Shakey Rustie asked in SportsHockey · 9 years ago

The Devils are bankrupt, how will Kovalchuk survive...?

The team is defaulting on loan payments, and currently sit $250mil in debt.

1) How many teams do you figure are in financial trouble currently?

2) Does the fact that the salary cap (and cap floor) has risen so fast have anything to do with these teams financial difficulties?

3) Is three teams in the New York City area too many for the NHL?

4) When the divisions are realigned next season, should there be a new division composed of teams that are most likely going to move?

5) Will all of these financially struggling franchises have an effect on the new CBA (i.e. are we heading for another lockout)?

BQ* Who will have a new owner first, the Devils or the Coyotes?

6 Answers

  • Favorite Answer

    1) Phoenix, Dallas, New Jersey, NY Islanders, and probably another 3-5 franchises are in that netherworld of being month-to-month.

    2) Teams like Florida wouldn't make the moves they made otherwise.

    3) Not for me to say, but it is a concern when two of the three teams are in trouble (I could have bought a ticket in the first five rows to Wednesday's NJD-TOR game for $25 each- I mean, that's two beers with a loonie back at the ACC). NYR are the big kahuna; NJD and NYI need to do better relative to ticket sales.

    4) Other than taking a long hard look at Phoenix...not sure what else you can do. Don't see Dallas, NJ moving. PHX is the wild-card.

    5) I don't think anyone wants that. Bettman can't possibly be that stubborn (especially watching the NBA collectively try to eat their gun)...okay, maybe he can. I think you'll see some substantive changes to the CBA, but I see this as being all negotiable. Unlike the last time, you haven't had a two-year drumbeat of "the system is broken" going off like bad techno music.

    BQ: New Jersey has a new arena (Prudential Center is really nice), decent location, and get a boat-tonne of money from local cable deals. They have made money in the past. Kovalchuk was a "what the hell were you thinking" deal (it's like Lou Lamoriello decided to channel his inner JFJ or something).

    It's questions like this where I'm glad that MLSE is literally made of money. The cap is managed short and long term, and as much as people complain about it, I'm kind of glad that Brian Burke won't do these 8/10/12/15 year deals. Five years (especially with all contracts guaranteed) is long enough.

  • 9 years ago

    1) I'd be surprised if it wasn't more than 30% of the franchises.

    2) Absolutely. The thing with any cap system is that it almost requires the small-market teams to "invest" at the same level as the big boys. Damned if they do, damned if they don't.

    3) I'll go so far as to say they are up to the limit that the market can support. If they add another (even in Hartford) I'd consider that insane - especially in the current economic conditions.

    4) LOL. I just don't see that happening.

    5) I can see a lockout. A lot depends on the NHLPA's willingness to exercise good business sense by not being greedy. The owners ain't no saints there either - they complain about escalating player salaries yet seem to love giving the bank away to them.

    BA - Coyotes.

    NOTE: I think many folks incorrectly assume that some of the markets currently in the NHL aren't hockey-worthy. This economy is making frivolous spending the bane of families that are struggling to keep their station in life. In a way, it's very much like the Canadian dollar was several years ago which had some contributing influence on the moves of the Nordiques and Jets. The point is, this is the best and worst time to be trying to determine whether or not a market is viable - thereby rendering the subject of viability moot.


  • 9 years ago

    1. We can pretty logically conclude several are. The NHL claims to have financially assisted 8 teams in the past couple of years (Atlanta being the first casualty). We know the Coyotes are one of the teams, Dallas is the other easy to figure out. And now the Devils. So there are 4 teams....the other 4 are rumored to be Florida (doesnt take a rockey scientist to figure that one out), The Isles is another no brainer as is the Blue Jackets so there are 3 more. Who is the last one? My guess is the Blues based on the fact they are for sale and issues have been noted by past and current ownership. So at least 8 with Nashville surely living dangerously on the edge as well as Tampa (who have had past issues).

    2. I dont think so. It seems to me a lot of poor ownership choices have been at the root of many of the problems....Hicks. Moores. Koule, the Atlanta group (Spirit...they only cared about the NBA but somehow by controlling the arena they decided to half @ss the Thrashers), Wang and now we hear the Devils owner leveraged his debt against the team (bad business in rough economies). The cap could be half and some owners would still fail, the NHL (Bettman) needs to do a MUCH better job of finding qualified passionate ownership groups.

