Not this again... Devils in financial trouble?

[Devils86]

Their operations have never matched the stories. The end.

You'd think people would learn after the same song and dance happened last season, but I guess we'll probably have to go for three tries for people to get it. That's two years in a row where they've been borderline liquidated to the league and then they go out firing money on old "junk", what you would consider luxury items in alot of cases.

I'm sure Kosman will crawl out of his rock sometime in the late summer to set up next springs batch of stories.

He also said sodastream was also in trouble..you should invest!

 

[guyincognito]

He also said sodastream was also in trouble..you should invest!

No, I understand they have financial difficulties, but it has NOTHING TO DO WITH OPERATIONS. There has been a mountain of evidence over the last couple of years having to do with transactions, but people just absolutely refuse to account for it. Now, I can understand a business writer who does not understand hockey and has no idea what the moves mean, but for hockey fans to not get it, I don't understand.

They have never acted like a doomed team financially and we're two years into it at this point. Hell, they're making moves and signing contracts designed to potentially put themselves over the cap *without* Kovalchuk.

 

[DevilChuk*]

http://prohockeytalk.nbcsports.com/2013/06/17/report-devils-at-risk-of-defaulting-on-loan/
http://www.examiner.com/article/rep...ayment-but-could-be-near-new-refinancing-deal

previous missed payment
http://dailyme.com/story/2013062000001346/new-jersey-devils-being-crushed-by-230-million-of-debt

http://blogs.bettor.com/Jeff-Vander...eeds-20-million-to-avoid-loss-of-team-a178967

1st link: quotes the Post
2nd link: quotes the Post
3rd link: quotes the Post
4th link: quotes the Post

Yea, that doesn't really prove anything.. they are ALL just piggybacking on the Post..

That's like showing the guy at the DMV a copy of your passport and trying to convince him it should account for another few points towards your license on top of your actual passport. No dice.

Sounds like a guy swimming in cash....If the post said the sky was blue you;d argue it was green. All you have to do is look at the past few years to see hes has some deep financial issues.

You can have the last word but I give you credit for going down withe the JVB ship and drinking the koolaid to the last moment

Amazing how even after I point out that I do think the Devils have always been a problem, you continue to believe I am saying the exact opposite. Makes no sense to keep posting since you just read what you want to hear as opposed to what's actually being said.

For the last time, it's been blatantly obvious that JVB has had problems with this team. Those are facts. What I don't agree with are some of the Posts' claims.. some of which have long been disproven (i.e. they filed for bankruptcy last year), supporting my position.

I also like how you go from agreeing that JVB himself may not have financial issues (below) to saying he has deep financial issues. Which one is it?

I would agree with this..probably better said than I put it

Or.. exactly how I put it..

You really don't read my posts, do you?

And if you can't understand that JVB himself may not be broke, I'm not sure what to do. Do you think the guy put his entire life savings into the team? More likely, he set aside X funds for the Devils and has now tapped out those funds and does not want to tap into other funds. As in, he may very well have the money but doesn't want to spend it.

JVB is not broke. He most likely set aside a certain budget he is willing to put into the team and the team is going way over what he wants.

If anyone put their entire savings into any team, they are pretty dumb. Way to big of a risk

 

[BenedictGomez]

No, I understand they have financial difficulties, but it has NOTHING TO DO WITH OPERATIONS. ...............................They have never acted like a doomed team financially and we're two years into it at this point. Hell, they're making moves and signing contracts designed to potentially put themselves over the cap.........

It's because you're doing the same thing that a lot of people are doing in this thread - you're assuming that just because the Devils have a healthy payroll, that the going concern of the franchise is 100% fine. You're equating short-term liabilities currently being met as evidence that the long-term liabilities are able to be met. Cant do that.

I've previously explained why it's quite possible that the Devils could have missed a $3M loan payment three or four months ago, and yet be spending millions on salary today, so I'm not gonna' do that again. But just because a business is spending money and "buying stuff" doesnt mean that it's long-term health is secure today. K-Mart can buy millions of dollars in Martha Stewart trinkets and other merchandise to fill its' shelves, and pay its' employees salaries (an expense previously forecast on its' books), and pay all its' other expenses, and then declare bankruptcy tomorrow. Delta can maintain all its' routes, and pay all employee salaries, and buy millions of dollars in jet fuel, and even spend more to expand domestic or international gates, and then declare bankruptcy tomorrow.

The point is, just because the Devils are spending and are going to roll with a $62M payroll instead of a $52M payroll isnt "proof" that everything's fine long-term, and many (if not most) people in this thread are making this mistake. The reverse, however, would be better circumstantial evidence for something possibly being wrong - if a $62M team all of a sudden drastically altered its' behaviour and became a $45M near-floor team, that could be a bad sign of something changing with its' financial health.

