It was just Monday that the NHL finally sold the Coyotes after four years of trying. Now it seems the league is getting back into the ownership game—Forbes reports that the NHL is preparing to take over the debt-ridden Devils.
This is absolutely no surprise. The Devils are, depending on who you ask, up to $230 million in debt (that's more than the entire valuation of the team). In December, owner Jeff Vanderbeek refinanced that debt—and four months later, missed an interest payment. In June, Vanderbeek thought he had found a buyer, but that buyer reportedly backed out after getting a look at the team's financial statements.
Though New Jersey has never been among the league's most profitable franchises, this cash crunch not a fundamental problem with the Devils. The personal fortune of Vanderbeek, a former Lehman Brothers executive, took a significant hit when the firm went under. Much of his debt comes from investment in the Prudential Center, which has severely underperformed projections as a non-hockey venue. And don't underestimate the effects of the lockout, which caused otherwise healthy teams like the Wild to end up in the red. (When the Dallas Stars filed for Chapter 11, they cited $70 million in losses from the 2004-05 lockout.)
The Devils are not the Coyotes. There is no danger of relocation. There will be a buyer, eventually. (The 76ers' ownership group is said to be interested.) The only question is whether one will be found before the league has to step in. If not, the NHL's primary mission will not be to field a competitive team, but to get the Devils back into attractive financial shape.
Neither the league nor the team would comment on the Forbes report, which indicates that the takeover could happen before the start of the season, when the first payroll checks are due.
Bettman: "if the suggestion is we're going to take over the Devils, it's not accurate."— Rich Chere (@Ledger_NJDevils) August 8, 2013
Devils will apparently be sold within the next few days.— Rich Chere (@Ledger_NJDevils) August 8, 2013