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Devils Financial Woes on Verge of Being Solved?

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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.

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Doesn't make alot of sense. Especially the part about JVB keeping majority, it would be a tad odd for 1 person to spend so much money on essentially nothing, when you can buy the whole thing out of bankruptcy.

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Doesn't make alot of sense. Especially the part about JVB keeping majority, it would be a tad odd for 1 person to spend so much money on essentially nothing, when you can buy the whole thing out of bankruptcy.

While it's probably the case with most other types of businesses, bankruptcy gets even more complicated than it already is when you're dealing with a professional sports franchise. A rich guy can't just come along and say, I'll buy a majority stake in the team.

On the other hand, the word is the rest of the majority of the owners and the league does not like VBK, and I don't see why the league would do him any favors. Perhaps to avoid the embarrassment of having a Stanley Cup finalist declare bankruptcy a day after the season is over.

donald trump...would be my guess.

God help us if that's remotely true.

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Doesn't make alot of sense. Especially the part about JVB keeping majority, it would be a tad odd for 1 person to spend so much money on essentially nothing, when you can buy the whole thing out of bankruptcy.

True. But nobody knows whether the new investor is also getting a stake in Devils Arena Entertainment, the seperate corporate entity that runs (and takes its profits from) the arena. The stories always say that Chambers wants to get out of his minority interest in the team, but it never says anything about the DAE deal which, in the long term, could potentially be the more lucrative attraction to investors.

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True. But nobody knows whether the new investor is also getting a stake in Devils Arena Entertainment, the seperate corporate entity that runs (and takes its profits from) the arena. The stories always say that Chambers wants to get out of his minority interest in the team, but it never says anything about the DAE deal which, in the long term, could potentially be the more lucrative attraction to investors.

DAE is up to its eyeballs in debt too. That's the catch. I'm guessing the value of the whole gigantic ball of debt is probably around $350-400M or so?

The team's debt and the arena's debt are two different things. The team's debt is old losses and the service on it which is problemsome now. The arena debt is the bomb that goes off in a couple of years.

Edited by maxpower

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God help us if that's remotely true.

just a bad guess but i wanted to see what it looked like on the internet. :evil:

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team debt is $80MM. Arena debt is $180MM. That was the report last summer.

i could believe that for JVB to get someone that allowed him to remain in control while clearing the debt (not just refinancing it), was giving him an Einhorn-Mets like deal where they paid the debt and JVB had time to make good to them or they got the team cheap.

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team debt is $80MM. Arena debt is $180MM. That was the report last summer.

i could believe that for JVB to get someone that allowed him to remain in control while clearing the debt (not just refinancing it), was giving him an Einhorn-Mets like deal where they paid the debt and JVB had time to make good to them or they got the team cheap.

The bust-out scenario, I'm just not sure what they get out of that because you have to assume the arena debt too, otherwise you're just an owner of a break-even hockey team with an arena lease with JVB. Yuck.

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SBJ is a reputable source. DAE might be heavily in debt but it has to be making gobs of money on all the Newark dates, no?

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SBJ is a reputable source. DAE might be heavily in debt but it has to be making gobs of money on all the Newark dates, no?

While the Garden is shut down, sure. They do have that lease where they sodomize Newark, and I guess they could be cooking the books moving money from hockey operations (concessions and such) into DAE business.

It just seems like a real sh!tty deal on paper. If JVB got nuked, it would be a good deal. sh!t, no one knows if he even has kick-in money in the first place. LOL. He didn't pay the bills this year and still had to get a bridge loan from the league.

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DAE has to be making a profit year over year. They derive 100% of the revenue from the building while, effectively, paying $0 in rent due to the recent arbitration ruling. You can't get a much better deal than that.

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DAE has to be making a profit year over year. They derive 100% of the revenue from the building while, effectively, paying $0 in rent due to the recent arbitration ruling. You can't get a much better deal than that.

Right. So once the debt is paid, that end of the business is a license to print money.

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The bust-out scenario, I'm just not sure what they get out of that because you have to assume the arena debt too, otherwise you're just an owner of a break-even hockey team with an arena lease with JVB. Yuck.

because the big debt is DAE on the arena and that's not necessarily the new owner's problem.

assuming you JUST get the team, and you get it on a ridiculously sweetheart deal assuming JVB can't repay you in an allotted time frame, you'll own the NJ Devils for perhaps $100MM all in. That for a team that has revenues of probably $70MM outside of concessions at the arena with what amounts to free rent is not bad.

edit: back of the napkin calcs have me thinking that strict revenue outside of concessions might actually be closer to $80 or $90MM. The team is what gets the TV money and merchandising money and shared league revenues.

Edited by sundstrom

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DAE has to be making a profit year over year. They derive 100% of the revenue from the building while, effectively, paying $0 in rent due to the recent arbitration ruling. You can't get a much better deal than that.

i am not convinced that DAE gets 100% of the building revenue either. its possible that the devils themselves are written into concession deals on dates where they play. it would make sense that they would be to pump the value of the franchise.

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I bought the share. It's going to be sweet. #OrNot

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Well this certainly is good news at least at face value. I can't wait to hear the specifics and to who it is.

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Well this certainly is good news at least at face value. I can't wait to hear the specifics and to who it is.

I CAN wait.. Having to wait would entail we make it to Game 7. Not having to wait would probably mean we hear this announcement by Monday.. haha..

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donald trump...would be my guess.

That's about the only thing that can darken my mood lol. Especially since he'd be the last guy to want a hands off piece of the team. But I'd believe Botta more than the paper itself.

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Love all the armchair economists who come out whenever this topic comes up. I'm not judging, I truly do enjoy the speculation and attempts to figure this whole thing out even though the public knows very little about what deals are in place.

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None of us know dick about what's really going on behind closed doors.

All I can hope for is that A. The team is going nowhere and B. The financials are so that payroll and free agency/roster is not affected.

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donald trump...would be my guess.

Donald Trump has no money, which is why he is forced to do those stupid apprentice shows.

He is a "millionaire" in name only.

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