NEWARK, NJ - OCTOBER 08: New Jersey Devils team owner Jeff Vanderbeek meets with fans prior to the season opening game against the Dallas Stars at the Prudential Center on October 8, 2010 in Newark, New Jersey. (Photo by Bruce Bennett/Getty Images)
Yesterday's bankruptcy scare churned up some talk on the Devils' business side of things. In this age of information, sports fans are becoming more interested in the financial outlook of their respective teams. Free agency evolved into the biggest part of the off-season (my elders tell me that once a player was drafted, he usually stayed on that team baring a trade...no matter what sport). Leagues have salary caps, floors, minimums, maximums, and so on. Fans aren't just interested in player X's stats and the team's overall record season after season; they want more, as much as teams and reliable news agencies are willing to give us. Sites like Capgeek, that concentrates on the NHL players' salaries and each team's salary cap is further proof. Moreover, fans are even getting interested in the overall ownership, marketing and outreach, and business operations for their teams.
It makes sense. Sports players are paid a lot of money now these days- there needs to be someone who has that actual money. Fans want the best for their team; the best (the more expensive) players. So fans care about said someone with the money and what's going on with him/her and it. Fans want to make sure that the operations and ownership are running well enough to the point that fans actually don't have to worry about it and feel confident about the team's financial stability - so I guess they only have to worry about player X's stats and the team's overall record.
For the New Jersey Devils, it's time we sit down and go over some things that have happened over the years. In this age of information, it's that time to consolidate everything to get an understanding of the financial and ownership standpoints of the Devils.
Here at In Lou We Trust, we have been doing some cool history posts over the off season, so why not keep that theme up. One of the biggest, if not the biggest ownership/business fiasco with the Devils was way back in 1995.
Spring 1995 - I was too young to really understand what happened between the Devils and the NJSEA in 1995. The late Dr. John McMullen, a Jersey City native owned the team from 1982 to 2000, had lease disputes, problems with an aging Meadowlands Arena, and a sub-par contract with the NJSEA. On top of that, he was given a deal of a lifetime - to move the team to Nashville and get just about everything he wanted. The problem was, he always wanted what was best for the Devils, and that was to keep them in Jersey.
Here's two articles: one from 1995 during the dispute and another in 2000 during the Stanley Cup Finals, shortly after McMullen agreed to sell the team. Pretty interesting if you ask me. I wasn't aware of a potential arena in Hoboken, the actual deal Nashville presented the Devils, and the fact that Bettman was on the Devils side! McMullen's dream of a brand new, state of the art arena operated by the team did come true, just not in his time.
June 2000 to March 2004 - McMullen sold the team for $175 million to PuckHoldings, which was owned by YankeesNets. They kept a hands off policy in terms of operations, in which Lou Lamoriello took over more duties. Ray Chambers was the head of PuckHoldings, along with Lewis Katz. Jeff Vanderbeek was only a minority owner of at the time; he was busy with Lehman Brothers. In 2004, Vanderbeek would purchase majority interest and become Chairman, and YankeesNets would disband. The season before the 2004 lockout, the Devils were worth around $145 million and from the link above were near $70 million in debt. Vanderbeek was an advocate of McMullen's dream arena since 2002 - yet now with more power, an arena in Newark looked imminent.
October 2004 - And only a few months later, that deal was set. Newark officials, the Newark Housing Authority, and the Devils approved and agreed to build a new arena by October 2007. With every big time construction project, there will be trouble with zoning rights and individuals evaluating risks involved in the contract. One year later, groundbreaking would occur.
2006 to 2007 - Newark officials were concerned over the funding of the arena and revenue sharing once the arena was completed. Vanderbeek and newly elected Newark Mayor Cory Booker worked to finalize the deal. The Devils invested $100 million to the project (The city invested $210 million) and both parties worked out a fair revenue deal in the coming months. Prudential Financial picked up naming rights ($105 million over 20 years) that helped cover overlaying costs. The arena cost an estimated $375 million when completed. The arena opened in Fall of 2007. During this time, the Devils also purchased the ECHL franchise based out of Trenton.
November 2008 - The Newark Housing Authority and the Devils were on the rocks just after a year the arena opened. The NHA argued the Devils owed them rent (the site and arena is owned by the NHA), yet the Devils said the NHA violated an agreement (and owed them monetary penalties) with surrounding building and projects delays. There was also a Letter of Occupancy problem. It looked like it would go to arbitration in the coming month.
March 2010 - The Nets agreed to move to Newark to play at Prudential center for two seasons. After, they will move to Brooklyn, NY. This attracted new fans to the arena as well as revenue for the Devils and the NHA. The Nets would pay rent and share revenue on tickets.
May 2010 - Yet again, there is more disputes between the NHA and the Devils over unpaid rent and delayed projects. They agreed to agree with the arbitrator, which was close to being finalized. Mayor Booker, Vanderbeek and the NHA met many times to get things straightened out. Up until now, there has been no update on this issue.
Summer 2010 - The Devils sign Ilya Kovalchuk to a 15 year, $100 million deal. This was a big investment for one player, and further strengthened a long term financial commitment from Vanderbeek. During the summer, Vanderbeek, along with Mike Gilfillan (who owns Brick City Hockey with Ray Chambers) created Jersey Tour. Fans were able ask detailed questions to owners, alumni, and announcers during the summer. (John's Report and My Report)
February 2011 - There was some big speculation that Jeff Vanderbeek was looking to sell the team. Turns out it was Brick City Hockey (Gilfillan and Chambers) and their share of the team that was looking to get out. The Devils and Vanderbeek issued a statement saying that the team is not for sale. Brick City issued a statement, and said they were seeking the sale of the entire team (Vanderbeek's share as well) which they could do under a clause in their contract with Vanderbeek.
June 2011 - The NHL announced that the salary cap would increase to $64.3 million for the 2011-2012 season, an increase of nearly $5 million. Devils fans were filled with joy, creating more room for the Devils to sign free agents. More speculation arose when Brick City was asking for $250 million for its 47% control of the Devils. Vanderbeek and Brick City issued a joint statement saying that was untrue, and that both were in talks for Vanderbeek to purchase Brick City's share. The article also announced that Devils Arena Entertainment (the official company that owns the Devils (Vanderbeek's share I believe) and operates the arena) will make a profit for the first time (since Prudential Center opened). Bettman was quoted on record stating there is nothing to worry about pertaining to the ownership situation with the Devils.
July 2011 - The Devils announced they will suspend the play of the Trenton Devils. The Devils also inked Zach Parise for a one year deal (worth $6 million) with the intent to sign a long term contract.
August 2011 - The Devils traded Brian Rolston and bought out Colin White and newly acquired Trent Hunter. Lamoriello did mention that the team and organization will be on a budget for the coming season. This came as a shock to fans, since this the first time the Devils will have significant cap space post-lockout.
September 2011 - Reports that the Devils are filing for bankruptcy and bummed out on loan payments were shot down by the Devils. A deal that will get Brick City and their 47% sold (whether to Vanderbeek or someone else) is imminent. John has a great write up from yesterday about the bogus report and the statement issued by the Devils.
So there you have it. A lot of news recently that has had us fans concerned in the beginning then brought to the light by some statement later in the afternoon. We as fans have to be interested in this stuff. Though it doesn't seem like this could affect team operations like free agent signings and inking Parise up long term, but we have to keep on it to make sure it doesn't. Let us know in the comments about how you feel about the overall finances of the team, what you want done (money for Parise, duh!). Jeff Vanderbeek could own 94% of the team by the end of the year. Would you prefer this? Would you rather prefer a similar situation where two parties owned an equal amount? Thanks for reading.