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June 28, 2013 | 12:32pm ET [Updated: 1:16pm ET]
Devils "in process" of being sold
 The New Jersey Devils are a franchise in financial turmoil, so much so that the NHL has stepped in to run the organization.

TORONTO, ON -- If you thought the Phoenix Coyotes were the only team in the NHL with issues, give your head a shake. Unfortunately, I'm not kidding.

Unlike the Coyotes' obnoxiously annoying situation, there is a plan in place to remedy the predicament the New Jersey Devils have put themselves in.

It's no secret within the inner circles of the NHL that the Devils have been in financial hardship for a long time. They've missed numerous loan repayments, have sought out several investors, and pleaded with the NHL to take it easy on them.

Devils owner Jeff Vanderbeek was closing in on a deal in August 2012 to retain control of the team, and push off debt deadlines. It took a few months to finalize, but in early-January, Vanderbeek had refinanced the team's debt and became the sole owner of the club.

"Today's announcement is good news for Devils fans, though I fully recognize (their) frustration with the work stoppage," Vanderbeek said in a release at the time of the new deal. "Our future is now secure and we can be confident of continued on-ice success."

Let's read that last part again...

"Our future is now secure (oh, really?) and we can be confident of continued on-ice success (if we can afford to keep our players)."

Okay, so I did a little editorializing by adding those words in brackets.

Our sources affirm what you've heard before; Vanderbeek has put the Devils in dire financial straits. According to a Forbes report published last Thursday, Vanderbeek has $230 million of total debt tied to his ownership of the team and Prudential Center. Three days before that, the New York Post reported the team missed its first $3 million debt payment in April.

Simply put, the Devils are in one giant mess.

According to numerous sources, the Devils were even late on paying their players at points this past season. They never missed a payment, I'm told, but some payments were indeed "delayed."

It's gotten so bad, the NHL has since taken over and is operating the franchise, which is making it extremely difficult for Lou Lamoriello to do the "GM" part of his job.

On Wednesday, the NHLPA sent out a note to its membership concerning the state of the team, and informed them that they are monitoring the situations of both the Devils and Coyotes, and are taking both matters extremely seriously. A second memo was released on Thursday.

But like I said earlier, there is a light at the end of this ugly tunnel.

Back on Aug. 16, 2012, we first reported the Devils were in discussions with a group led by Calgary billionaire Bill Gallacher about purchasing a large portion of the franchise.

Gallacher, who owns the WHL's Portland Winterhawks, tried to buy the Dallas Stars before losing out to Tom Gagliardi.

Talks were ongoing for months, but without getting into all the details (mainly because we don't know all of them, as we shouldn't), Gallacher is no longer in the mix. That's been confirmed by a League executive.

So who is the latest white knight coming over the Goethals Bridge to save the day? Well, there appears to be multiple players involved.

One of the new groups in the mix to purchase the Devils -- and, yes, keep them in New Jersey -- is headed up by some deep pockets on the U.S. West Coast that have much experience managing sports franchises. They have the financial wherewithal to run the team competitively, but are willing to buy only at an under market price. This group was hoping to have a deal ironed out by the June 30 NHL Draft. That is no longer the case and a revised mid-July date is being targeted.

However, the other group (which was highlighted in the NHLPA's memo) led by local attorney Andrew Barroway, who loaned Vanderbeek $30 million, and needs more time to close their deal.

While it's great to see the Devils' franchise finding new ownership -- we're told Vanderbeek could stay on in some capacity, but it's unclear what type -- but if things aren't resolved by July 5, the Devils risk losing several key members of their roster to free agency.

They've agreed to terms with Dainius Zubrus, as first reported Wednesday night by Tom Gulitti of the North Jersey Record, but contract talks between Lamoriello and Patrik Elias, and between Lamoriello and David Clarkson, have yet to get serious. Elias and Clarkson's camps have had conversations with the Devils, but as one team source told me, "Lou's hands are tied." The sides will speak during the Draft.

Some are hoping that whoever takes over the Devils can step in a restructure the overall operations of the club. This team has been poorly marketed forever YEARS. They do next to nothing to promote their players to the local community and nobody was surprised to hear that Stanley Cup playoffs tickets were still available last season.

Unless poop hits the fan (wasn't Phoenix supposed to be resolved three years ago?), it sure sounds like the Devils' woes are coming to an end, and for most, it can't come soon enough.

One source close to the situation told me "things are still in the process" of being ironed out, but there appears to be one more hurdle. According to another source, there seems to be some ambiguity on who holds title to the team. Is it the NHL? Is it Vanderbeek? What about the banks?

Once that gets figured out, either Barroway or the West Coast group should be able to finalize their deal with ease, but if title can't be cleared quickly, they'll likely walk away, giving the NHL a sense of urgency to align all parties.

Sadly, it might cost Devils a shot at the playoffs next season, but I guess that'll be a casualty of a long, too far drawn out financial war.


Updated: 1:16pm ET

The second memo sent out by the NHLPA has since been obtained by Forbes. Part of it is below, and has been confirmed to TFP by a member of the NHLPA:

"The New Jersey Devils and the current ownership group headed by Jeff Vanderbeek have recently been experiencing serious cash flow issues. This has resulted in late or missed payments (including required pension and escrow payments) and League intervention and funding. Importantly, we believe that all money owed to Players, including pension and escrow, has now been paid.

“Recently, the Club was able to arrange a significant infusion of debt capital ($30 million) from an investor that is interested in purchasing the the Club from Vanderbeek. We understand from League officials that the new investor, Andrew Barraway, is currently negotiating with Vanderbeek and their expectation is that either Barroway or another ownership group will end up owning the team within the next 120 days or so.”

David Pagnotta is the Editor-in-Chief of The Fourth Period Magazine. Follow him on Twitter.
 

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