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Ray Chambers Sells 47% Stake


Derlique

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Great news, sh!tty article because off things like this:

It also means that the billionaire Chambers, through his Brick City operation, is tired of pumping money into the troubled team
Devils Arena Entertainment has debt of roughly $180 million. So, presumably Chambers’ view is the team and arena operations are worth less than that amount.
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According to Chere, he sold it for $25 million. That's extremely worrisome.

The only thing I can think that might be positive is that Vanderbeek squeezed him out - that Vanderbeek was not willing to sell, and given the debt obligations of the team, who the hell else would buy into the team. Seems like a terrible setup in general.

Edited by Triumph
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I think you guys are all reading this wrong.

Chambers is PAYING lenders $25M to get rid of his ownership and cash obligation to support the team. He is not getting $25M!!!

The team is in debt and continually need cash and this gets him off the hook IF IT IS APPROVED.

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oh, that's even worse. i had only read chere's tweet, which is confusing. something isn't making sense here.

Agreed, he believes this team is a negative hole getting bigger. Coming from a billionaire with smart people around him....he may be right.

Edited by Jas0nMacIsaac
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If the debt burden on the team is $180 Million and Chambers was a 47% shareholder then Chambers was responsible for $84.6 Million in debt burden. He got to pay only $25 Million to release his debt burden to Vanderbeek which means he got the equivalent of $59.6 Million for his share of the team which means the team is valued at $126 Million.

Am I correct in my understanding of this situation? The higher the debt and the lower the amount that Chambers had to pay to get out of it the more the value of the share of the team is.

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Interesting news. Terrible paper as usual. I mean is this sh*t necessary:

shaky financial condition of the Newark-based team
mostly money-losing franchise
tired of pumping money into the troubled team
the team and arena operations are worth less than that amount

They literally have at least one negative statement about the team in each paragraph.

Edited by mmajeski06
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If the debt burden on the team is $180 Million and Chambers was a 47% shareholder then Chambers was responsible for $84.6 Million in debt burden. He got to pay only $25 Million to release his debt burden to Vanderbeek which means he got the equivalent of $59.6 Million for his share of the team which means the team is valued at $126 Million.

Am I correct in my understanding of this situation? The higher the debt and the lower the amount that Chambers had to pay to get out of it the more the value of the share of the team is.

that is how i would read it.

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Well if you figure that this sale established the current value of the Devils as $126 Million then to owe $155 Million on that value of business versus $180 Million on that value of business means that you're an awful lot closer to the debt load being equal to the value of the team. 23% higher debt to value ratio is a hell of a lot better than 43%.

And also, the current valuation being determined by this sale is misleading because you're never going to get as good a value for your shares from selling a non-controlling interest. The value of the team if it was sold as a whole is probably higher than $126 Million.

Edited by NewarkDevil5
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Well if you figure that this sale established the current value of the Devils as $126 Million then to owe $155 Million on that value of business versus $180 Million on that value of business means that you're an awful lot closer to the debt load being equal to the value of the team. 23% higher debt to value ratio is a hell of a lot better than 43%.

And also, the current valuation being determined by this sale is misleading because you're never going to get as good a value for your shares from selling a non-controlling interest. The value of the team if it was sold as a whole is probably higher than $126 Million.

I agree,What he essentially got for his shares isn't what the team is worth. He wanted out now and not many people would be lining up to get non controlling interest of a struggling franchise. I would say debt to value is about even at this point or better.

If what JVB said about season tickets are true, a 2nd round of better playoff run should create a ddecent profit to go against the debt and this franchise will look a lot healthier.

Edited by Jas0nMacIsaac
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I agree,What he essentially got for his shares isn't what the team is worth. He wanted out now and not many people would be lining up to get non controlling interest of a struggling franchise. I would say debt to value is about even at this point or better.

If what JVB said about season tickets are true, a 2nd round of better playoff run should create a ddecent profit to go against the debt and this franchise will look a lot healthier.

Well then now I hope we make it deep in the playoffs :giggle:

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Keep in mind the Post was all over the place on the first story, so what you're reading might not be 100% true.

If the sale happened that way, it gets them past the first balloon payment at least, but there's still another in a few years.

And it's nice to see a pump and dumper get screwed.

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Keep in mind the Post was all over the place on the first story, so what you're reading might not be 100% true.

If the sale happened that way, it gets them past the first balloon payment at least, but there's still another in a few years.

And it's nice to see a pump and dumper get screwed.

Who got screwed? Chambers? He got out of a huge financial liability by paying less than 1/3 of what he owed. Vanderbeek? He got increased ownership without paying a dime and while his overall debt-burden went up tremendously, he's now in a position where he could theoretically sell the whole team for a lot more than this transaction valued it at because he now owns 94%. The creditors got their balloon. In all of this I think everyone really won.

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Who got screwed? Chambers? He got out of a huge financial liability by paying less than 1/3 of what he owed. Vanderbeek? He got increased ownership without paying a dime and while his overall debt-burden went up tremendously, he's now in a position where he could theoretically sell the whole team for a lot more than this transaction valued it at because he now owns 94%. The creditors got their balloon. In all of this I think everyone really won.

Chambers is a pump and dumper. He buys distressed/underforming things and tries to flip them for a big profit down the road. Considering he paid his way out of this, he got maimed. Leaving in a bad state to avoid an awful state isn't really a win.

JVB is still screwed down the road. There's another balloon coming and when/if he makes a total sale, it too will be to escape the debt, not to turn a profit.

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