ghdi

The Devils Minority partners are looking to sell their share.

227 posts in this topic

Why? This is likely the minority owner wanting out after experiencing almost a 100% appreciation in his team equity. It's not likely a new owner will be calling shots in the future, so VBK will keep running the team and he seems willing to spend.

Don't you have to take into consideration the 250M in debt as well when looking at the overall financial picture?

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Don't you have to take into consideration the 250M in debt as well when looking at the overall financial picture?

That isn't changing, new partner or old partner, so no, it's pretty meaningless when it comes to change due to a new partner.

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That isn't changing, new partner or old partner, so no, it's pretty meaningless when it comes to change due to a new partner.

So that little debt is a non-factor to potential new partners, I highly doubt it. Most people are focused on the value of the club increasing from 128 to something like 220 which is great until you look at the debt vs value. I don't see how the debt doesn't factor into the overall picture.

Pretty cool though if 250M is meaningless. I think you'd be hard pressed to find a single interested investor that wouldn't take that debt into consideration. Owning sports franchises these days is risky business to begin with. Time will tell.

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1) I was talking about the day to day running of the company doesn't change because of new partner or older partner, the debt is the same.

2) The Forbes valuation included the debt, so that is factored into their estimated worth of the team. How leveraged a new partner would feel comfortable being is up to them, but doesn't affect how the Devils organization is run, since VBK calls the shots.

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Montreal was debt-ridden when they were sold as well. is there a true estimation of their debt level? Forbes is merely assumptions.

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Didn't Corzine lead a group that wanted to buy the Nets a few years ago before that team was sold to Ratner? Maybe VBK is friends with him and can convince him to gather up some interested investors. ... Just throwing that out there.

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1) I was talking about the day to day running of the company doesn't change because of new partner or older partner, the debt is the same.

2) The Forbes valuation included the debt, so that is factored into their estimated worth of the team. How leveraged a new partner would feel comfortable being is up to them, but doesn't affect how the Devils organization is run, since VBK calls the shots.

I hear what you're saying. However I'm going by what TG wrote and long story short I believe the jist of what he said was when people are talking about the value of the team jumping from 125 to 218 they've leaving out the 250M in debt. Guess I could be wrong.

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I hear what you're saying. However I'm going by what TG wrote and long story short I believe the jist of what he said was when people are talking about the value of the team jumping from 125 to 218 they've leaving out the 250M in debt. Guess I could be wrong.

I'm sorry but read back what you wrote here and try to make any sense of it. The Devils now own their own arena and their value not factoring in debt is only going to jump 70 million? Especially considering that franchise values have been continually rising.

Edited by Triumph

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Apparently according to Forbes they value isn't always increasing in this case according to Forbes it went down slightly this year.

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If the debt wasn't included in the value then the franchise would have increased by at least $250 million. Nobody borrows 250 mil to finance a project that's only worth 100 mil. You do borrow 250 mil to add 350 in asset value to net an additional 100 mil in value. To just use round numbers.

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If the debt wasn't included in the value then the franchise would have increased by at least $250 million. Nobody borrows 250 mil to finance a project that's only worth 100 mil. You do borrow 250 mil to add 350 in asset value to net an additional 100 mil in value. To just use round numbers.

you're not factoring in empty seats though.

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When you get down to it, the minority partner wants out of the arrangement and has to find a buyer for his stake or the whole stake. Gilfillan can push, shove and drag this out in court if he wishes but given the structure of the franchise's in the NHL I can see that backfiring against him. I would keep in mind while this all goes on that any sale must get approved by the NHL and they have in the past blocked moves. I have no idea of JVB's relationship with the league but I have to imagine it's better than that of Gilfillan.

Edited by newarkdev01

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Its no secret Devils are losing money..... Ive seen food concessions close this season and not re open. and what happened to the Devils alley pub? lack of interest and sales, that's what. Being in last place and a bad winter has hurt the Devils this season!

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Its no secret Devils are losing money..... Ive seen food concessions close this season and not re open. and what happened to the Devils alley pub? lack of interest and sales, that's what. Being in last place and a bad winter has hurt the Devils this season!

That plus it's so well-hidden I doubt most people even realize we have an Alley Pub :P There's like one or two signs for it, and one's far away from it plus both blend in too well with the wall so they're not that noticeable.

