The New Jersey Devils are not, in turns out, being taken over by the NHL. Rather, they’re being sold by broke former Lehman Brothers exec Jeff Vanderbeek to not-yet-broke former Drexel Burnham Lambert exec (and also Philadelphia 76ers owner) Jeff Harris, who will reportedly pay $320 million for the privilege of owning the team and operating rights to Newark’s Prudential Center.
The Bergen Record calls this “a stunning price for a team that has been mired in debt,” but read a bit further and it’s actually not all that stunning: Harris isn’t taking on Vanderbeek’s $200 million in debts, just allow him to pay them off and still have a nice chunk of change left over. And the team itself looks like it’s been at least breaking even since moving to Newark in 2007-08, so while this is a high price, it’s not a crazy-high one.
The big question here is how lucrative the arena management rights will be once they’re owned by somebody with the cash flow to actually book concert acts. Things are very different in the NYC arena world than they were in 2007 when the Prudential Center opened: Brooklyn’s Barclays Center has opened, Madison Square Garden has just completed a $1 billion renovation, and even Nassau Coliseum is about to have a redeveloper announced later today. (The Devils’ former home, the Izod Center, is still hanging around too, though from a look at its upcoming concert calendar, it may not be for long.) The New York City metro area is huge compared to any other U.S. city, but even it can be susceptible to arena glut if you have too many venues fighting over too few acts.
If nothing else, the upcoming four-way competition is likely to make concert promoters really happy, since they’ll be able to play arenas off against each other for the best deal like never before. This hopefully won’t have any dire effects on either concertgoers’ or taxpayers’ wallets — just on the bottom lines of guys like Harris — but it’s probably best to keep in mind the saying about the elephants and the grass just in case.