Devil Is In The Details
The guy to the left? That's New Jersey Devils owner Jeff Vanderbeek. He's the guy who bought out his minority partners in January to obtain sole ownership of the New Jersey Devils and the Prudential Center arena. He's also the guy who signed Ilya Kovalchuk for all of the tea in China, but that's his money and he can do with it as he pleases. However, it seems that the New York Post's Josh Kosman knows more about Vanderbeek's wealth - or lack thereof - than the rest of the world does.
I caught this story lurking on the depths of Twitter. Kosman reports that "[t]he New Jersey Devils are again skating on very thin financial ice" after Vanderbeek had obtained a restructured loan to pay down the mounting debts facing the franchise and arena. According to Kosman, Vanderbeek "missed an interest payment" in April "and now risks defaulting" on the loan. The moment I read that, something began to smell a little off.
Having worked in the financial industry for some time, I can tell you that missing a payment of nearly $3 million wouldn't slide under the radar in April only to be discovered in June by a newspaper reporter. No, payments missed of that nature are usually discovered pretty quickly, and banks are notorious for ensuring they get their money, I've heard. So having a payment missed and not made for nearly two months? Unlikely, but more on this below.
Secondly, referencing the 113-day lockout is fine as it certainly wouldn't help in bringing in money when you consider lost ticket sales, parking and concession revenues, and sponsorship monies. But it also doesn't factor in savings such as not paying players, not putting ice in for 113 days, and not having to have concession, parking, cleaning, and other staff at the arena for those 113 days. In short, the lockout's "costs" would be offset by the savings seen in the same situation. Sensationalism in journalism seems to be a New York Post specialty.
Thirdly, if the bank wanted to simply put the loan in default, they will never see the value of the money come back to them in any real form. It's $170 million in money they will never realize unless the team and arena are sold to a new investor, and most people with money will recognize this kind of sale as a firesale where the bank simply wants to move an asset to recover its money. In this case, investors bid low since the bank is desperate to sell.
But here's the key: in allowing Vanderbeek to be tardy on a $3 million payment while he straightens things out with the NHL, the city of Newark, and anyone else he's approached for a monetary solution, the lenders are wise to keep their yaps shut to the press in order to keep everyone's houses in order. The Devils and the city of Newark just reached an agreement that will bring in some solid revenue for at least the next five years. The parking agreement alone is worth $2.7 million annually - just short of the $3 million payment owed. You don't think that money will offset any of the interest payments that Vanderbeek owes his lenders?
It's not like Vanderbeek is sticking it to the people of Newark and his lenders. You can't tell me that you've never put off paying a bill when there are more pressing needs that require your financial attention. We've all done it, and that's what Vanderbeek is doing here. He needs his hockey people to re-sign talented players and attract new talent for a playoff run next season. He needs to ensure that his facility people are attracting top flight attractions and concerts to ensure that the Prudential Center is hopping. These are things that make money that, in turn, pay bills off faster. The $3 million payment? A spit in the ocean when once considers the $170 million still owed to lenders. But to claim a default status would put the entire amount at risk of never being realized.
Honestly, this should be a non-story and I'm kind of embarrassed that the New York Post went after this. Some critical thinking would give way to what appears to be happening in Vanderbeek's situation, but it seems that sensationalism sells more papers than proper journalism. While I'm not in the business of calling out journalists often, this is on case where a small blurb and some research could explain a lot. I guess that's outside the normal job description of "New York Post journalist".
Of course, I could be way off and Vanderbeek could be swimming in red ink as I write this. It's entirely possible that Kosman is more in tune with Vanderbeek's financial situation than even Vanderbeek is. But I gather that Vanderbeek's a pretty astute businessman who knows the value of a dollar and how to make that dollar grow into many dollars, so I just can't see a New York Post journalist knowing more about the owner's finances than the guy writing the cheques.
Doesn't make a lot of "cents", does it?
Until next time, keep your sticks on the ice!
I caught this story lurking on the depths of Twitter. Kosman reports that "[t]he New Jersey Devils are again skating on very thin financial ice" after Vanderbeek had obtained a restructured loan to pay down the mounting debts facing the franchise and arena. According to Kosman, Vanderbeek "missed an interest payment" in April "and now risks defaulting" on the loan. The moment I read that, something began to smell a little off.
Having worked in the financial industry for some time, I can tell you that missing a payment of nearly $3 million wouldn't slide under the radar in April only to be discovered in June by a newspaper reporter. No, payments missed of that nature are usually discovered pretty quickly, and banks are notorious for ensuring they get their money, I've heard. So having a payment missed and not made for nearly two months? Unlikely, but more on this below.
Secondly, referencing the 113-day lockout is fine as it certainly wouldn't help in bringing in money when you consider lost ticket sales, parking and concession revenues, and sponsorship monies. But it also doesn't factor in savings such as not paying players, not putting ice in for 113 days, and not having to have concession, parking, cleaning, and other staff at the arena for those 113 days. In short, the lockout's "costs" would be offset by the savings seen in the same situation. Sensationalism in journalism seems to be a New York Post specialty.
Thirdly, if the bank wanted to simply put the loan in default, they will never see the value of the money come back to them in any real form. It's $170 million in money they will never realize unless the team and arena are sold to a new investor, and most people with money will recognize this kind of sale as a firesale where the bank simply wants to move an asset to recover its money. In this case, investors bid low since the bank is desperate to sell.
But here's the key: in allowing Vanderbeek to be tardy on a $3 million payment while he straightens things out with the NHL, the city of Newark, and anyone else he's approached for a monetary solution, the lenders are wise to keep their yaps shut to the press in order to keep everyone's houses in order. The Devils and the city of Newark just reached an agreement that will bring in some solid revenue for at least the next five years. The parking agreement alone is worth $2.7 million annually - just short of the $3 million payment owed. You don't think that money will offset any of the interest payments that Vanderbeek owes his lenders?
It's not like Vanderbeek is sticking it to the people of Newark and his lenders. You can't tell me that you've never put off paying a bill when there are more pressing needs that require your financial attention. We've all done it, and that's what Vanderbeek is doing here. He needs his hockey people to re-sign talented players and attract new talent for a playoff run next season. He needs to ensure that his facility people are attracting top flight attractions and concerts to ensure that the Prudential Center is hopping. These are things that make money that, in turn, pay bills off faster. The $3 million payment? A spit in the ocean when once considers the $170 million still owed to lenders. But to claim a default status would put the entire amount at risk of never being realized.
Honestly, this should be a non-story and I'm kind of embarrassed that the New York Post went after this. Some critical thinking would give way to what appears to be happening in Vanderbeek's situation, but it seems that sensationalism sells more papers than proper journalism. While I'm not in the business of calling out journalists often, this is on case where a small blurb and some research could explain a lot. I guess that's outside the normal job description of "New York Post journalist".
Of course, I could be way off and Vanderbeek could be swimming in red ink as I write this. It's entirely possible that Kosman is more in tune with Vanderbeek's financial situation than even Vanderbeek is. But I gather that Vanderbeek's a pretty astute businessman who knows the value of a dollar and how to make that dollar grow into many dollars, so I just can't see a New York Post journalist knowing more about the owner's finances than the guy writing the cheques.
Doesn't make a lot of "cents", does it?
Until next time, keep your sticks on the ice!
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