 

[DevilChuk*]

I've previously explained why it's quite possible that the Devils could have missed a $3M loan payment three or four months ago, and yet be spending millions on salary today, so I'm not gonna' do that again. But just because a business is spending money and "buying stuff" doesnt mean that it's long-term health is secure today. K-Mart can buy millions of dollars in Martha Stewart trinkets and other merchandise to fill its' shelves, and pay its' employees salaries (an expense previously forecast on its' books), and pay all its' other expenses, and then declare bankruptcy tomorrow. Delta can maintain all its' routes, and pay all employee salaries, and buy millions of dollars in jet fuel, and even spend more to expand domestic or international gates, and then declare bankruptcy tomorrow.

I agree with pretty much your entire post but this part. If you can point me to that post, it would be much obliged.

I don't take the increase in payroll as a sign things are all dandy but to me, it makes the claim of missing a 3M loan payment dubious. We both wrote in the past about how hockey budgets are predetermined and can be unaffected by other financial problem.. but I just don't think JVB and co. would risk defaulting the team by missing the payment just to keep the hockey budget at projections. I think they'd sooner lower that number by 3M.

 

[guyincognito]

It's because you're doing the same thing that a lot of people are doing in this thread - you're assuming that just because the Devils have a healthy payroll, that the going concern of the franchise is 100% fine. You're equating short-term liabilities currently being met as evidence that the long-term liabilities are able to be met. Cant do that.

I've previously explained why it's quite possible that the Devils could have missed a $3M loan payment three or four months ago, and yet be spending millions on salary today, so I'm not gonna' do that again. But just because a business is spending money and "buying stuff" doesnt mean that it's long-term health is secure today. K-Mart can buy millions of dollars in Martha Stewart trinkets and other merchandise to fill its' shelves, and pay its' employees salaries (an expense previously forecast on its' books), and pay all its' other expenses, and then declare bankruptcy tomorrow. Delta can maintain all its' routes, and pay all employee salaries, and buy millions of dollars in jet fuel, and even spend more to expand domestic or international gates, and then declare bankruptcy tomorrow.

The point is, just because the Devils are spending and are going to roll with a $62M payroll instead of a $52M payroll isnt "proof" that everything's fine long-term, and many (if not most) people in this thread are making this mistake. The reverse, however, would be better circumstantial evidence for something possibly being wrong - if a $62M team all of a sudden drastically altered its' behaviour and became a $45M near-floor team, that could be a bad sign of something changing with its' financial health.

The league is a cooperative. You don't miss payments and then get to throw money around. This is how you end up in stewardship. You don't defer payments yet throw money around, because players won't sign with you. That PA statement was likely garbage. It's kind of funny that someone can quote a piece of paper they have, yet not be able to produce it.

They have missed more payments than I can count, they've gone bankrupt on a couple occasions, they've been taken over by the league at least once, and above that, they don't pay their freaking players on time.

Yet, here we are two years later and there's been no fundamental change in their operations. Eventually, you just have to come to the conclusion that the secondary reporting (primary reporting is that they have debt and another debtload maturing in 2014) is pure ********.

So I've never said they don't have a long-term problem, just that the "short-term" stuff being reported is GARBAGE and nothing that's actually happening corroborates it, nor has anything that's happened in the recent past.

 

[Devils Dominion]

I've found through the years that paying too much to the business side can spoil the fun of being a hockey fan.

 

[manisback121]

I just love how people equate real estate operations with hockey operations.

If operations were the issue then we would have seen a stewardship a long time ago. However, the real issue is a very large building in a highly specialized area to manage which is why we haven't seen anyone swoop in.

Let's use logic, if Im a banker and operations were the entity, I would step in to repo a NYC metropolitan area hockey team whose tv contract alone is worth a ton.

However, if it's a facility, I have done my homework and realized how quickly someone can **** it up (see Phoenix), not to mention have it drop from 8th to god knows where on gross revenue.


Operations are fine...

 

[indfin]

First of all, no-one buys sports teams to make money. Billionaire sees opportunity to buy a team for pennies on the dollar, they take it.. this is a luxury purchase, not a business one./QUOTE]

Wait - which is it? A billionaire looking to buy a team for "pennies on the dollar" sounds exactly like a business purchase, not a luxury one

 

[Richer's Ghost]

First of all, no-one buys sports teams to make money. Billionaire sees opportunity to buy a team for pennies on the dollar, they take it.. this is a luxury purchase, not a business one.

Wait - which is it? A billionaire looking to buy a team for "pennies on the dollar" sounds exactly like a business purchase, not a luxury one

It's all relative to what you're buying. There are better buys than others even when buying a luxury item.

