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dmon2010

Devils $80 Million Debt

63 posts in this topic

Yea I mean I don't get it. The team made the playoffs 15 years in a row and they're having issues all the sudden the one year they don't make the playoffs? Jesus.

This team just doesn't make a profit, regardless of whether they make the playoffs or not. Obviously, not having those playoff dates is a huge blow to the bottom line, but the biggest factor in all of this is attendance, and the money generated from tickets sold. To build an arena that cost the team $175 million (the Newark Housing Authority paid the other $210 million) + financing interest/charges, they had to expect that attendance would be way better than it currently is. And they definitely expected getting better corporate support for the sale of the club seats and suites (where a large majority of ticket revenue derives from for most teams) than they have received.

It's like the perfect storm of financial disaster for the Devils - (a) build a new arena that costs hundreds of millions of dollars that opens in 2007, (b) the financial system basically collapses a year later, taking with it a large majority of the wealth of the team's owner, © massive unemployment means casual and die hard fans alike cannot afford to pay exhorbinant ticket prices and parking fees to attend the games, (d) corporate belt tightening means giving up the Devils tickets the corp. or firm has in order to keep tickets to more popular teams like the Yankees or Giants, (e) the team's minority owner, who has no interest in hockey and simply wanted an arena built in Newark, wants out, (f) nobody else has stepped in to take the place of the minority owner, the majority owner cannot afford to purchase those shares, and the banks seem unwilling to extensively restructure the loans.

What amazes me is there wasn't a complete firesale to bring this team's payroll to the CAP floor this summer. This is all the more reason to trade Parise at the deadline if you know that (a) you financially cannot afford to re-sign him due to the ownership situation, or (b) he refuses to resign.

Edited by Chuck the Duck

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This team just doesn't make a profit, regardless of whether they make the playoffs or not. Obviously, not having those playoff dates is a huge blow to the bottom line, but the biggest factor in all of this is attendance, and the money generated from tickets sold. To build an arena that cost the team $175 million (the Newark Housing Authority paid the other $210 million) + financing interest/charges, they had to expect that attendance would be way better than it currently is. And they definitely expected getting better corporate support for the sale of the club seats and suites (where a large majority of ticket revenue derives from for most teams) than they have received.

It's like the perfect storm of financial disaster for the Devils - (a) build a new arena that costs hundreds of millions of dollars that opens in 2007, (b) the financial system basically collapses a year later, taking with it a large majority of the wealth of the team's owner, © massive unemployment means casual and die hard fans alike cannot afford to pay exhorbinant ticket prices and parking fees to attend the games, (d) corporate belt tightening means giving up the Devils tickets the corp. or firm has in order to keep tickets to more popular teams like the Yankees or Giants, (d) the team's minority owner, who has no interest in hockey and simply wanted an arena built in Newark, wants out, (e) nobody else has stepped in to take the place of the minority owner, the majority owner cannot afford to purchase those shares, and the banks seem unwilling to extensively restructure the loans.

What amazes me is there wasn't a complete firesale to bring this team's payroll to the CAP floor this summer. This is all the more reason to trade Parise at the deadline if you know that (a) you financially cannot afford to re-sign him due to the ownership situation, or (b) he refuses to resign.

Very good points here.

It is amazing how this brand new and beautiful arena in about 5 years went from being the future of the Devils to what is helping to drown them.

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TG commented on this subject a bit (10th comment, link below) after someone pasted the same information from the Post...again.

http://blogs.northjersey.com/blogs/fireice/comments/devils_still_cant_find_answer_for_reigning_stanley_cup_champs/

Jeffs: Thanks for the advice on how to do my job.

I’ll try to live up to the standards you just displayed by quoting several news sources that simply regurgitated what was written in one article without providing any supporting evidence—other than maybe your “source from heaven.”

There are definitely financial concerns for this team. I’ve never said otherwise. Vanderbeek has to find a way to figure this out as far as refinancing the debt (which, again, for the team is a total of roughly $80 million), but that’s something we’ve known for a while and nothing has really changed.

I talked to people from the NHL last week. There was no veiled threat from Bettman. There was no deadline, no ultimatum. The NHL isn’t taking over the team next month.

If you believe all that other stuff, then why are you asking me about it?

You already have the information you want.

Posted by Tom Gulitti on 01/20 at 02:37 AM

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TG commented on this subject a bit (10th comment, link below) after someone pasted the same information from the Post...again.

http://blogs.northjersey.com/blogs/fireice/comments/devils_still_cant_find_answer_for_reigning_stanley_cup_champs/

Jeffs: Thanks for the advice on how to do my job.

