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

[Dado]

Im sure he does, after all, he was a Sr.VP. at...... Lehman Brothers.

Is this where we find out that, before that, he was a mortgage pimp at Countrywide?

 

[Bert Marshall days]

Who gets the revenue for concerts, circus, events etc, (ie non devil games) at the Prudential Center?



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[Fugu]

Who gets the revenue for concerts, circus, events etc, (ie non devil games) at the Prudential Center?



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I believe the Devils arena mgt company does, as they took over managing non-hockey events from AEG.

 

[Killion]

Is this where we find out that, before that, he was a mortgage pimp at Countrywide?

Yep. I like to think of NHL ownership like one of those wippy Scotch Pine Tree's you see in dense rows by the side of the highway looking dense, dark & mysterious. However, If you stop the car, get out & lasso the top of one, lower it to the ground and let er' rip, you'll never be disappointed nor cease to be amazed at what comes flying out.... plus, its a lot of fun to imagine the fright you'll be giving the Ministry workers who encounter your handiwork, speed dialing MUFON as you drive off.

 

[guyincognito]

I believe the Devils arena mgt company does, as they took over managing non-hockey events from AEG.

It's all intertwined. The Newark Housing Authority is the nominal owner of the building but AFAIK, has not recieved a dollar in direct payment, so they must be the weakest owner in the history of the universe.

Even that being said, the rent they say they are due is laughably low.

 

[Bert Marshall days]

It's all intertwined. The Newark Housing Authority is the nominal owner of the building but AFAIK, has not recieved a dollar in direct payment, so they must be the weakest owner in the history of the universe.

Even that being said, the rent they say they are due is laughably low.

Who is AFAIK?

NJD gets all the revenue but doesn't own the arena? How's that?

If that's so, why do they have money trouble?


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[guyincognito]

Who is AFAIK?

NJD gets all the revenue but doesn't own the arena? How's that?

If that's so, why do they have money trouble?


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I explained it in the Devils thread. The guy who represented Newark in the negotiations for the building ended up in jail. Sharpe James. Not for that, but looking at the aftereffects of his deal, he might as well have.

The two people most involved in this were Sharpe James and James McGreevey. Not exactly the axis of ethics.

On the Devils end you have Ray Chambers (who was not even mentioned as being involved in anything until last year when he wanted to sell, his brother in law must have been his frontman or something), who is a pump and dumper, and JVB, who the book is still out on... but you know who he worked for before he became a hockey owner.

They have debt, the price of servicing the debt has gone up, there's another debt crisis looming, and rich people don't like spending their own money, they prefer to leverage themselves.

There you go.

 

[Ernie]

why is a housing authority building stadiums?

 

[None Shall Pass]

why is a housing authority building stadiums?

Investment in quality of life? They're completely revamping that area of Newark with new bars, hotels, etc, and the arena is the basis of that. Devils, Seton Hall, and that NBA team play there, as well as big concerts and such.

I'm sure they're due some rent too, but VBK is kinda a weiner.

 

[guyincognito]

why is a housing authority building stadiums?

They're not. They got their money from the state. Newark doesn't have any money to build stadiums.

Their rent is insigificant. The rent that they can't claim (why is that...) is around
$1M per year.

 

[Colin226]

Here is the Devils attendance analysis, for those that love to harp on it and for those just interested in why the Devils have had attendance issues:


The thing people on the outside don't see about the Devils fan base is that it's still very young.. You have to realize that in 1994, we were a team that had pretty much been a joke for 12 years and was on the verge of moving.. A lot of people in NJ looked at the Devils and the Rangers and said "Well, the Rangers just won a Cup and the Devils look like their moving, so I'll be a Rangers fan".. That's not even counting all of the people who were Rangers/Flyers fans before the Devils even moved here.. If you took a poll today of northern NJ hockey fans, you would find that a huge majority of fans younger than 25 are Devils fans, and very good amount of fans older than 25 are Rangers fans..

The majority of the Devils fan base is only now beginning to be able to afford tickets on their own, because they are the generation that grew up during the Cup years so they are still young and don't have a lot of extra income to drop on a bunch of games or season tickets.. They fell in love with the team at young age, but were previously too young to go to more than a couple games each season.. As they get older, that changes..

In 5 years, I can guarantee that the Devils will be at at least 91% capacity for the season.. In 10 years (assuming the team remains a good playoff contender), I guarantee at least 96% capacity.. And I really believe they will beat both those estimates, but those are bare minimum guarantees.. You couldn't possibly see this unless you are a fan living in NJ..

