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

[guyincognito]

I would assume that they know a ton more than you.. Do you work in the finance department? Do you know anyone who works for the team in an upper management role? I've read your posts and you infer a lot based off the few things said in articles and the things you see them spend money on, and then make inferences based off of that limited knowledge.. They wasted money? You see them spend it on things but you have no idea about their finances or the reasoning behind expenses

You're the guy who thinks Chambers is a philanthropist. There's this thing, called logic. I don't mean to be mean, but if you're going to call me out, I'm going to call you out.

They waste alot of money. Do you think the truck is a good purchase? You know, the one of the marketing campaign they dumped? Is having meet and greets at Morton's and covering the check, a good idea?

They carried a high $60sM payroll last season, etc...

Obviously their total finances aren't very good. Otherwise they wouldn't be having one negative value sale now (if this is true and they get refinanced), and most likely another negative value sale in the next couple of years, likely coupled with bankruptcy protection.

 

[Colin226]

You're the guy who thinks Chambers is a philanthropist. There's this thing, called logic. I don't mean to be mean, but if you're going to call me out, I'm going to call you out.

They waste alot of money. Do you think the truck is a good purchase? You know, the one of the marketing campaign they dumped? Is having meet and greets at Morton's and covering the check, a good idea?

They carried a high $60sM payroll last season, etc...

Obviously their total finances aren't very good. Otherwise they wouldn't be having one negative value sale now (if this is true and they get refinanced), and most likely another negative value sale in the next couple of years, likely coupled with bankruptcy protection.

Ok read this article just put out from the Star Ledger and tell me that's not spot on with my theory about what is going on: http://www.nj.com/devils/index.ssf/2011/09/devils_co-owner_seeks_to_relin.html?utm_medium=twitter&utm_source=twitterfeed

Either way, you're literally bringing up minor things that scratch the surface of the kind of expenses that a team paying $60 million to players alone (forget about arena costs!) are paying for.. That truck wasn't more than $30,000.. Kovy makes that in the first period..

Meet and Greet expenses? Think about you.. You have to be spending at least $1000 to get the very cheapest season tickets.. That BBQ couldn't have cost more than $20 per person, and in some cases it gets people to consider season tickets over going to StubHub.. If you had to pay $20 for someone to give you $1000, would you do it?

You know so little of the expenses and only use the examples you can see, yet you make these doomsday claims like you've seen a balance sheet.. It just gets everyone in a panic.. So there you have a credible paper writing something in line with what I was saying

 

[guyincognito]

“(Chambers) is not really paying Jeff to get out,” the source said. “He’s paying off a note to get away and let Jeff take on the refinancing.”

Yeah, a retread article that has this whopper of a quote in it is great for whatever it is what your theory is.

Go back and look why Chambers "uncloaked" and wanted out.

 

[Colin226]

Yeah, a retread article that has this whopper of a quote in it is great for whatever it is what your theory is.

Go back and look why Chambers "uncloaked" and wanted out.

Your quote adds to my point.. Chambers has 2 options - he can either wait for a buyer and continue to pay off the team's debt ($100+ mil in the next few years), or he can pay $23 million now and get out before having to pay the $100 million.. Jeff, by agreeing to this, seems to think he will be able to handle this himself so we have nothing to worry about there (if he's confident with his money situation, then I'm fine too)

Chambers just wants to go invest in the city on a new project, now that he got the Devils there (which was his old project and reason for buying his 47%)

 

[guyincognito]

No one even knew Chambers owned part of the team (his son in law was the front guy), until by reports, he got pissed off about HOW MUCH MONEY THE FRANCHISE WAS SPENDING. Seriously, go read the articles.

He's not a philantrophist, he's a pump and dumper. He bought (well, supposedly he bought, that situation is a mess in itself and it makes you wonder what the league is doing with ownership, that a listed owner actually *isn't* an owner) his share of the team in order to flip it in the future and turn a profit. The Devils were bought by them out of holding from the Yankees for less money than the Yankees purchased them for.

The arena, the Devils kicked in 1/3rd of the money and get pretty much total reign over the place, only having to kick in a lame $1M or so rent, which they don't even pay.

It was a dream scenario to turn a big 'ol profit and then sell. But then 2008 happened and they got buried.

It's pretty simple actually. His goal was to help himself, and then maybe help Newark in the process. He's a glorified house flipper. If this was on the level he wouldn't have needed a front guy to represent himself as an owner. This is one of the guys in YankeesNets that Dr. McMullen LAMENTED selling to afterwards.

 

[Colin226]

No one even knew Chambers owned part of the team (his son in law was the front guy), until by reports, he got pissed off about HOW MUCH MONEY THE FRANCHISE WAS SPENDING. Seriously, go read the articles.

