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

Hackeybuff*

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And actually that is something that is perfectly debatable.

No, the Devils, barring some Act of God, will never outdraw nor outsell the Rangers. That's common sense. But the next few years to a decade will truly determine how much of a fanbase the Devils actually have.

The Devils moved to NJ in 1982. Which means that our earliest fans will be reaching, or have started, child bearing, money making, family raising age in the next few years. If you were a fan of hockey in 1981 in NJ, you were either a Rangers, Isles or Flyers fan. The Devils have been tasked with creating fans from scratch since then, as converts tend to be the outlier rather than the standard. So the people first exposed to hockey by the Devils, these fans who weren't a fan of any of the other three, are starting to procreate and settle. Sports loyalties get passed on by generation; I have many a hockey fan friend in New Jersey who are Rangers/Flyers fans by blood for that very reason.

Another thing to keep an eye on is that, with the Nets moving, the Devils are the sole major sports franchise bearing the name New Jersey in the state. Sure, the Jets, Giants, and Red Bulls play there, but they are all "New York" teams. Could that have a positive effect on the Devils popularity?

It'll be interesting to watch.

I remember when the Rockies left Colorado and landed in East Rutherford. I was 16 at the time. I can imagine the average person starts out as a fan around 10 or 12.

So the average earliest true Devils fan would have been born in 1970. I would say they have teenage kids and some of them even have kids in college.

I have a daughter who just graduated from high school. So I think we are now on our second generation of Devils fans and heading towards a third soon.

:handclap:
 

DevilChuk*

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I remember when the Rockies left Colorado and landed in East Rutherford. I was 16 at the time. I can imagine the average person starts out as a fan around 10 or 12.

So the average earliest true Devils fan would have been born in 1970. I would say they have teenage kids and some of them even have kids in college.

I have a daughter who just graduated from high school. So I think we are now on our second generation of Devils fans and heading towards a third soon.

:handclap:

That's the thing, the "second generation" of fans are only just graduating from college these next 3-4 years. Meaning they will have disposable income pretty soon, hopefully leading to a significant jump in season tickets.

The "boom" of Devils fans should happen in the next 5 years, average attendance should significantly improve... if it doesn't, it likely never will.
 

Yukon Joe

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That's the thing, the "second generation" of fans are only just graduating from college these next 3-4 years. Meaning they will have disposable income pretty soon, hopefully leading to a significant jump in season tickets.

The "boom" of Devils fans should happen in the next 5 years, average attendance should significantly improve... if it doesn't, it likely never will.

I do believe there is something to this - theidea of people "gorinw up" with a team.

The Jets were formed in '72, and moved to the NHL in '80. When I was a kid the Jets were liked, but lots of people in my dad's generation held onto their old favourite teams.

Well now people in my dad's generation are retired, and people in the prime of their careers are people like me who grew up on the Jets. As a result Winnipeg is way more passionate about the Jets then they were the first time around.
 

DevilChuk*

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I do believe there is something to this - theidea of people "gorinw up" with a team.

The Jets were formed in '72, and moved to the NHL in '80. When I was a kid the Jets were liked, but lots of people in my dad's generation held onto their old favourite teams.

Well now people in my dad's generation are retired, and people in the prime of their careers are people like me who grew up on the Jets. As a result Winnipeg is way more passionate about the Jets then they were the first time around.

Right.. I mean all you really have to look at is how well the Devils draw in games that fall within typical college breaks to realize a significant chunk of Devils fans are still in school.

We'll see.. until then, who really cares :laugh:
 

Jerzey Devil

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Right.. I mean all you really have to look at is how well the Devils draw in games that fall within typical college breaks to realize a significant chunk of Devils fans are still in school.

We'll see.. until then, who really cares :laugh:

Another problem is a lot of people leave NJ after school. A lot of those people still end up back in Jersey but I think this is why they have such a scattered fan base.
 

Strong Island

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Another problem is a lot of people leave NJ after school. A lot of those people still end up back in Jersey but I think this is why they have such a scattered fan base.

Bingo. Additionally, since Northern NJ is such an expensive area to live, young urbanites rarely have the disposable income to spend on 10+ games a year let alone a full season ticket package.
 

None Shall Pass

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That's the thing, the "second generation" of fans are only just graduating from college these next 3-4 years. Meaning they will have disposable income pretty soon, hopefully leading to a significant jump in season tickets.

The "boom" of Devils fans should happen in the next 5 years, average attendance should significantly improve... if it doesn't, it likely never will.