********

So here's some of the proof:

- In 2009 to 2010, the Devils won the division and acquire Kovy at the deadline.. They sold out a total of 15 games
- In 2010 to 2011, the Devils were the worst team in the league for quite a while and had their worst season in most fans lifetimes (because of the young fan base).. Fan favorite Parise was also out nearly the entire season.. They sold out a total 12 games.. Only 3 fewer than the previous season when the team was fantastic to watch
- For the 2011 to 2012 season, the Devils' season ticket sales are up 130% from last season (with over 1,800 new STH), and regular season ticket sales are up 260% from where they were this time last season.. And again, that's coming off the worst season in 2 decades

Conclusion: Every season, attendance gets better (factor in how bad we were last season versus how our ticket sales weren't much worse than the year prior) and season ticket sales increase every season.. This is a young fan base that will soon be filling the arena to near capacity on a nightly basis

 

[guyincognito]

Attendance isn't relevant to this. Honestly I'm not even sure why it got into the original article, except to make it "hittier". This involves arena loans and having to service them in a negative climate to do so. You could sell out every game and still get into this mess unless you make money hand over fist.

Anyways, according to this Chere article, other sources say the payment date was pushed back and was NOT missed. The team doesn't mention it one way or another, they do back up the claim here that the sale process of the available 47% is moving along, to 3rd parties.

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html

 

[ObeyPerry]

Federal government bailout. The Devils might be "Too big to Fail".

 

[Colin226]

Attendance isn't relevant to this. Honestly I'm not even sure why it got into the original article, except to make it "hittier". This involves arena loans and having to service them in a negative climate to do so. You could sell out every game and still get into this mess unless you make money hand over fist.

Anyways, according to this Chere article, other sources say the payment date was pushed back and was NOT missed. The team doesn't mention it one way or another, they do back up the claim here that the sale process of the available 47% is moving along, to 3rd parties.

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html

I brought it up because it was brought up (and always seems to be with the Devils, even when not relevant).. Basically, this is all because of the team's 47% shares being sold, so it's not much to worry about.. Hell, I think Jeff is the one acquiring those shares anyway, so he must be doing alright.. I don't blame people (unfamiliar with the NY/NJ media) for taking the Post's article seriously, but Chere and Gulitti are really the only guys anyone should listen to, especially Gulitti.. If it's the truth, he'll report the facts..

 

[TaketheCannoli]

He can't sell the team, just his 47% non-controlling stake. That's what he's been trying to sell, along with Moag's share (which I guess is the remaining 6% that neither Chambers or Vanderbeek own).


However, if the team is defaulting on its debt, then CIT can force a sale, assuming things get that bad. See: Dallas Stars and Hicks.

The arena management company guarantees the team's debt, and has it's own share of debt (so $100 MM and $180 MM respectively). How is the ownership structure of the arena mgt company set up?

You might get your wish, you old contractionist. I think there may be too many franchises to save in the next few years.

 

[Fugu]

Attendance isn't relevant to this. Honestly I'm not even sure why it got into the original article, except to make it "hittier". This involves arena loans and having to service them in a negative climate to do so. You could sell out every game and still get into this mess unless you make money hand over fist.

Anyways, according to this Chere article, other sources say the payment date was pushed back and was NOT missed. The team doesn't mention it one way or another, they do back up the claim here that the sale process of the available 47% is moving along, to 3rd parties.

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html

Hmmm.... Vanderbeek isn't the one who will be buying out his partners, at least according to this article.

In fact, two people familiar with the relationship between the team and its lenders said the deadline for the loan payment had been pushed back almost two months and an agreement to sell a 47 percent share of the NHL club to someone other than Devils chairman Jeff Vanderbeek could be completed in the next 40 to 45 days.

So the payment has been pushed out 2 months, and someone else 'could' buy the noncontrolling share to the tune of $100 million?

This reminds me of Checketts, other than him not actually being the guy with much of his own money. It doesn't appear the Vanderbeek has the money himself, tbh.

If and when the agreement by partners Mike Gilfillan and Ray Chambers to sell their shares of Brick City LLC is approved by the NHL’s board of governors, Vanderbeek will still own 47 percent of the Devils, the new owners will have a 47 percent share and Peter Simon will retain his 6 percent ownership stake.

No comment if they're still looking for investors, or is we're at the due diligence stage with the NHL?

According to the people familiar with the transaction, who requested anonymity because the deal is still being negotiated, the sale likely only reached advanced stages when Brick City agreed to lower its asking price of $200 million by 20 percent.

This part doesn't make sense. They own 47%. Were they asking for $200 million for their share, meaning the Devils were worth $400 million in their estimate, or is $200 million the total price, and to buy a 47% stake, you'd have to come up with $94 million, now reduced by 20%, or $75.2 million?

 

[Fugu]

You might get your wish, you old contractionist. I think there may be too many franchises to save in the next few years.

Not really a wish, just a business analysis.

 

[guyincognito]

Hmmm.... Vanderbeek isn't the one who will be buying out his partners, at least according to this article.



So the payment has been pushed out 2 months, and someone else 'could' buy the noncontrolling share to the tune of $100 million?

This reminds me of Checketts, other than him not actually being the guy with much of his own money. It doesn't appear the Vanderbeek has the money himself, tbh.






No comment if they're still looking for investors, or is we're at the due diligence stage with the NHL?






This part doesn't make sense. They own 47%. Were they asking for $200 million for their share, meaning the Devils were worth $400 million in their estimate, or is $200 million the total price, and to buy a 47% stake, you'd have to come up with $94 million, now reduced by 20%, or $75.2 million?

