Reports from multiple sources have surfaced that the National Hockey League will take control of the New Jersey Devils before the 2013-14 season starts. It will happen before the teams start cutting payroll checks for the upcoming season starts if a buyer is not found before then.
The team has been troubled by debts totaling $230 million and owner Jeff Vanderbeek is already late on paying back a recently restructured loan. Attorney Andrew Barroway’s recent attempt to buy the club failed due to cash-flow issues. (Barroway did lend the team $30 million and was in the running according to the Bergen County Record to be the buy the team until a Forbes magazine report said otherwise.)
The Prudential Center (the place where the Devils play) has also had a downturn in attendance for non-hockey related events. (These events also help the franchise get more revenue to the team.) Some sources say that the arena did not have the money to book the high-end entertainments names after being the 11-th busiest in 2011.
The NHL is hoping that the Devils don’t declare bankruptcy like the Phoenix Coyotes did (and the drawn-out fiasco that followed.) From Forbes:
According to three sources, the NHL does not want the Devils to file for bankruptcy like the Phoenix Coyotes did in 2009. The Coyotes were recently sold for $170 million after going through an arduous lease renegotiation with the city of Glendale that kept taxpayers, players and fans in limbo for over three years.
Instead, the NHL would fund and operate the team while it sought a buyer. The Devils owe the league roughly $25 million and their payroll for the start of 2013-14 season is projected to be around $55 million.
There is some good news. Philadelphia 76ers owner Josh Harris has already expressed interest in buying the team. (Coincidentally, Barroway was part of a group that tried to buy the Sixers, but lost out to Harris.) The last paragraph of the Record article is one that will put the Devils fans at ease. Harris has already stated that he will not relocate the team if he does become owner of the team. There are plenty of other buyers if Harris can’t enough capital to buy the team. (Cue up the rumors of Quebec City, Hamilton, Seattle, Oklahoma City, etc.) However, I doubt that the team will be going anywhere.
The team also looks more attractive now that it doesn't have to pay Ilya Kovalchuk $77 million that was left on his contract. Also, the Newark City Council probably won’t need as much convincing and have to go through as much political red tape as the league had to go through with the Glendale City Council.
UPDATE: The NHL has issued a statement saying the league has no plans to take over the team and says owner Jeff Vanderbeek is in negoatiations with parties in hopes of buying the team.