I am one of those fans. I'm not exactly making enough money for the upfront on season tickets (Well, I could, but then I wouldn't have as much drinking money and Sallie Mae would be very angry with me), but I graduated college and started spending more on the Devils once I got a job.

Another problem is a lot of people leave NJ after school. A lot of those people still end up back in Jersey but I think this is why they have such a scattered fan base.

This too. We draw really well on the road, especially in the southern states. And that's a trend. I can't tell you how many Jerseyites I know who went all points south because of how expensive New Jersey is to live a decent life in.
 

jol

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And the answer to the thread title is..............No.

https://www.sportsbusinessdaily.com/...08/devils.aspx

"The Devils apparently have found a solution to regaining their financial footing. According to a source close to the situation, Devils Owner Jeffrey Vanderbeek has finalized a deal with a new investor that will enable the franchise to get out of debt. The source said the deal would keep Vanderbeek firmly in charge as the majority owner, while minority owners Ray Chambers and his son-in-law, Mike Gilfillan – who owned a substantial stake in the Devils through their company, Brick City – are not expected to have future roles in the organization.

The identity of the partner has yet to be announced because, according to the source, there has been an agreement to stay silent until the completion of the Devils’ season. A formal announcement of the deal is expected within two weeks of the conclusion of the Stanley Cup Final."
Little bit unclear, is new investor going to buy out Chambers and Gilfillan or is team going to issue new shares? Latter one would help the team, buyout would only help minority partners.

JOL
 

severian

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Right.. I mean all you really have to look at is how well the Devils draw in games that fall within typical college breaks to realize a significant chunk of Devils fans are still in school.

We'll see.. until then, who really cares :laugh:

Problem is Nj is so expensive and its tough for college grands to find jobs that allow them to live on their own and afford luxuries like hockey tickets. People are bailing on this state because its so expensive. Thats a big reason you see so many devil jerseys at road games in places like Carolina., Florida, Tampa, phoenix, etc.
 

madhi19

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Little bit unclear, is new investor going to buy out Chambers and Gilfillan or is team going to issue new shares? Latter one would help the team, buyout would only help minority partners.

JOL

It could be a cash call by the majority owner to clean part of the debt and grab Chambers and Gilfillan shares if they don't come up with the cash. Followed by sale of those shares to other investors.
 

knorthern knight

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Their debt is too high. And Vanderbeek appears to be an unattractive business partner. The Devils will have to go through bankruptcy, and another ownership group will take control, minus the current crushing debt burden. Unless something goes horribly wrong, the Devils will stay at The Rock.
 

LadyStanley

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http://sulia.com/channel/hockey/f/2891298b-8747-4764-953b-ec4f6dbef5d3/?source=twitter

David Shoalts

NHL insiders who are skeptical of reports New Jersey Devils owner Jeff Vanderbeek has a savior point out something interesting. They say the real test will come when the people apparently willing to invest $200-million and let Vanderbeek stay in charge have to sign the NHL owners consent letter. This is a guarantee to the NHL you will pay the team's bills. It means putting your personal wealth on the line. As former Coyotes owner Jerry Moyes found out, you don't easily walk away from it.
 

KevFu

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So we have three teams in the metro area.

1 is top three NHL franchise financially, with the owners also owning the arena, the cable network their games are on, and the cable system people watch that network on.

1 is a middle-of-the pack team in revenues with the most on-ice success. In a brand new arena that's debt-ridden and now has financial issues.

1 is a bottom of the standings team, with a horrible arena and dozens of attempts to get a new one. A rich owner who's been losing money left and right on a once-proud franchise.

Simple solution: The Islanders play in Newark, with Jeff Vanderbeek and Charles Wang co-owning the team; the Devils are sold to Quebec!




(clearly in jest)
 

kombayn

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The Islanders are going to be the team to relocate if they do at all in the first place. The Devils have an extremely good television contract, they're very successful, they just have an owner who sucks and is extremely bad with his finances.
 

kdb209

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The Islanders are going to be the team to relocate if they do at all in the first place. The Devils have an extremely good television contract, they're very successful, they just have an owner who sucks and is extremely bad with his finances.

Actually, the Isles' cable deal (reportedly between $20M-$25M/yr) is larger than the Devils' (reportedly between $15M-$20M).

Also, it was rumored back in January that the Devils were looking at monetizing future TV revenues - selling them off for an up front lump sum payment to deal with current debt problem. This could leave them in the same situation that Howard Baldwin left the Pens - sacrificing future revenues for up front cash - which later led to their bankruptcy.
 

