It’s been quite a couple of weeks for Gary Bettman: He finally got the Phoenix Coyotes sold and, on Thursday, managed to accomplish the same for the NHL’s other big financial headache, the New Jersey Devils.
However, since the NHL commissioner is always economical with the details of these transactions (and it is always made clear to new owners to follow suit), it is hard to tell if the fix is as deep and effective as all concerned like to make out at the happy news conference announcing the sale.
Watch: Bettman discusses sale of New Jersey Devils
“There’s been a lot of speculation and most of it has been wrong,” was all Bettman said Thursday about the sale price of the Devils.
A day earlier, though, someone well-versed in the proceedings was telling reporters in New Jersey that soon-to-be-former owner Jeff Vanderbeek would get “more than $320-million” for the Devils and the operating rights to the Prudential Center from Josh Harris and David Blitzer, who head a group that also owns the Philadelphia 76ers of the NBA.
However, no one in NHL or investment-banking circles your agent spoke to believed that whopper.
Bettman and the new owners turned aside several requests for clarification on the financial details of the sale during Thursday’s news conference.
What has not been denied is Vanderbeek ran the debt on the franchise to more than $200-million (U.S.), thanks to payments to the City of Newark to build the Prudential Center and to cover operating costs when hockey fans did not rush to fill the new arena.
A precise figure is hard to pin down, as new debts seemed to surface regularly – such as $30-million to Philadelphia hedge fund manager Andrew Barroway, who made a loan to Vanderbeek before backing away from a bid to buy the club. There may be a similar amount owed to the NHL, since it has been helping pay the bills for some time.
It is common in such situations for the new owners to simply assume a franchise’s debts, with the former owner retiring from the field sadder but wiser. It is not unknown for the ex-owner’s creditors to take a thumping as well.
Sometimes, the best a departing owner gets is a vague promise for a payout should the franchise start reaping big profits some day.
Vanderbeek had been trying for several years to find investors but still maintain control of the franchise. That went as well as it always does because, for some reason, rich guys are always loath to hand over money with no say in how it’s spent.
The now-ex-owner will allegedly keep a small share of the franchise and Harris said he will remain with the organization as a “senior adviser,” but there was no sign of Vanderbeek on Thursday. (A long list of former NHL honchos can tell Vanderbeek how those “senior adviser” positions go.)
In any event, Bettman is to be congratulated for pulling Harris and Blitzer out of his hat just weeks after a deal with Barroway – the most promising of Devils would-be saviours in years – fell through. At this point, the only major financial headache remaining for Bettman is the Florida Panthers, another chronic basket case – which is pretty good by NHL standards.
Harris and Blitzer, who both got rich by managing rich people’s money, described themselves as “Jersey guys.” And they knew enough about Devils fans to quickly to reassure them team president and general manager Lou Lamoriello is not going anywhere. Since Lamoriello became GM in 1987, the Devils have been a contender, winning three Stanley Cups and appearing in two other Cup finals.
But one corporate move will see 76ers chief executive officer Scott O’Neil, who knows Lamoriello from his days running Madison Square Garden in New York, become CEO of the Devils and the company that operates the arena (Devils Arena Entertainment).
Once he was satisfied the new owners were committed to winning, he was willing to stay, Lamoriello said. “That was my major question. Everybody wants to win, but not everybody knows how. I felt they know how and in the right way.”
Harris said he and his partners were attracted to the team because they believe there is growth ahead for both Newark and the NHL. “I think the NHL is going to experience long-term growth and I want to be part of it,” he said.
Bettman sincerely hopes he is right.