Not this again... Devils in financial trouble?

[DevilChuk*]

You're (and a lot of others in this thread it seems) conflating immediate operational funding with long-term financial concerns. Two completely separate matters. Obviously if the Devils went from a high-spending team to a 2¢ above cap floor team that would likely be a circumstantial sign of a problem, but just because they can fund a hockey payroll close to cap certainly doesn't mean they don't have financial problems.

My only issue here is that if you are reportedly broke enough that you can't make a 3M loan payment, I don't think you go ahead and spend millions of dollars for the upcoming season including signing bonuses that are paid out immediately..

JVB is in trouble due to the debt but I think its pretty clear here that ownership (whoever that may be) are confident that they can handle the debt load without it becoming a major issue. If it was to be a major issue, I don't think you go ahead and spend this money right away.

Not to mention, all the stories about the NHL taking over and having to approve spending are absolutely ludicrous now. The NHL controls the Coyotes.. who had to have a HUGE day in free agency to get to the 7th lowest payroll in the NHL. We have the 7th highest payroll..

 

[guyincognito]

You're (and a lot of others in this thread it seems) conflating immediate operational funding with long-term financial concerns. Two completely separate matters. Obviously if the Devils went from a high-spending team to a 2¢ above cap floor team that would likely be a circumstantial sign of a problem, but just because they can fund a hockey payroll close to cap certainly doesn't mean they don't have financial problems.

Where did I say they don't have financial problems? I'm talking about the ******** rumors that have been put out for the last two years, they don't pan out.

They can't pay a restructuring loan that could put them into bankruptcy, they don't pay their players, they don't pay this guy, they don't pay that guy, the league has to give them money they're due, the league has to give them money they're not due, they're in stewardship, etc, it goes on and on.

But they're lugging around a potentially high $60Ms payroll. Makes perfect sense.

 

[guyincognito]

Basically, the constant stream of damaging reports against JVB and the sports team he owns. That come from two sources over and over again. There's a bit of political connection between the former and the later, I believe. Muck him up as much as possible because he can't sue. That would involve disclosure and he's not going to want to do that

 

[BenedictGomez]

My only issue here is that if you are reportedly broke enough that you can't make a 3M loan payment, I don't think you go ahead and spend millions of dollars for the upcoming season including signing bonuses that are paid out immediately..

I understand what you're saying, but regardless of how good or bad a hockey team is doing financially, it has to set aside substantial money for player salaries, and this funding is already factored. It's a good sign that the Devils will have a healthy payroll in 2013/14, but it's a small sign. What it means is that the Devils aren't completely crippled financially to the point where the annual ~$15M spread between league minimum and league maximum cant even be breached, but in terms of a financial sign, that's about all you can take from it really.

 

[DevilChuk*]

I understand what you're saying, but regardless of how good or bad a hockey team is doing financially, it has to set aside substantial money for player salaries, and this funding is already factored. It's a good sign that the Devils will have a healthy payroll in 2013/14, but it's a small sign. What it means is that the Devils aren't completely crippled financially to the point where the annual ~$15M spread between league minimum and league maximum cant even be breached, but in terms of a financial sign, that's about all you can take from it really.

I am far from taking it as a positive sign that life will be all good from here on out but it does, IMO, indicate that the story of a 3M loan payment that was missed just a few weeks ago is likely false.

If they were having problems hitting that number, they would've gone into the money set aside for hockey ops instead of risking defaulting and bankruptcy, I would think. If they anticipated more problems meeting loan payments in the near future, I would think they would remove enough allocated money from hockey ops to make sure they do meet each payment.

 

[CerebralGenesis]

I understand what you're saying, but regardless of how good or bad a hockey team is doing financially, it has to set aside substantial money for player salaries, and this funding is already factored. It's a good sign that the Devils will have a healthy payroll in 2013/14, but it's a small sign. What it means is that the Devils aren't completely crippled financially to the point where the annual ~$15M spread between league minimum and league maximum cant even be breached, but in terms of a financial sign, that's about all you can take from it really.

I'm glad that we are getting more optimistic or everyone is learning in this thread through this. yay education for all

Hopefully never, but just looking at the very data you posted:

Year 1: #1 in NHL in spending
Year 2: #12 in NHL in spending
Year 3: #17 in NHL in spending

The trend is clearly not good, and I was not aware that it was such a precipitous drop.

Admittedly, I dont like making studies when you only have 3 datapoints, because this could just be 100% coincidence and have absolutely nothing to do with the Devil's finances.

Or, it might.

And by the way, you didnt post the current upcoming year. Again, admittedly that's WAY incomplete because we're waiting on signings. But as it sits right now?