He's not a philantrophist, he's a pump and dumper. He bought (well, supposedly he bought, that situation is a mess in itself and it makes you wonder what the league is doing with ownership, that a listed owner actually *isn't* an owner) his share of the team in order to flip it in the future and turn a profit. The Devils were bought by them out of holding from the Yankees for less money than the Yankees purchased them for.

The arena, the Devils kicked in 1/3rd of the money and get pretty much total reign over the place, only having to kick in a lame $1M or so rent, which they don't even pay.

It was a dream scenario to turn a big 'ol profit and then sell. But then 2008 happened and they got buried.

It's pretty simple actually. His goal was to help himself, and then maybe help Newark in the process. He's a glorified house flipper. If this was on the level he wouldn't have needed a front guy to represent himself as an owner. This is one of the guys in YankeesNets that Dr. McMullen LAMENTED selling to afterwards.

He's a billionaire who let his son in law manage an investmen for him.. That's not uncommon.. I completely disagree with you on Chambers intentions.. (from the article)

Chambers’ interest in the Devils, according to some in the organization, has been more about the development of Newark than profiteering.

He was also born in Newark and went to college there at Rutgers, so he has a deeper connection with the city having already worked on several projects aimed at improving Newark.. Bringing the team to the city was a project to help Newark, not to pump and dump a hockey team.. You make it seem like helping Newark was an afterthought for him, when any amount of research would suggest otherwise..

But really either way, why would Jeff be agreeing to take on nearly double the debt if he has no way of handling it? Seems rather foolish for a man with a resume like his.. So if Jeff is secure with this, then why shouldn't we be?

 

[guyincognito]

He's a billionaire who let his son in law manage an invest for him.. That's not uncommon.. I completely disagree with you on Chambers intentions.. (from the article)

But either way, why would Jeff be agreeing to take on nearly double the debt if he has no way of handling it? Seems rather foolish for a man with a resume like his.. So if Jeff is secure with this, then why shouldn't we be?

It's not common to have someone listed as an owner who *isn't actually an owner*.

That's pretty much a bombshell, maybe not as bad as "Boots is a crook" or "****, you mean Spano doesn't have the money?".... but still.

As for JVB, what choice does he have? He has to take the mountain of debt and pray. It's going to be tough to find an outside investor until they go under. What clown is going to pay a ton of money for a non-controlling interest, when all their money goes into is debt service?

The non-controlling interest basically just went for negative money. 9 figures negative money.

edit: again, if this is true. they haven't exactly denied this, though.

 

[uhlaw97]

Two tweets by James Mirtle after he posted the same article.

mirtle James Mirtle
If the Devils are going up for sale, it's not a great time with Phoenix, St. Louis and Dallas continuing their long searches for owners.


mirtle James Mirtle
And it's proof, once again, that it's not just the sunbelt teams that struggle. Islanders, Blue Jackets, Devils all in tough right now.

If only ONE of those "struggling" teams would move to Houston, America's 4th largest city!

Les Alexander needs to pony up the money!

 

[Colin226]

It's not common to have someone listed as an owner who *isn't actually an owner*.

That's pretty much a bombshell, maybe not as bad as "Boots is a crook" or "****, you mean Spano doesn't have the money?".... but still.

As for JVB, what choice does he have? He has to take the mountain of debt and pray. It's going to be tough to find an outside investor until they go under. What clown is going to pay a ton of money for a non-controlling interest, when all their money goes into is debt service?

The non-controlling interest basically just went for negative money. 9 figures negative money.

edit: again, if this is true. they haven't exactly denied this, though.

Gilfillan was simply managing his father-in-laws asset.. Chambers is a multi-billionaire so I'm sure he has other investments to look after.. He can't manage them himself all at once, and Mike was a former Devils STH so it made a lot of sense.. Donald Trump has his kids manage some of his properties and things.. It really is nothing to be concerned about

If Jeff couldn't handle this $100+ million of debt he is willingly taking on (in addition to the $120+ he already owed), then he wouldn't have taken it on.. He would have told Chambers to keep looking for a buyer, and to pay the debt in the meantime.. He did not have to accept this deal, therefore he must have a reason for doing it.. The guy is simply not going to take on a level of debt that would destroy everything he worked for

I think this is just one of those things that we need to see played out because of the limited knowledge we have of the situation.. Agree to disagree until we see what happens lol, but great debate!!

 

[knorthern knight]

If only ONE of those "struggling" teams would move to Houston, America's 4th largest city!

Les Alexander needs to pony up the money!

That ship has sailed...

