Kukla's Korner Hockey
by George Malik on 06/18/12 at 02:16 AM ET
The New Jersey Devils are supposedly—if I recall the Globe and Mail’s David Shoalts and SI’s Stu Hackel’s reports—in significant need of an infusion of at least $77 million to help pay off a chunk of over $200 million in arena-construction debts this summer, and while the Newark Star-Ledger’s David Giambusso reported that the Devils earned $32-plus million during their playoff run, things remain very financially shaky for the franchise and its players.
According to the New York Post’s Josh Koshan, despite Devils owner Jeff Vanderbeek having found a potential investor to help finance said debts, but the NHL wants to make sure it doesn’t have another Phoenix on its hands, and as such, they’re going to kick Vanderbeek to the curb:
Hockey is getting ready to freeze out New Jersey Devils owner Jeff Vanderbeek. NHL Commissioner Gary Bettman is preparing to take control of the money-losing hockey franchise in the event Vanderbeek fails to refinance the Devils’ debt before a looming Aug. 14 deadline, The Post has learned.
In recent days, the commissioner’s office has told potential suitors to be ready in case he moves on the team and pushes Vanderbeek aside, a source close to the situation said.
Vanderbeek is near a deal to sell a majority stake to a mystery investor, which would allow him to keep control of the Eastern Conference champions, one source said. The proceeds from a sale would be used to repay lenders much of the $77 million in past due debt. But while Bettman has said publicly that he expects the Devils’ financial situation to be resolved soon, his behind-the-scenes moves suggest he’s far from confident that a deal will get done.
His skepticism shouldn’t come as a surprise. Since the Devils missed a principal payment in September, Vanderbeek has said several times he was close to a solution to the team’s debt woes, only to come up short. When the team made it to Stanley Cup finals this spring, the team’s lenders agreed to extend the deadline for when they could put the team in default from early July to August, sources said.
And if Vanderbeek puts up a fight, Koshan says that the situation could get even uglier:
Faced with losing control of the team, Vanderbeek could also decide to put the Devils into bankruptcy and buy himself several months to arrange a restructuring plan.
Thanks to their success on ice this year, when the team staged an upset win over the New York Rangers in the Eastern Conference Championships, the Devils could go from losing $20 million in the regular season to almost breaking even next year, sources said.
That’s swell and all from a day-to-day financial perspective, but if you’ve still got a wee bit over $120 million in arena debts, can “break even” and don’t qualify for revenue-sharing checks, you’re not exactly sitting pretty.
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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.
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