Blog Entry

Report: Devils co-owner pays loan, unloads share

Posted on: September 26, 2011 1:00 pm
Edited on: September 26, 2011 1:00 pm

By Brian Stubits

It wasn't long ago that a report surfaced on the Devils facing bankruptcy, something they denied uncategorically. Bankruptcy or not, it seems clear there is at least something that has to give in New Jersey.

That's part of the reason why co-owner Ray Chambers is looking to get sell his share of the franchise. From the Star-Ledger:

Devils co-owner Ray Chambers is seeking to relinquish his stake in the NHL team as part of an exit strategy aimed to help the financially struggling franchise refinance its debt, according to two sources familiar with the situation.
An organizational source close to the negotiations said the Brick City LLC holding company, operated by Chambers’ son-in-law Michael Gilfillan, has agreed to pay off a $23 million loan to a lender as part of an arrangement that would allow Chambers, a billionaire philanthropist, to give up his 47 percent share in the team. The other main co-owner, Jeffrey Vanderbeek, still owes $23 million from the joint loan that paid for team operations, the source said.

It hasn't been much of a secret that Chambers was looking to remove himself from the ownership of the Devils. It is somewhat odd to see a guy paying to give up his stake of the franchise, but consider that's it's probably mostly all in debt from the Prudential Center, it begins to make a bit more sense.

This can help the Devils move on with their day-to-day operations, getting this matter sorted out. More from the Star-Ledger:

Chambers, along with Gilfillan, have owned Devils Arena Entertainment, which has operated the Prudential Center since 2004. While the Devils vehemently denied reports earlier this month that they were on the brink of bankruptcy, estimates of the team’s reported debt have ranged from $170 million to $190 million.
Vanderbeek will now be able to pursue financing without Chambers, who was looking to extract himself from the organization. A source said negotiations to refinance the team’s debt are ongoing and there was a timetable for Chambers to withdraw himself from the process.

So the financial picture doesn't seem as bleak as it was originally reported.

Now Vanderbeek will control almost the entirety of the franchise and with his loan taken care of, to clear up the money situation. After things get settled, don't be surprised if Vanderbeek were to go looking for another investor to help pay the team's bills. After all, Zach Parise still needs to be locked up long-term.

Photo: Getty Images

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Since: Dec 2, 2011
Posted on: December 15, 2011 7:19 pm
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Since: Dec 28, 2006
Posted on: September 27, 2011 11:29 am

Report: Devils co-owner pays loan, unloads share

it was always going to be a problem since the devils moved into an area that was dominated by ranger, islander and flyer fans. the fan base is growing alot. it was not a mistake since the rock is amazingly easy to get to, a beautiful place, and attendence is rising. it was always going to be a struggle but there was just no future in the swamps beforehand. devils are bringing in more money each year with rising ticket sales. 

Since: Jul 3, 2011
Posted on: September 26, 2011 11:33 pm

Report: Devils co-owner pays loan, unloads share

Building the new arena in Newark was a huge mistake in my opinion.  Granted, you can now take the train to the game and you don't have that far of a walk to the arena but still, it is Newark!  It isn't like lack of attendance is a new thing.  I remember going to a game 7 against the Sabres (don't remember the year) where there were like 6 goals scored combined in the first 6 games.  It was one of the most exciting series i have ever watched as the goaltending was phenomenal.  Anyway, for starters the game was not sold out.  Second, there were a TON of Sabres fans there.

I am not complaining about the attendance because it makes getting tickets to Flyers games a sinch.  However, they cannot last if they don't get their attendance up.  I am not just talking about sold tickets, i am talking about people actually showing up to the game.  It is one of the few arenas where you see more empty seats than occupied seats in the first level.

I think the owners stand a better chance of just raffling off ownership with an in-between periods contest.  Then again, not sure anyone would want it :-)

Since: Jul 1, 2010
Posted on: September 26, 2011 11:12 pm

Report: Devils co-owner pays loan, unloads share

And worse yet is the fact it's only getting worse and not better.
Unless the lenders are willing to eat a big chunk of change (unlikely) on the new arena, it's on it's way to being much worse.    At least this deal will by him a little more time, assuming it goes through. 

Since: Jun 25, 2009
Posted on: September 26, 2011 11:08 pm

Report: Devils co-owner pays loan, unloads share

They're going to need a bunch of cheeks in the seats to make this a long-term instead of short term fix.

But see, that's the problem.  The Devils don't get cheeks in the seats...... last year 16 percent of the seats were empty, only 6 or 7 teams in the NHL did a little worse then that.  And worse yet is the fact it's only getting worse and not better.  The year before last I think what i saw is around 12 percent of their seats were empty and I believe it was 10 percent the year before that....  it's getting ugly now.  And when you look at some of the teams doing worse then the Devils are, you start to really understand how much trouble they are really in.  I mean when basically the only teams worse then you are teams from Florida or Texas or the desert in Arizona or the Islanders that play second fiddle to the NYR's you know you've got problems. 

Since: Oct 20, 2008
Posted on: September 26, 2011 3:59 pm

Report: Devils co-owner pays loan, unloads share

That's the core of the problem- the Devils have never been a money-making powerhouse of an organization.  Even through the championships, the domination of the East, it wasn't as though stores were selling out of Brodeur and Langenbrunner jerseys.  It's a small organization that's relied on good scouting and good coaching.  It's not the Rangers or the Leafs - once the bandwagon fans stop attending, the organization goes into the red, and debts accumulate.

Since: Jul 1, 2010
Posted on: September 26, 2011 1:57 pm

Report: Devils co-owner pays loan, unloads share

Baby steps.    Lou is going to get no help with more personnel or more payroll for the front office until this is resolved.    Hopefully the transactions take place rapidly and smoothly or else there will be more ugliness.    They're going to need a bunch of cheeks in the seats to make this a long-term instead of short term fix.

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