Year 4: #28 (out of 30) in NHL in spending

http://capgeek.com/payrolls/?charts_year=2013

 

[BenedictGomez]

I am far from taking it as a positive sign that life will be all good from here on out but it does, IMO, indicate that the story of a 3M loan payment that was missed just a few weeks ago is likely false.

If they were having problems hitting that number, they would've gone into the money set aside for hockey ops instead of risking defaulting and bankruptcy, I would think. If they anticipated more problems meeting loan payments in the near future, I would think they would remove enough allocated money from hockey ops to make sure they do meet each payment.

Well the missed loan was several months back, and if the NYP + Forbes reporting is to be believed, the NHL did once again advance the Devils money that they were supposed to be paid at a later date, with the obvious intention to help them in meeting short-term loan obligations. In other words, I dont think we can read too much into this other than the incremental positive that the Devils will at the very least be an average NHL spending team this season. They have about $7.2M in cap space right now, but they still have to sign Yayo and Henrique to sign, so I'm guessing that will take them to $4.5M in space.

 

[DevilChuk*]

Well the missed loan was several months back, and if the NYP + Forbes reporting is to be believed, the NHL did once again advance the Devils money that they were supposed to be paid at a later date, with the obvious intention to help them in meeting short-term loan obligations. In other words, I dont think we can read too much into this other than the incremental positive that the Devils will at the very least be an average NHL spending team this season. They have about $7.2M in cap space right now, but they still have to sign Yayo and Henrique to sign, so I'm guessing that will take them to $4.5M in space.

Not sure why you're using cap space to evaluate spending..

Also, the missed loan payment was in April.. so yea I guess they could have magically made millions between now and then.

As a sizable creditor to the Devils, the NHL must now approve any major financial moves the team makes. “I’m amazed at how far the NHL has gone out on a financial limb,†a second source close to the situation said.

I don't think this is true, either. Again, look at the spending of a club we KNOW is watched over by the NHL.

The team is looking to raise as much as $20 million by selling a minority stake and NHL Commissioner Gary Bettman, who is smack dab in the middle of the league’s marquee event, the Stanley Cup Finals, must dedicate some energy to help accomplish that goal, sources said.

Let's wait and see how much money will be paid out in immediate signing bonuses but we know they have funding set aside for hockey ops.. don't you think if they needed to raise $20M or risk bankruptcy, they would have just tapped somewhat into the hockey ops budget? This was also only a few weeks ago (during the SCF).

It just doesn't all add up. We know they are in debt and have restructured but the reported missed loan payments, etc. don't really mesh with a team that is spending excessively in the span of 5 days.

 

[MartyOwns]

call MICHAEL RYDER! 877-CASH NOW!

call RYAN CLOWE! 877-CASH-NOW!!

ok back to work

 

[Feed Me A Stray Cat]

I understand what you're saying, but regardless of how good or bad a hockey team is doing financially, it has to set aside substantial money for player salaries, and this funding is already factored. It's a good sign that the Devils will have a healthy payroll in 2013/14, but it's a small sign. What it means is that the Devils aren't completely crippled financially to the point where the annual ~$15M spread between league minimum and league maximum cant even be breached, but in terms of a financial sign, that's about all you can take from it really.

As far as I know, the team is doing fine financially. We have pretty healthy revenues.

This is all the result of our owner's financial issues, as well as the fact that we received financing for our arena in an era of very high leverage.

 

[Cowbell232]

The Devils hockey team is probably pretty close to self-sufficient at this point in their life cycle.

I'd think that the arena debt coupled with Brick City Holdings bailing is really the problem and it's easier/better to have JVB out at this point.

The hockey team and the arena - although linked through ownership, etc. - are really different animals altogether.

 

[BenedictGomez]

As far as I know, the team is doing fine financially. We have pretty healthy revenues.

Not really.

The team's revenue is in the top-10 or so in the NHL, but it doesn't make much money.

 

[MartyOwns]

Not really.

The team's revenue is in the top-10 or so in the NHL, but it doesn't make much money.

lets say we dont move as a result of your opinion (which we obviously wont). would you still care? i mean, you dont think relocation is an upcoming issue do you?

 

[Cowbell232]

Not really.

The team's revenue is in the top-10 or so in the NHL, but it doesn't make much money.

In a sports team, breaking even is more than you can ask for IMO.

 

[None Shall Pass]

In a sports team, breaking even is more than you can ask for IMO.

With the MLB and NFL, those teams should be pulling in profits, especially with all the crazy media deals and revenue sharing.

With an NHL team, breaking even puts you among the top earners.

 

[glenwo2]

Not really.

The team's revenue is in the top-10 or so in the NHL, but it doesn't make much money.

How's that possible?

 

[Scott04]

How's that possible?

Sports teams generally don't turn much profit. Expenses for an organization go well beyond player payroll.

