bill Daly, better luck next time.

Protip: The Devils bring in more revenue than 19 other teams in this league, but Forbes must be lying.

I remember Brodeur celebrating in the parking lot of their old arena upon their Cup victory in 2000, with some 500 fans.

They must have all gotten into the same picture. But that makes sense, 20,000 people at each cup finals game in Jersey, but 500 at the parade. You are missing about two zeroes.

MOD

 

[Fugu]

Don't know much about your franchise history do you Pierre?

The majority owner becoming a total owner and refinancing does not equal bankruptcy, the NY Post has been slandering the Devils for years, it was already debunked by Bill Daly, better luck next time.

Protip: The Devils bring in more revenue than 19 other teams in this league, but Forbes must be lying.

Ah come on, ILIVM. Daly? I may not buy all the details here, but there are some financial transition issues obviously--- for lack of a better word. Daly was part of the group that told us the Yotes sale was imminent and that the Thrashers weren't for sale. Look how that turned out.

 

[Fourier]

Ah come on, ILIVM. Daly? I may not buy all the details here, but there are some financial transition issues obviously--- for lack of a better word. Daly was part of the group that told us the Yotes sale was imminent and that the Thrashers weren't for sale. Look how that turned out.

You mean the Yote's sale wasn't imminent? The Thrashers were for sale??? Gee a guy stays away from this place for a decade or so and look at all you miss.

Really though I was shocked to see this. Hopefully it really is just a refinancing blip.

 

[ILikeItVeryMuch*]

Ah come on, ILIVM. Daly? I may not buy all the details here, but there are some financial transition issues obviously--- for lack of a better word. Daly was part of the group that told us the Yotes sale was imminent and that the Thrashers weren't for sale. Look how that turned out.

Well that means everything he says must be a lie.

I fail to see how the majority owner trying to become the principal owner and refinancing to meet the needs of a principal owner equals dire straits.

When has any financial changing of hands gone smoothly? The fact that these sheep on this forum scream relocation at the drop of a hat reminds me why I do not venture onto this forum much. Holy God.

The NY Post has been doing this for years, all the way back to the McMullen era.

 

[DumFries]

Don't know much about your franchise history do you Pierre?

The majority owner becoming a total owner and refinancing does not equal bankruptcy, the NY Post has been slandering the Devils for years, it was already debunked by Bill Daly, better luck next time.

Protip: The Devils bring in more revenue than 19 other teams in this league, but Forbes must be lying.

I agree with you, the Devils do bring more revenue than other franchises. However, last year they had a bad attendance record because of the performance on the ice. Therefore, I am not surprised at all that the team may have trouble repaying debt. The NBA season is almost close to getting jeopardized which will not help.

The thing is historic franchises like the Rangers, Habs and Maple Leafs will fill arenas even during tough times while the Devils don't have that solid fan support. Even Boston, an original six team, who won the Cup, had an average attendance record last year. So, this season all you Devils fans show your support.

 

[Fugu]

You mean the Yote's sale wasn't imminent? The Thrashers were for sale??? Gee a guy stays away from this place for a decade or so and look at all you miss.

Of course you understand that finding financing for sports teams isn't exactly easy right now. Vanderbeek may have things under control but it's clear that the arena debt may be an issue, and that he has to come up with a large chunk of money to buy out his partner. It'd be nice to avoid the extreme proclamation. It may not all be bad, but it doesn't sound all good either.

Well that means everything he says must be a lie.

I fail to see how the majority owner trying to become the principal owner and refinancing to meet the needs of a principal owner equals dire straits.

When has any financial changing of hands gone smoothly? The fact that these sheep on this forum scream relocation at the drop of a hat reminds me why I do not venture onto this forum much. Holy God.

The NY Post has been doing this for years, all the way back to the McMullen era.

No, it doesn't mean everything he says is a lie, but he's paid by these owners. He's hardly an objective observer in this matter, which is the point. Furthermore, it's easy to pull up two very recent dire straits with two teams and find Daly's assurances about those situations as well, if only to question his objectivity. Obviously, he and Bettman are very good at walking along a very thin line so that they don't actually lie. It's really about 'how' they say it.

The relocation comments are virtually mandatory at this point, mostly as a way to poke fun at the reactions, but you shouldn't take that kind of bait. It's a tangent that isn't necessary.


My position remains that the money market for sports team financing right now isn't what it was five or six years ago. NJD are not the only team facing these challenges, or having owners looking for new partners (Canes, Blues most recently, FL a couple years ago).

