Well, things have certainly gotten interesting at NHL headquarters. At the moment, the New Jersey Devils are deeply in debt and will very likely be taken over by the NHL in the next few weeks. In the last two months, the Devils have received loans in the amount of forty five million dollars in order to keep the franchise afloat. Will the NHL assume the receivership role that they took with the Arizona (nee Phoenix) Coyotes in 2009?
Maybe not. NHL commissioner Gary Bettman told reporters yesterday that the league has no plans to assume control of the Devils. This contradicts dozens of published articles (including one from the folks right here at Causeway Crowd), that the NHL was likely to take over the financially troubled franchise. “If the suggestion is we’re going to take over the Devils,” Bettman said, “it’s not accurate.”
This sentiment is echoed by the number two man at the NHL, deputy commissioner Bill Daly. “I don’t anticipate either the league having to take over the team, or the team having to file for bankruptcy.”
So, what can be done? The Devils have a massive debt problem and that’s not going away quickly. The Devils’ problems were exacerbated by the shortened season and their inability to make the playoffs. Within the next few weeks, the Devils will need to start making payroll adjustments. Without fresh capital the Devils ownership will have only three ugly solutions.
1.) Sell the team – If Bettman is so convinced that the NHL won’t be assuming control of the Devils, then it is likely an appropriate suitor has already been found. Perhaps it’s just a matter of getting the paperwork together. Then again, it took four years and a half a dozen or so tries to get the Coyotes a new owner and financial security.
2.) Declare bankruptcy. The ownership group of the Devils has until the fourteenth of August (five days away) to come up with a debt consolidation plan. If the Devils declared bankruptcy, it would at least give them a few months to organize and come up with some sort of plan to keep the team solvent and avoid option three.
3.) Have the NHL assume control after all. At the moment, Bettman et al refuse to acknowledge the necessity of controlling the franchise. However, if an immediate purchase isn’t forthcoming, then the league is going to have to step in.
Last year, out of the thirty teams in the NHL, only twelve teams made money. The Bruins were one of them. This is a bad sign for the league though. We still have owners who are making frightfully irresponsible choices when it comes to their finances, and a NHL office that is more concerned about keeping the players’ union under control. If (or shall I say when) the NHL has to step in and take over the Devils, I can only hope it’s a wake up call for the other owners to be more responsible in the future.