Dado

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Also, it was rumored back in January that the Devils were looking at monetizing future TV revenues - selling them off for an up front lump sum payment to deal with current debt problem.

I would hope the league steps in if that happens, as MLB did with the Dodgers. That sort of nonsense could hamstring a franchise for a very long time.
 

KevFu

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Actually, the Isles' cable deal (reportedly between $20M-$25M/yr) is larger than the Devils' (reportedly between $15M-$20M).

Also, it was rumored back in January that the Devils were looking at monetizing future TV revenues - selling them off for an up front lump sum payment to deal with current debt problem. This could leave them in the same situation that Howard Baldwin left the Pens - sacrificing future revenues for up front cash - which later led to their bankruptcy.

The Islanders TV deal gave them the right to take 18.5% revenue share of the network starting in 2000-2001. And the language didn't cover the contingency that the network was sold to someone else.

Therefore, MSG had to give the Islanders a ridiculous contract extension to buy out that clause. (Would have been higher, but the Islanders wanted to get rid of the "if we suck and get horrible ratings, the contract is breached" clause).

The first year of the extension saw an increase from $14.8 million in the last year of the old deal to $17.5 million in 2000-01, and escalates up to $36 million in 2031-32, the final season.

If it escalated at the same rate each year, it would be about $25 million next season, and go up roughly $0.6 million per year.

That's 32-year, $840 million TV deal (average of $31 million a year).

(The LA Lakers were getting $30 mil last season). They're basically on par with the Habs TV deal.
 

LadyStanley

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http://www.nj.com/news/index.ssf/2012/06/stanley_cup_run_nets_devils_mo.html

It’s been a good spring for the Devils and the Prudential Center they call home. And while Monday night’s loss to the L.A. Kings dashed the hopes of thousands of fans, the Stanley Cup Finals brought $32.3 million in additional revenue to Devils’ coffers, according to a Star-Ledger analysis of playoff revenue.
...
Vanderbeek and team officials would not provide specific details on revenue raised during the team’s unexpected journey to the Stanley Cup Finals — they provided only amounts from concessions at 30 events since April 16.
But the newspaper reviewed recent audits of the team by the Newark Housing Authority — the arena landlord — and used projections reported in sports business journals to arrive at the numbers. Two industry officials corroborated the figures but declined to speak publicly because they were not authorized.
The biggest chunk of playoff money came from ticket sales to the 11 sold-out home games. The Devils sold $26.2 million in tickets during the postseason, according to the review. Concessions brought in another big piece with the Devils selling $3.75 million in sundries. Sponsors kicked in $1.1 million to the Devils’ bottom line during playoffs. Devils merchandise also gave the team an influx of about $1 million worth of jerseys, T-shirts and hats.
...
One industry official told The Star-Ledger that a deal was in place that involved a significant portion of Chambers’ 47.5 percent stake in the team going to the mystery investor. The move, combined with an agreement with the bank, could raise the necessary capital to put the Devils on firm financial footing.
Other industry sources were skeptical of the idea saying phantom deals had come and gone since Chambers and Vanderbeek publicly declared their intention to part ways in February 2011.
 

PanthersHockey1

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the thing is both the islanders and devils have won multiple cups and have long storied franchises. IIRC the league has hinted at the fact they will do everything in their power not to relocate teams that have won cups.

The new york metro area has more than half the population of Canada. There is room for 3 teams in the market. I think the islanders could benefit from moving counties. Perhaps from unfriendly nassau to suffolk. Somewhere where politicians are more inclined to accommodate the team.
 

Colin226

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That plus this from Lou: “There is nothing that’s affected what I’m doing or has affected it. I’m sure what has to be taken care of will be taken care of in the very near future. In my opinion, things will get settled.”


I mean I keep hearing guys on here speaking in absolute truths that the Devils are going under but the team is certainly not spending like one that is going bankrupt. I keep hearing a lot of things about it but I really can't see any indication of that. It could change this summer, but it's been almost a year since this story broke and I have yet to actually see some evidence of bankruptcy (beyond secret sources and such).. The cash advance from the league was from Chambers not willing to pay his share of expenses, and that's about as much hard evidence as I've seen
 

Kimota

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the thing is both the islanders and devils have won multiple cups and have long storied franchises. IIRC the league has hinted at the fact they will do everything in their power not to relocate teams that have won cups.

The new york metro area has more than half the population of Canada. There is room for 3 teams in the market. I think the islanders could benefit from moving counties. Perhaps from unfriendly nassau to suffolk. Somewhere where politicians are more inclined to accommodate the team.

They should merge the two teams and relocate them in Brooklyn.
 

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