I’ll try to live up to the standards you just displayed by quoting several news sources that simply regurgitated what was written in one article without providing any supporting evidence—other than maybe your “source from heaven.”

There are definitely financial concerns for this team. I’ve never said otherwise. Vanderbeek has to find a way to figure this out as far as refinancing the debt (which, again, for the team is a total of roughly $80 million), but that’s something we’ve known for a while and nothing has really changed.

I talked to people from the NHL last week. There was no veiled threat from Bettman. There was no deadline, no ultimatum. The NHL isn’t taking over the team next month.

If you believe all that other stuff, then why are you asking me about it?

You already have the information you want.

Posted by Tom Gulitti on 01/20 at 02:37 AM

I'll fully admit now that I was wrong over the summer when I believed that everything was rosy, but I still do not think it's nearly as bad as The Post is indicating.. As TG said, it's still pretty much been 1 article rewritten several times.. And all of it coming from "a secret source"

We know 2 facts..

1 - The league doesn't currently think it's serious enough to step in

2 - We're still spending very decent money on our players

Once Jeff refinances, we pretty much go back to the way things have been for, what TG says is, quite a while

Edited by Colin226

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You guys do realize that the team isn't in debt, right? The $80 million has always been debt on the arena.

Nobody has ever said that Devils Arena Entertainment is in trouble (although, to be fair, since all of this is about a series of private companies... who knows what the hell is really going on).

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You guys do realize that the team isn't in debt, right? The $80 million has always been debt on the arena.

Nobody has ever said that Devils Arena Entertainment is in trouble (although, to be fair, since all of this is about a series of private companies... who knows what the hell is really going on).

I believe that the team is the guarantor on those loans (which really makes the team owners the guarantor of the loans). Devils Arena Entertainment is merely a shell holding company set up by the team to keep profits from non-Devils related events away from hockey related revenues.

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Yea but that's the thing... there are "shell companies" around "shell companies" with all of this. Heck, Chambers was apparently convinced that he could sell the whole team out from under Vanderbeek a few months ago, so who knows what is going on.

What is obvious is that the team's operations budget (for player payrolls and equipment and stuff) hasn't been affected.

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True. But that might not be the case come July 1. Nobody, including that clown from the NY Post, has a true understanding of what's going on. The Post writer was on XM radio's NHL Home Ice again yesterday morning and basically admitted that he is a Rangers fan from Brooklyn that doesn't believe there is enough interest in this area to support 3 teams. He also stated, at least twice during the interview, that the Devils TV contract is with YES, not MSG. For someone so plugged into this situation, you'd think he'd have his fact straight...then you remember that he works for the NY Post. On the flip side, maybe his anonymous source is JVB himself as they have been known to tap people's phones to get information in the past.

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Ain't that the truth, about nobody knowing what's really going on (and least of all Koosman, with his super secret squirrel source :rolleyes: ).

You know, since you mentioned it, I'd love if the Devils moved to YES. I think that it would be good for everyone, if that happened. Dolan and MSG screw the Devils at every opportunity anyway.

Koosman couldn't even get the starting day of training camp correctly in his original piece, FFS.

From the way that the team reacted after the one story (In December?) I'm pretty convinced that Koosman is talking out of his butt. That the team addressed the issue at all really says something about just how upset they are (I'm sure that the comment about the team telling off bankers got under Vanderbeek's skin a little bit in particular, seeing as how all of those guys are his personal friends...).

Anyway, I'm sure that everything isn't completely hunky-dory, but I seriously doubt that the team itself is in dire straights either.

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re: the current loan with a payment of $80MM - the team is the guarantor.

there is another loan with $180MM due in 2014 where the arena is the collateral.

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Koosman couldn't even get the starting day of training camp correctly in his original piece, FFS.

From the way that the team reacted after the one story (In December?) I'm pretty convinced that Koosman is talking out of his butt.

Because we know the team wouldn't have any reason to lie. I hate to keep going back to this but I heard denials from the Mets for two years about how they were in trouble financially, even when all the evidence showed they were until they finally had to acknowledge it before this offseason.

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you've alsogotta think about this. A sports team usually isn't a profitable venture for any business or company. it's really only a benefit to the town and it's tourism. plus it's the mets. just wrap your brain around that.

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Koosman just wrote another piece for the Post yesterday, by the way.

And no, there's really nothing new in it. He's speculating now that the NHL is floating the Devils money to make payroll (based on what, I have no idea), which everyone is denying (well, it seems as though they're ignoring him more than anything, but the denials are there nonetheless).

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