Hats off to the NHL’s answer to Houdini
You’ve got to hand it to Devils owner Jeff Vanderbeek. The man has the escape ability of Houdini. Although Tuesday’s deadline for him to pay his creditors $ 77 million has come and gone and he does not have all the money that he had agreed to pay them, it appears he’ll keep control of his team, get more time to refinance his club and seek new partners.
Now, if you or I owe money to someone, chances are we don’t get to slide as easily. But you and I are not Jeff Vanderbeek and when you owe a massive amount of money, allowances are made. That’s one advantage of being wealthy, or at least understanding how to manage wealth, in our society. Those to whom Vanderbeek is indebted recognize that if they declared him in default and set the wheels in motion to force him into bankruptcy, they might end up with lots of pennies instead of lots of dollars. Giving him more time — as much as two more years according to reports — to either raise the needed funds or sell the team and pay off what he owes means that they stand a better chance of recovering their cash. We should all be so lucky.
Every time we’ve read an account of Vanderbeek’s perils, included in the story is some variation on the phrase, “Don’t underestimate Jeff Vanderbeek; don’t count him out.” Clearly that is true. The man is dogged, resourceful and, ultimately, successful. When it comes to those qualities, the Devils have a good role model in the owner’s suite.
In addition to reportedly merging the Devils’ loans with others against Devils Arena Entertainment, which operates the Prudential Center, into one single $ 160 million tab, Vanderbeek has been hard at work raising money. As The Bergen Record’s Tom Gulitti wrote on Monday, “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….NHL officials have been in frequent communication with Vanderbeek and the banks throughout the process. NHL Deputy Commissioner Bill Daly reiterated via e-mail last week that nothing has happened to change his view that the team would not have to file for bankruptcy and that the league has no plans to take over the franchise.”
Part of the money has come from the Devils’ deep Stanley Cup run last spring, which some estimate netted the club $ 15 million. More came from Vanderbeek’s estranged partner, Brick Hockey LLC (namely, Ray Chambers and Mike Gilfillan) which also owns 47 percent of the franchise, but wants out. Gulitti reports that Brick Hockey paid Vanderbeek an unspecified amount to leave the partnership and some or all of that went toward the debt.
If Gulitti’s source is right, Vanderbeek has also been able to attract at least one new partner into the Devils’ ownership to replace some of Brick’s stake in the club — perhaps it’s the “mystery buyer” who was widely reported as prepared to buy in during the Cup Final. And Vanderbeek is searching for at least one more partner to purchase the rest.”If he is unable to find one,” Gulitti writes, “he could conceivably cover the rest of the debt himself.”
This is all potentially good news for Vanderbeek. The question now is: how much money will he have left to run the Devils?
On the surface, you’d think the team will be OK. Vanderbeek and Devs President/GM Lou Lamoriello certainly felt they had sufficient funds to take a stab at re-signing Zach Parise; it was Parise who decided in free agency to forgo the chance to be a Devil for life and head to Minnesota to play in front of family and friends for the next 13 years at $ 7.538 million annually. They also kept goalie Marty Brodeur for the next two seasons and re-upped defenseman Bryce Salvador.
We may have a better answer about the Devils’ finances after the CBA is negotiated and Lamoriello finds someone to replace Parise — if he does — or a little further in the future when he tries to find a goalie to replace Marty Brodeur, which eventually he must. The 40-year old future Hall of Famer can’t play forever and while Johan Hedberg is a good partner for Marty, he’s 39. There’s no heir apparent in the Devils’ system to stand in front of their goal and lead them into the future. Established top goalies don’t come cheap.
Of course, by the time Brodeur is ready to say goodbye, the Devils’ ownership picture might look a bit different. Considering his resolve, it would be unwise to believe that Jeff Vanderbeek won’t be in that picture.