Comparing the debt-crazed crisis of Devils controlling owner Jeff Vanderbeek to Tom Hicks’ inability to meet interest payments prior to losing the Dallas Stars and Texas Rangers, Forbes’ Mike Ozanian reports the New Jersey Devils are up for grabs, “at a steep discount.”
From working on our NHL team valuations, which will go live on Forbes.com Nov. 30, I can tell you the Devils have over $250 million of debt piled on the team and arena, which they control. The debt is growing because Vanderbeek (above0, unable to make interest payments, is capitalizing the interest.
If this all sounds familiar it is because it should. This is what Hicks Sports Group went through when its $525 million of debt, stacked on baseball’s Texas Rangers and hockey’s Dallas Stars, grew to $600 million because HSG owner Tom Hicks could not make interest payments, ultimately defaulting. HSG sold the Rangers to a group led by Nolan Ryan and Chuck Greenberg in a bankruptcy court-led auction and the Stars are currently being sold through the same process.
Vanderbeek already missed a $100 million principal payment that was due Sept. 1. He was given an extension by the lenders in order to try and raise enough money to buy out co-owners Ray Chambers and Mike Gilfillan, but they wanted no part of it. Vanderbeek can buy some time because technically the team cannot be forced into bankruptcy by creditors until after the Stanley Cup finals. But the longer he holds onto the team the bigger the debt problem because he is not making interest payments.