JVB may very well be in a losing scenario with it costing him more in financing now than originally planned to the point he taking on more than he can ever realize back. Good time to sell and buyers looking for new financing can come in clean without the economic disaster unfolding under their feet like happened when the Prudential Center construction was just completed. I get the feeling JVB is upside down on the house and realizing it won't appreciate enough or fast enough to get him back positive so he's gonna sell and take the loss (and write-off no doubt) instead. The new owner will probably not be getting it for actual pennies on the dollar, but far more favorable financing depending on their own personal "budget" for a sports franchise.

 

[CerebralGenesis]

The league is a cooperative. You don't miss payments and then get to throw money around. This is how you end up in stewardship. You don't defer payments yet throw money around, because players won't sign with you. That PA statement was likely garbage. It's kind of funny that someone can quote a piece of paper they have, yet not be able to produce it.

They have missed more payments than I can count, they've gone bankrupt on a couple occasions, they've been taken over by the league at least once, and above that, they don't pay their freaking players on time.

Yet, here we are two years later and there's been no fundamental change in their operations. Eventually, you just have to come to the conclusion that the secondary reporting (primary reporting is that they have debt and another debtload maturing in 2014) is pure ********.

So I've never said they don't have a long-term problem, just that the "short-term" stuff being reported is GARBAGE and nothing that's actually happening corroborates it, nor has anything that's happened in the recent past.

Best part is when he said that our current spending is going down indicating looming disaster only for that to not happen and how no one understands how operational spending has no impact.

This is a TV sitcom at this point.

 

[DevilChuk*]

First of all, no-one buys sports teams to make money. Billionaire sees opportunity to buy a team for pennies on the dollar, they take it.. this is a luxury purchase, not a business one.

Wait - which is it? A billionaire looking to buy a team for "pennies on the dollar" sounds exactly like a business purchase, not a luxury one

It may be a wise purchase, but my point was that no-one is buying the Devils to start making big money from it. They're buying a sports team simply to own a sports team. The fact that its cheaper just makes one interested.

 

[indfin]

It may be a wise purchase, but my point was that no-one is buying the Devils to start making big money from it. They're buying a sports team simply to own a sports team. The fact that its cheaper just makes one interested.

ok ... that part I completely agree with.

 

[Scott04]

Wait - which is it? A billionaire looking to buy a team for "pennies on the dollar" sounds exactly like a business purchase, not a luxury one

It's a luxury purchase until the owner realizes any gain or loss on their purchase by way of selling it. The business purchase is buying it at X price and selling it years later when its more valuable. That's the business purchase. The act of buying and operating it... its essentially a luxury toy at that point.

 

[Devils Trap]

http://devils.nhl.com/club/podcastplayer.htm?pid=476&iid=43370

Here is the interview with Lou where it says ownership change is "imminent"

Around 4:45 It begins

 

[NJDevs26]

That's actually a real good interview with Lou

'We feel Schnieder's a top five goalie in the league'

 

[BenedictGomez]

You don't miss payments and then get to throw money around. This is how you end up in stewardship. You don't defer payments yet throw money around, because players won't sign with you.

Here's the problem with all of this. I have no idea (nor does anyone else not connected with the team and its' finances) what types or how many lines of revolving credit agreements the Devils have set up with their various financiers, or how many or what the terms are on individual lines of credit for different segments of the business.

Maybe I didnt explain this clearly enough, so I'll try again. It's possible that the set up for any current salary requirements for the organization is solid, including spending to the cap and paying janitors to mop the floors, BUT the financing for any realistic means to get out from under "debt hell", keeping in mind how little money the Devils make, which is what's really critical for the sale of the team, is completely and totally FUBAR'd.

I've found through the years that paying too much to the business side can spoil the fun of being a hockey fan.

I love finance, and I love hockey, and I enjoy following businesses, so to me the intersection is very interesting. Doesnt spoil any fun for me in the least bit.

 

[Devilswede]

http://devils.nhl.com/club/podcastplayer.htm?pid=476&iid=43370

Here is the interview with Lou where it says ownership change is "imminent"

Around 4:45 It begins

The link doesn't work.

 

[Bleedred]

I'm not sure if it was archived anywhere, but he definitely did say something implying ownership change was imminent. I caught most of the interview.

 

[Devils Trap]

The link doesn't work.

Worked for me

 

[ScottyK]

The link doesn't work.

works for me

 

[Richer's Ghost]

Shouldn't we really call it JVB's financial troubles more than the Devil's financial troubles at this point?

 

[MartysBetterThanYou]

I have a feeling a condition of this new majority owner coming in might be paying off outright a percentage of the team's debt in order to lessen the load and make the team's business model financially viable again.

 

[glenwo2]

Shouldn't we really call it JVB's financial troubles more than the Devil's financial troubles at this point?

No because if we do, then nobody will really care anymore.

 

[MartyOwns]

if nothing else, can we all at least agree to stop using the phrase 'pennies on the dollar'?

"BenidictGomezVille"