 

[Colin226]

Right but what helps make the Devils an attractive franchise to own is that they can piggyback off of the almighty NY/NJ market to get things like huge TV deals (with 3 local sports networks bidding), a very wealthy area relative to the rest of North America (great for attracting sponsors and corp. tix buyers with deeper pockets), and a very densely populated area. NYC is the financial capital of the world, so there is little risk of this area losing its population and/or wealth (and if we go down, everyone comes with us).

The Devils have established themselves and grown a fan base that, while a majority are still very young, can sustain itself going forward. Just look at how we are consistently top 10 of the 22 US teams in average viewers per game, and how our STH base has exploded with the biggest gains coming after that awful 2010 - 2011 season. With the winning tradition we've built here, the NHL definitely doesn't want to see the Devils move.

 

[Devils Dominion]

Right but what helps make the Devils an attractive franchise to own is that they can piggyback off of the almighty NY/NJ market to get things like huge TV deals (with 3 local sports networks bidding), a very wealthy area relative to the rest of North America (great for attracting sponsors and corp. tix buyers with deeper pockets), and a very densely populated area. NYC is the financial capital of the world, so there is little risk of this area losing its population and/or wealth (and if we go down, everyone comes with us).

The Devils have established themselves and grown a fan base that, while a majority are still very young, can sustain itself going forward. Just look at how we are consistently top 10 of the 22 US teams in average viewers per game, and how our STH base has exploded with the biggest gains coming after that awful 2010 - 2011 season. With the winning tradition we've built here, the NHL definitely doesn't want to see the Devils move.

I think our fanbase is willing to turn a blind eye to last season's debacle too (since it was a hectic short season), as long as we see a good product this October/November and beyond.

I truly think another deep playoff run will do wonders for the season ticket base the following season, where we can average over 17k per game through 41 games.

 

[BenedictGomez]

How's that possible?

Because you have to look at the entire financial picture, not just how much revenue they're bringing in.

The Devils operational expenses and financing expenses are very large. They typically make a bit of money, but frankly when your debt to equity ratio is over 100%, that slight gain is almost inconsequential.

To put it in layman's terms with a real world example, the San Jose Sharks lost $1M dollars last season, and the Devils made about $2M dollars last season. But if I had to buy 101 hockey teams, I'd buy 100 teams of San Jose Sharks before I bought one New Jersey Devils. The Sharks bring in much less revenue than the Devils, but they have zero debt and about a $100M top-line. Financially you can work with that much easier than you can work with what the Devils are currently facing.

I truly think another deep playoff run will do wonders for the season ticket base the following season, where we can average over 17k per game through 41 games.

That's pretty much been the history with this team, big jumps in STH with success. I imagine that transcends all sports. Averaging >17k for an entire season is a lot though, about 96.5%, I'm not sure that's realistic with the current pricing structure of the building.

 

[Mory Schneideur*]

Posted this in the Kovy thread and def think it has a place here:

Interview with Kovy's mom. She mentions one of the reasons Kovy left was due to instability of ownership change that is pending. I didn't want to believe it but there it is.

http://sports.yahoo.com/blogs/nhl-p...es-led-son-civilized-departure-132650998.html

 

[Richer's Ghost]

Kovy's mom knows what exactly? It's opinion and excuses to cover up the "money grab". Ironic really that the deal that emptied* the team coffers ends up quoting financial reasons for leaving.

*would have starting next year anyways.

 

[Mory Schneideur*]

Kovy's mom knows what exactly? It's opinion and excuses to cover up the "money grab". Ironic really that the deal that emptied* the team coffers ends up quoting financial reasons for leaving.

*would have starting next year anyways.

Don't dismiss it so fast. Apparently he consulted with her when making the decision. His own statement mentioned family as his reason for leaving.

This interview is honestly the most info we've gotten besides the entire media world and nothing but speculation. If he ends up in the KHL due to a "money grab" it would make sense why he would do what he did if he believed ownership and financial issues were looming with the organization.

I don't agree with what he did & momma said but it makes sense.

 

[apice3*]

I don't buy that at all. 17 was still entitled to his 100M no matter who the owner is.

 

[Mory Schneideur*]

I don't buy that at all. 17 was still entitled to his 100M no matter who the owner is.

Just speculating here but...

New owner could mean lots of things. Wanting to cut salary and trade Kovy away, there goes the 15 year instability. Team becomes a tanker for the next 10 years as we collect draft picks. Next CBA includes rollbacks again (owner could be very supportive). New Owner might be a jerk, might not fulfill promises made when Kovy signed originally. Kovy could get bought out, compliance.

I could see what him & momma mean, it's def just as uncertain as if your company was bought out by a new owner. Will you lose your job, relocate, will he be cheap, will he be a jerk, will he fire a bunch of employees or what he sees as deadwood.

Just sayin.