One league-owned NHL team leaves, another enters? No sooner had the league finally divested itself of the Phoenix Coyotes than it looks like it’s going to have to take over running another cash-strapped franchise:
The New Jersey Devils are likely to be taken over by the National Hockey League around the time the season begins next month when teams begin cutting payroll checks unless a buyer for the team quickly steps up, according to multiple sources…
The Devils have $230 million of debt and team owner Jeff Vanderbeek missed the first payment on a recently restructured bank loan. The team’s annual debt payment is around $15 million a year and in the past the Devils have already used prepayments of future revenue streams to pay bills. Andrew Barroway was poised to buy the hockey team and operating rights to the Prudential Center, but withdrew his offer within the past two weeks after getting a closer look at the team’s books.
That’s Michael Ozanian writing in Forbes yesterday, after which NHL commissioner Gary Bettman immediately retorted that it was lies, nothing but lies:
“I haven’t seen the Forbes report, but if the suggestion is we’re going to take over the Devils, which is what I’ve heard the report says, it’s not accurate,” NHL commissioner Gary Bettman said today following a Yankee Stadium news conference to promote the two outdoor games to be played there – Devils vs. Rangers on Sunday, Jan. 26 (12:30 p.m.) and Islanders vs. Rangers on Wednesday, Jan. 29 (7:30 p.m.) Although Forbes reported that a group headed by attorney Andrew Barroway had dropped out of the bidding, two sources insisted that group was still heavily involved and trying to buy the team. That group has already invested more than $30 million in the Devils in beginning the process of buying at least a controlling share of the team from current owner Jeff Vanderbeek.
So, you know, who the hell knows?
The interesting thing here is that the Devils just got a new arena, the Prudential Center in Newark, that was supposed to solve all of their money problems. But apparently Vanderbeek’s money problems — he made his fortune as an executive at Lehman Brothers, which turned out not to be the most secure career path — have landed him in so much debt that he can’t even make money off a brand-new building that taxpayers fronted most of the money for. Writes Ozanian:
Non-NHL events are down at the Prudential Center, also hurting Vanderbeek’s financial situation. One reason: arena operators prepay a portion of the money they are going to pay acts, like rock bands and the circus, and sources say the Devils do not have the cash to book events. During the first quarter of 2013 the Prudential Center was not among the world’s top 50 busiest arenas. The prior year it was ranked 11th-busiest. In the mid-year ranking the Pru is ranked 33rd.
Having cash flow is important, but it’s also worth noting that in 2012, the Prudential Center didn’t have to compete with Brooklyn’s Barclays Center, which is now the nation’s busiest arena. Even in a metro area like New York City’s, there’s a point at which the arena business becomes a zero-sum game, and you have to wonder if Newark has now been leapfrogged by Brooklyn as concert acts’ preferred second stop in the tristate area after Madison Square Garden. Which makes it all the weirder that the owners of MSG and the Barclays Center are fighting over the right to revamp Nassau Coliseum, but maybe they figure better to take over a superfluous arena yourself than let it go to the competition.