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Report: Devils owner close to deal with lenders

Aug 16, 2012, 1:49 PM EDT

Jeff Vanderbeek Getty Images

According to the New York Post, Devils owner Jeff Vanderbeek is on the verge of reaching a deal with lenders that would allow him to retain control of the club for at least two more years.

The proposed deal would buy Vanderbeek — who has been trying to scrounge up cash to pay off overdue loans — another two years to either refinance the team’s debt or sell the club, sources said.

The deal calls for combining the team’s debt with separate loans against Devils Arena Entertainment, which collects concession revenue from Prudential Center events, into a single $160 million loan.

The former Lehman executive dug into his own pocket to inject fresh cash into the team and raised enough from new investors to pay off a few lenders who do not want to participate in the proposed restructuring, sources said.

The Post reports the deal could still collapse, which could force the Devils into bankruptcy.

However, The Record explains why bankruptcy is unlikely for now:

A source said Vanderbeek has already worked the debt down to less than $35 million and raised roughly half of that remaining figure, leaving him needing about $18 million more to fully cover what the team owes the banks. If the lenders were to push the team into bankruptcy, they would likely recover much less than that. That gives them every reason to give Vanderbeek the time he needs to raise the rest of the money the team owes.

Obviously the lenders will be watching the CBA negotiations closely. According to Forbes, New Jersey is a money-losing franchise, so a lockout shouldn’t hurt the bottom line too badly. In fact, it may help it. And if the owners can score a better deal from the players, Vanderbeek’s prospects of repaying the debt will improve.

  1. barkar942 - Aug 16, 2012 at 3:21 PM

    Guess they should hope for a lockout. Losing Parise should help move them from Stanley Cup Finalists to about thirteenth in the east, so at least the lockout would help them retain their “first losers” title for an extra year.
    Just kidding, Devils fans. However, there hasn’t been very much positive player movement on their roster.

  2. alexb64 - Aug 16, 2012 at 6:15 PM

    This sounds like one of those couples swimming in debt trying to keep an expensive house by any means necessary despite everyone telling them it’s in their best interest to sell it before they just get foreclosed on. “Good news kids, we’re keeping the house! I’m not sure if we’ll be able to have food or electricity in it, but we’re keeping it!”

    I have to imagine the best thing for the team & fans, much like The Mets is if ownership swallows their pride & sells to someone that won’t need to pray for loans & debt consolidation just to KEEP the team.

  3. 950003cups - Aug 16, 2012 at 8:04 PM

    If the CBA was valid for 2-3 more years, the NHL would have 10 more teams in the same debt. Teams would be folding left and right. The players aren’t the problem. Its the GMs who find themselves battling for top talent with hundreds of millions of dollars and hope the money will come in. the cap and the players share of revenue can be a bit lower. But the contract years has to be held to a 6 year max. Or make the cap and the actual paid salary the same. That’ll stop all these whopper deals. They’re bad for the league.

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