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Its no secret Devils are losing money..... Ive seen food concessions close this season and not re open. and what happened to the Devils alley pub? lack of interest and sales, that's what. Being in last place and a bad winter has hurt the Devils this season!

they don't run the food concessions. Centerplate does. and Centerplate has been hurting for years

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For any of the knuckleheads still fearing the team might move:

One of the questions that I have received most often since the news broke two days ago that at least part of the Devils is up for sale concerned whether there is any way this could result in the team leaving New Jersey.

The answer to that is no.

Although Brick City Hockey LLC, which is headed by Ray Chambers and his son-in-law, Mike Gilfillan is looking to sell its share of the team, any sale of that share of the team would be packaged with team’s arena rights.

On Jan. 25, a letter was sent out by Moag and Co., a Baltimore-based investment bank, on behalf of Brick City to prospective buyers.

The first sentence of the letter read: “This firm has been engaged by the New Jersey Devils of the National Hockey League to act as a financial adviser with respect to the current capitalization of the Devils and the Prudential Center.”

In essence, whoever buys Brick City’s share of the team would also be buying its share of Devils Arena Entertainment.

If that wasn’t enough, the Devils are in the third year of a 30-year lease at Prudential Center. So, clearly, they are not leaving New Jersey.

A league official told me that there is no concern at all in the league offices about the future of the Devils in New Jersey.

Another interesting note:

Contrary to other reports, Devils president and general manager Lou Lamoriello does not own any share of the team. Lamoriello did own part of the team when John McMullen was the majority owner, but has not since the team was sold to YankeeNets/Puck Holdings in 2000.

http://blogs.northjersey.com/blogs/fireice/even_if_sold_devils_wont_be_leaving_new_jersey/

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re: lou's ownership.

it might not be in lou's name, but lou has stock in SOMETHING that owns part of the devils. I'm sorry that i don't know the specifics. I just know that he has a piece of the devils - probably as a partner in some other entity. that way he can say "i don't own part of the devils. - oh but i am a partner in a group that does."

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If the entire club was sold at once, Chambers and Gilfillan would have an easier time getting a good price for their shares. But Vanderbeek said he wanted to keep his stake in Devils Arena Entertainment, which owns the team and operates the arena.

So a showdown is under way, with two board members who don’t own stakes in the club — Patrick Hobbs, the dean of Seton Hall’s law school, and Arthur Ryan, the former chief executive of Prudential Financial — trying to broker a solution, according to a person with knowledge of the partnership.

This could include Vanderbeek’s buying out Chambers and Gilfillan, or another investor taking their shares. The price is the key. According to Forbes, the Devils were worth $218 million last year, down 2 percent from 2009. The team had debt equal to 115 percent of its value.

NY Times: Sell or Build? Devils Owners Clash Over How to Proceed

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If the debt wasn't included in the value then the franchise would have increased by at least $250 million. Nobody borrows 250 mil to finance a project that's only worth 100 mil. You do borrow 250 mil to add 350 in asset value to net an additional 100 mil in value. To just use round numbers.

I bet your wrong here because aren't you saying the value of the team is the 218M + 250M (to offset the debt) in other words the overall value is 468M, I highly doubt that.

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I bet your wrong here because aren't you saying the value of the team is the 218M + 250M (to offset the debt) in other words the overall value is 468M, I highly doubt that.

I bet he's not wrong, because that's not what he's saying. He is saying that businesses often incur debts like this for future profits - why else would a break-even enterprise be taking out 250M worth of loans? To make more money. Owning an arena is generally a profitable enterprise. This explains part of the rise in the Devils' value despite incurring a substantial amount of debt.

Edited by Triumph

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I bet your wrong here because aren't you saying the value of the team is the 218M + 250M (to offset the debt) in other words the overall value is 468M, I highly doubt that.

No. I said something more like the team is worth 115M + 350M arena value - 250M debt value. That ignores all present and future values and such to try and simplify it.

Edited by Devils731

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No. I said something more like the team is worth 115M + 350M arena value - 250M debt value. That ignores all present and future values and such to try and simplify it.

:cheers:

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Reports that Bon Jovi is looking to buy a minority interest in the Falcons. Why not pump that money into your home state?

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