This includes the arena. Would put the total value of the team/arena at $340M, counting the floater 6%.

No, I don't think JVB has the money, but few would. He'd have to bring in investors which is what I guess is happening. Or what they are attempting to do, depending on the source of the moment.

He also wouldn't be getting this money, the other 47% partner would be (since they're the ones being bought out) so it would have little effect on paying off debt, thus it's not a Wilpon-type situation.

 

[Fugu]

This includes the arena. Would put the total value of the team/arena at $340M, counting the floater 6%.

No, I don't think JVB has the money, but few would. He'd have to bring in investors which is what I guess is happening. Or what they are attempting to do, depending on the source of the moment.

He also wouldn't be getting this money, the other 47% partner would be (since they're the ones being bought out) so it would have little effect on paying off debt, thus it's not a Wilpon-type situation.

Okay, thanks. That makes sense. Having said that, would anyone realistically want to put up that much money and let JVB call all the shots? It's the same problem Checketts encountered when he wished to retain control of the Blues, but needed a 75% stakeholder replaced.

 

[guyincognito]

Okay, thanks. That makes sense. Having said that, would anyone realistically want to put up that much money and let JVB call all the shots? It's the same problem Checketts encountered when he wished to retain control of the Blues, but needed a 75% stakeholder replaced.

My educated guess is it's a group and JVB would be "in" with the majority, if not all of them. So, actually he'd be in a more powerful situation than he is in now, with pretty much an equal partner and a floater that is on his side.

Let's say there's 4 investors coming in, you'd have 47%, 6%, and a 47% pie broken up 4 different ways of varying buy-in. If they were all loyal, shenangians would be highly unlikely. But at the same time, $160M broken 4 ways unevenly is still alot of money and it's probably more rich people refusing to use their own money and leveraging themselves.

When you think about it, if we're to believe this (and we're really deep into the fog of crappy hockey reporting here), a logical reason for the price drop on the 47% could be that JVB found $160M worth of buyer but couldn't coerce more money out of those individuals or find someone, in addition to them, to make the $200M wish of Brick City.

 

[Rink Rage]

Incase no one saw this.
http://prohockeytalk.nbcsports.com/...s-claim-that-bankruptcy-report-is-inaccurate/

 

[DevilChuk*]

Hmmm.... Vanderbeek isn't the one who will be buying out his partners, at least according to this article.

So the payment has been pushed out 2 months, and someone else 'could' buy the noncontrolling share to the tune of $100 million?

This reminds me of Checketts, other than him not actually being the guy with much of his own money. It doesn't appear the Vanderbeek has the money himself, tbh.

No comment if they're still looking for investors, or is we're at the due diligence stage with the NHL?

This part doesn't make sense. They own 47%. Were they asking for $200 million for their share, meaning the Devils were worth $400 million in their estimate, or is $200 million the total price, and to buy a 47% stake, you'd have to come up with $94 million, now reduced by 20%, or $75.2 million?

Could be other investors, but again, both the team and the MOST trustworthy source for NJD news states otherwise.

I think the Arena/Arena management are included in the evaluation from Forbes at $200 million. I highly doubt the arena doubles the value of the team from $210 to >$400 million.

And from another quote I saw of your posts... again, there was a clause in Vanderbeek's original purchase of the controlling shares from Chambers which stated Chambers could sell the team if certain stipulations were met (which i'd assume are mostly financial and hard to meet). This is why the original evaluation from Chambers was at $260 million. Had he got that figure from someone, VBK would have been forced to sell his share of the team as well. Now that that is not getting done, Chambers has evaluated the team at the more realistic $200 million in order to sell his 47% at whatever it comes out to (95 ish million?)

 

[Kimota]

NJ Devils fans are spoiled - so used to winning that when the team sucks for a year, they don't feel like supporting it.

I'm the same way - I spent much less energy and money on the team after the season went down the toilet before Christmas. Why waste 100s of dollars (in this economy) on a team that is playing like they don't care?

I don't think this is unique to the Devils - it's a typical reaction of a fanbase that perhaps started taking winning for granted.

The team actually was doing quite well financially for the first couple of seasons in Newark - when they were actually winning.

Edit: Before the lockout, the Devils were never a free-spending team, their payroll always hovered around average. So I never thought this new trend of being one of the league's big spenders (spending to the Cap, front loading contracts, sending bad contracts to the minors) was sustainable long term.

Frankly I don't think that's about winning or the fans being spoiled. I went to several Devils all throughout the 90s and most of the time we ended up there because there was no tickets available to the Rangers games. And everytime it was deserted and me and my friends we kept changing seats since there was noone there.

 

[Kimota]

Soon Quebec city won't have to work that hard to get a new team, Bettman will beg them to accept one of their franchises. Please take one of our teams, please?

 

[Northern Dancer]

Soon Quebec city won't have to work that hard to get a new team, Bettman will beg them to accept one of their franchises. Please take one of our teams, please?

Assuming they get a free arena courtesy of taxpayers you may be right. Hold it, is not that the problem in NJ?