• Les Alexander is now 68, not as bad as Ralph Wilson of the Buffalo Bills (92), but still rather old to be starting a new franchise (even a re-located one)
• Between his divorce, and the great recession, Les Alexander is no longer a billionaire. He still has multi-millions to his name, but he may not have enough loose change to buy a team and withstand several years of bad losses.

 

[njdevil26]

http://sports.yahoo.com/nhl/blog/pu...ebt-reports-say-Devils-are-ba?urn=nhl-wp16667

Here we go again.

 

[Hunter Gathers]

Eesh.

 

[kdb209]

http://sports.yahoo.com/nhl/blog/pu...ebt-reports-say-Devils-are-ba?urn=nhl-wp16667

Here we go again.

Direct links to the Forbes & G&M pieces which were behind the Puck Daddy post:

http://www.forbes.com/sites/mikeozanian/2011/11/04/new-jersey-devils-appear-headed-for-bankruptcy/
http://www.theglobeandmail.com/sports/hockey/devils-bankers-look-to-escape-debt/article2224949/

 

[edog37]

playing the what-if card, if the Debbies were purchased & moved, that would throw a huge monkey wrench into the upcoming realignment....

 

[Grudy0]

playing the what-if card, if the Debbies were purchased & moved, that would throw a huge monkey wrench into the upcoming realignment....

Devils aren't going anywhere. They have full operation of the arena. The question becomes what happens if they don't have full operation of the arena due to a bankruptcy filing.

 

[htpwn]

http://sports.yahoo.com/nhl/blog/pu...ebt-reports-say-Devils-are-ba?urn=nhl-wp16667

Here we go again.

Where there's smoke, there's fire.

 

[nhlfan79]

Devils come down to Georgia. Charlie Daniels and Ilya Kovalchuk are happy.

Just kidding.

 

[BeastoftheEast85]

I am not worried about relocation because revenue is not the major problem (It could be better but we have been top 10 in the for while and are still around there). It is high debt payments and an expensive roster. My concern would be on resigning Parise and having to operate like a low-budget team.

 

[Hunter Gathers]

Highly doubt the Devils move. They will certainly have money struggles if they are forced through bankruptcy, though. Couple that with below average attendance and it's not a pretty picture.

 

[MAROONSRoad]

I am not worried about relocation because revenue is not the major problem (It could be better but we have been top 10 in the for while and are still around there). It is high debt payments and an expensive roster. My concern would be on resigning Parise and having to operate like a low-budget team.

source?

 

[Fugu]

http://www.theglobeandmail.com/sports/hockey/devils-bankers-look-to-escape-debt/article2224949/

Before the archives wipe this from existence:

As is the case with most loans that size, the original banker, CIT Investment Banking Services, parcelled off chunks of the deal with other lenders. Some of those lenders decided they have little chance of recovering their money and put their shares of the loan up for sale.
The asking price is 75 cents on the dollar, according to a person familiar with the pricing. It’s not clear just how much of the Devils’ outstanding debt is for sale, or who is selling. The bid price stands at 65 cents, meaning the buyers and sellers are far apart.
At that price, the distressed loan is in what the person referred to as “loan-to-own territory.†That means that buyers wouldn’t be purchasing the loan with any serious hope of being repaid, and instead would be trying to get first in line to own the team in a restructuring that handed over the team to creditors.

http://www.forbes.com/sites/mikeozanian/2011/11/04/new-jersey-devils-appear-headed-for-bankruptcy/

From working on our NHL team valuations, which will go live on Forbes.com Nov. 30, I can tell you the Devils have over $250 million of debt piled on the team and arena, which they control. The debt is growing because Vanderbeek, unable to make interest payments, is capitalizing the interest. If this all sounds familiar it is because it should. This is what Hicks Sports Group went through when its $525 million of debt, stacked on baseball’s Texas Rangers and hockey’s Dallas Stars, grew to $600 million because HSG owner Tom Hicks could not make interest payments, ultimately defaulting.

...

Vanderbeek already missed a $100 million principal payment that was due Sept. 1

 

[Xander Crews]

I am not worried about relocation because revenue is not the major problem (It could be better but we have been top 10 in the for while and are still around there). It is high debt payments and an expensive roster. My concern would be on resigning Parise and having to operate like a low-budget team.

Uhhhh what? I find that impossible to believe. Where did you hear it?

 

[danishh]

source?

Uhhhh what? I find that impossible to believe. Where did you hear it?

forbes 2010 had them 9th in revenue.

 

[New Jersey]

If the 0.00000000000000000001% chance of the team moving is a reality, **** hockey. I will never watch the NHL again.

Jesus Christ, can someone else buy the team? Please?

 

[New Jersey]

Uhhhh what? I find that impossible to believe. Where did you hear it?

EDIT: I was beaten to it.