 

[knorthern knight]

It's always fascinating to look at very real scenarios where it is more profitable to charge higher prices and sell fewer seats than the alternative, but I'd still think that the profitability sweet spot lies somewhere in the higher ticket base/lower seat price ballpark. They really struggle to pack the building.

And don't forget that lower ticket prices and more fans will increase parking and concession revenues.

 

[Fourier]

Of course you understand that finding financing for sports teams isn't exactly easy right now. Vanderbeek may have things under control but it's clear that the arena debt may be an issue, and that he has to come up with a large chunk of money to buy out his partner. It'd be nice to avoid the extreme proclamation. It may not all be bad, but it doesn't sound all good either.

Of course. Financing anything of significance these days can be tricky. WE need to give this one some time to shake out. Perhaps the proverbial ''two weeks''.

BTW I have always been of the opinion that in most markets arenas are a good example of where public/private partnerships make sense. Both sides with skin in the game seems to be the way to go.

 

[blues10]

Certainly some unique marketing in NJ when you are marketing "two enforcers".

Who would want to take fighting out of the game when it is more important in your marketing plans than Kovalchuk, Parise or Brodeur? I assume one of the enforcers to be 35 year old Eric Boulton.

More than 1,800 NEW FANS have joined the Devils Army as Season Ticket Holders for the 2011-12 season! With a new head coach, two new enforcers, and a closer connection to the team, fans are jumping on board to be a part of something special!

http://devils.nhl.com/club/page.htm?id=67884

 

[knorthern knight]

Sometimes I wonder if part of the reason for the Devils' and Isles' struggles at the gate may be because three hockey teams in one metro area is just too many to be sustainable in the long term, even in a metro area as big as greater New York.

"New York Giants" and "Brooklyn Dodgers", anyone?

 

[Killion]

Vanderbeek may have things under control but it's clear that the arena debt may be an issue, and that he has to come up with a large chunk of money to buy out his partner.

Im sure he does, after all, he was a Sr.VP. at...... Lehman Brothers. And for a time, one of if not the highest paid executive's in North America.

But ya, good luck finding an Investment Banker. You need minimum 110% security & liquidity against almost any loan in the sports/entertainment sector these days, and based on the cash to debt ratio were looking at here he'd better be having his act beyond together.

 

[guyincognito]

Of course you understand that finding financing for sports teams isn't exactly easy right now. Vanderbeek may have things under control but it's clear that the arena debt may be an issue, and that he has to come up with a large chunk of money to buy out his partner. It'd be nice to avoid the extreme proclamation. It may not all be bad, but it doesn't sound all good either.



No, it doesn't mean everything he says is a lie, but he's paid by these owners. He's hardly an objective observer in this matter, which is the point. Furthermore, it's easy to pull up two very recent dire straits with two teams and find Daly's assurances about those situations as well, if only to question his objectivity. Obviously, he and Bettman are very good at walking along a very thin line so that they don't actually lie. It's really about 'how' they say it.

The relocation comments are virtually mandatory at this point, mostly as a way to poke fun at the reactions, but you shouldn't take that kind of bait. It's a tangent that isn't necessary.


My position remains that the money market for sports team financing right now isn't what it was five or six years ago. NJD are not the only team facing these challenges, or having owners looking for new partners (Canes, Blues most recently, FL a couple years ago).

Yep, that's the root of the problem. Their expense for the arena was in the $100M
ballpark... probably with some overages because it came in over budget, but some of that was city related improvements in the area.

Obviously there was probably a bit of rollover debt from when JVB bought the team from the Yankees (who probably absorbed the losses), but now that $100M is probably closer to $200M. Why would that be? 2008, obviously.

It's something you can kick down the road, and that they're operating normally (and not scrapping guys like Elias and Zubrus, who are at the end of the line or redundant, but still productive... to save themselves $9M cash) means they probably can kick it down the road, but that climate isn't going to get better. Hell, it looks like in the near term it's going to get worse.

JVB himself has some issues. In the Montreal situation, at least the value existed where if you ran from the debt, you could cash out. He might be looking at a situation where the purchase price he gets down the road essentially just kills the debt, and leaves very little takeout for him. If any.

This is where Moyes ended up where he ended up. I assume JVB is wealthier, but the potential to get wrecked is there. The primary difference is that the Devils debt is in the arena and the Coyotes debt was in operations.

 

[Wham City]

It's all up to Kovalchuk now.