NHL Could Seize Control of New Jersey Devils, Update: NHL Denies Report
UPDATE: Monday June 18, 2012 9:02 P.M
The NHL is denying a New York Post report that Commissioner Gary Bettman is making preparations for the league to take over the financially troubled New Jersey Devils if they can't restructure their debt over the next month.
I don't anticipate either the league having to take over the team, or the team having to file for bankruptcy," NHL deputy commissioner Bill Daly told USA TODAY Sports in an email.
The New Jersey Devils' monetary problems are well-documented and will be a big talking point as Zach Parise ponders free agency.
It has been estimated that the Devils owe in excess of $300 million in total debt and loans, including a $77 million loan that is due this summer. The Devils made headlines when they missed a loan payment in September and were deemed to be on the verge of bankruptcy.
However, it now appears that the NHL could seize control of the Devils if the downward spiral continues.
Greg Wyshynski of Puck Daddy cites a New York Post report in which Gary Bettman and the NHL would take over the team:
Well, the NY Post did what it always does for Devils ownership stories: Provided needles for those party balloons.
In an exclusive on Monday, John Kosman reports that the NHL is preparing to take over the Devils if the excrement hits the oscillator in August:
NHL Commissioner Gary Bettman is preparing to take control of the money-losing hockey franchise in the event (Jeff) Vanderbeek fails to refinance the Devils' debt before a looming Aug. 14 deadline, The Post has learned.In recent days, the commissioner's office has told potential suitors to be ready in case he moves on the team and pushes Vanderbeek aside, a source close to the situation said.Vanderbeek is near a deal to sell a majority stake to a mystery investor, which would allow him to keep control of the Eastern Conference champions, one source said. The proceeds from a sale would be used to repay lenders much of the $77 million in past due debt.
Puck Daddy went on to address more elements of the report:
Bettman noted at his "state of the NHL address" on May 30 that Vanderbeek was working on an "equity raise" for the team that he hoped he could "pull off" in the next few weeks.
The Post reports that Bettman and the NHL would likely take over before the August deadline "to give suitors enough time to study the team's financials and make an offer to lenders before the bankruptcy deadline, according to sources."
This is probably the NHL signaling that taking over the Devils would be the last resort; and not necessarily that any solution to their ownership and debt problems is falling apart.
It's a Plan B...and even then, Vanderbeek could buy himself some time by placing the team in bankruptcy.
With this news coming out, it will be interesting to see how the Devils respond to these allegations and whether it will impact their ability to resign Zach Parise.
Lou Lamoriello insisted back in February that the team's finances wouldn't prevent management from re-signing Parise. But at this point, it looks like the best thing the Devils could do is attempt to trade Parise's rights to one of the teams rumored to have a strong interest in him due to reports indicating that the Devils' investors could back out.
The Devils have over a month to address their financial state, so hopefully, Jeff Vanderbeek can finalize a deal to sell a portion of the team and allow him to interject fresh funds into the financially struggling franchise.
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