This week should be a celebratory one for the New Jersey Devils, a traditional National Hockey League power that is back in the Stanley Cup Playoffs after a one-year absence from the postseason. But the looming specter of the franchise falling into bankruptcy, as well as a bitter battle over rent at the Devils’ home arena in Newark, has cast a cloud over the Devils as they prepare to take on the Florida Panthers in an Eastern Conference quarterfinal series.
The long-simmering feud between the Devils and Newark regarding the terms of the Devils’ lease agreement at the Prudential Center boiled over last week. The American Arbitration Association ruled Tuesday, April 3 in favor of the Devils in their dispute over Prudential Center parking revenues and declared the city owes the Devils — who have cited the parking issue as the reason they have yet to pay any rent at the Prudential Center — more than $15 million, including $4.6 million it must place into a capital fund.
According to an agreement reached between the Devils and then-Newark mayor Sharpe James in 2005, the Devils are to receive $2.7 million in Prudential Center parking revenues each year. But the agreement was never formally approved before James was replaced by current mayor Cory Booker in 2006 and Booker contends his administration should not have to abide by the deal negotiated by James and the Devils, who have not paid about $14.7 million in back rent.
A day after the AAA ruling, Booker unloaded on Devils owner Jeff Vanderbeek, telling The Associated Press that Vanderbeek “…is a high-falutin, high-class huckster and hustler” who didn’t deliver on the variety of promises he made to Newark after the Devils agreed to move from East Rutherford, where they played in the Izod Center from 1982 through 2007.
According to Booker, Vanderbeek agreed to build for Newark a community recreation center as well as provide funding for job training programs and donate office space to some of the city’s nonprofits.
“He came to this city with a mouthful of promises and a pocketful of lies,” Booker said.
While Vanderbeek won this battle, his troubles may just be beginning. Forbes reported in November 2011 that the Devils are more than $250 million in debt and that the debt is increasing because Vanderbeek can’t make his interest payments. Vanderbeek also missed a $100 million principal payment due last September 1. The New York Post reported in February the NHL is advancing the Devils almost $10 million per month.
The Post also reported that Vanderbeek was close to an agreement with a new investor that would allow him to pay the Devils’ $80 million in overdue debt and buy him time to raise additional capital. However, according to the Post, Vanderbeek would be forced to sell the team if he couldn’t line up that funding by the time the puck drops on the 2012-13 season.
The arena controversy and general uncertainty regarding ownership is a decidedly unwanted distraction for the Devils, who, despite their history of success, have found it difficult to establish a toehold in the crowded tri-state sports market. The Devils have won the Stanley Cup three times since 1995 and have reached the playoffs in 20 of the last 22 seasons, but they averaged more than 17,000 fans just once in their final 11 seasons at the 19,040-seat Izod Center.
The Devils averaged 15,396 fans per home game this season at the Prudential Center, well shy of the arena’s 17,625 capacity for hockey. A search of StubHub.com today, April 11, revealed almost 4,000 tickets still available for the Devils’ first two playoff games, scheduled for Tuesday, April 17 and Thursday, April 19.
