The New Jersey Devils have found themselves in financial hot water, according to a report in the New York Post. They're in default on a loan and could be declared bankrupt. Via the Post:
New Jersey Devils Close To Bankruptcy, According To Report
The attendance-challenged, heavily indebted team missed its Sept. 1 loan payment, giving its lenders a breakaway chance to push the team into bankruptcy, a source with direct knowledge of the situation said.
“The Devils are blowing up,” the source said.
The team’s financial hardships could also affect Newark’s four-year-old Prudential Center, the Devils’ home arena. Team-owned Devils Arena Entertainment operates the $375 million building and guarantees the Devils’ loans and, therefore, is in danger of also going bankrupt.
Minority owner Ray Chambers has attempted to sell his shares of the team for months, but those attempts have been much less than successful. Meanwhile, majority owner Jeff Vanderbeek, who also acts as one of the public faces of the Devils’ front office alongside general manager Lou Lamiorello, has reportedly told the banks to “get lost,” writes the Post. It appears as though investors are not too happy with Vanderbeek these days, and that certainly doesn’t help Chambers’ sale effort.
If bankruptcy is declared, the team will have 180 days before lenders can repossess the club and force a sale. The Devils owe about $100 million, further complicated by the $180 million owed by Devils Arena Entertainment.
It’s not as if things are getting any easier, either. The NBA lockout has shut the New Jersey Nets out of Prudential Center, and if they are to miss the entire season, the arena would lose 25 percent of its events for the year. That’s a lot of money. The location of the building doesn’t bring any favors either, as there are plenty of other venues in the area competing with The Rock for events, including Izod Center, the former home of the Devils.
The presence of the Nets is the only thing keeping the arena group in the black. You know, the basketball team that never intended to play a game there in the first place, but only did so when the lagging construction of their new home in Brooklyn and a less-than-ideal setup at Izod necessitated it.
Of course, that begs one large question: Can Prudential Center, and thus the Devils, be profitable once the Nets leave for good? This was set to be their final season in Newark anyway. Those questions are still up in the air, but for now, financial documents in the Devils’ offices look quite a bit like those home red jerseys.
For more on the Devils, on the ice and off, check in with SB Nation’s In Lou We Trust.
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