    3. It can be done....they proved that out over the years. The metropolis that is that area should be capable of generating dollars from multiple sources but again it takes good owners. But with the economy looking not great for a long time moving the Devils (or Isles) may be a needed reality.

    4. I think there is much we arent hearing just yet because of possible franchise relocations and any changes made at the end of this season may come with a caveat....can the Coyotes situation get any worse (an awful lot of empty seats and no corporate support should be a clue)? WIll the meetings between the NHL and Seattle bear fruit in the form of an arena? Will Florida finally pull up anchor and head to Quebec? KC? Portland? They wont say that during the season but some of those decisions are likely already in the works.

    5. Of course it will.....but I am going to predict there will be no lockout as I think the NBA lockout will prove devastating to them. A good message to the NHL.....but I think there will be some sort of provision that allows the haves to pay luxury taxes to spend more of their big profits to sign players.

    BQ. Coyotes....because of the way debtors are structured through the NHL they cant call in bankruptcy for 180 days or the day after the last game of the Finals once a season starts. So the debtors in the NJ situation cant even begin the real process until next June then have that played out in court. The Coyotes have proven to be a financial burden the rest of the owners are growing weary of absorbing (especially the ones with financial issues of their own). I am sure there is a huge push to get this issue resolved. So much so apparently Bettman is willing to talk a leveraged loan to help Jerry Reinsdorf (in spite of the leveraged loan issues of the Devils). Reinsdorf could get the team with virtually none of his money at risk....which proves Bettman still doesnt get the dangers of not finding quality financially viable ownership groups.

  • 9 years ago

    They sure have a nice arena though, be a shame to see something happen to them.

    1. I would say the majority. I would be surprised if there are fewer than 15 teams who are least borderline broke

    2. Could be. But I think the few teams that make money make A LOT of money, and the TV deals do bring in a pretty penny. I don't really know, I suck at finance, so I am not the person to ask about this stuff

    3. You kidding? You have never been to New York, I imagine. It is more than three times larger than Toronto. And that is just NY, not including Jersey City or Newark where the Devils are

    4. No, I think any moves will be announced late this year, and that will be final for at least a few years

    5. Unfortunately, it could. Let's hope not though

    BQ I am biased, I want the Coyotes to have an owner more, obviously. So I say the Coyotes just because this season is a make-it-or-break-it kind of year. The Devils have a little more time

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  • Only low life scum of a team default on their loans... pathedic.. just pathedic

    1) How many teams do you figure are in financial trouble currently? 5

    2) Does the fact that the salary cap (and cap floor) has risen so fast have anything to do with these teams financial difficulties?

    ∩ It doesnt help.. imagine that your strapped for cash but go to get your family some food you have 10 bucks left before pay day.. and when you get to the register the cashier tells you that if you want buy your tombstone pizza that your going to have to also buy a pack of becks and a can of pringles... your going to run out of cash much faster when people wont let you spend what you budget

    3) Is three teams in the New York City area too many for the NHL?

    No thats a hockey hot spot for we Americans..

    4) When the divisions are realigned next season, should there be a new division composed of teams that are most likely going to move?

    That would sertaintly be depressing to find out your team is in that division.. maybe divivsion should be done away with and only deal with conferences..

    5) Will all of these financially struggling franchises have an effect on the new CBA (i.e. are we heading for another lockout)?

    I would certaintly think so. . salary stucture and contract lengths are deffintily going to come into questions.. no one want a financed championship team..

    BQ* Who will have a new owner first, the Devils or the Coyotes?

    Tho it slightly sickens me to be forced to discuss financially unstable teams i would have to go with the devils.. they are a bigger name

    Source(s): ∩ This answer brought to in part by tombstone pizza, becks beer, pringles and viewers like you..
  • 9 years ago

    1) I wouldn't be surprised if it was almost half of them;while we mull over the Phoenixes and other "non-traditional" hockey markets don't forget the Ottawa Senators lost 14 million bucks last year-and were in bankruptcy protection themselves back in 2003(I'm sure their creditors haven't forgotten that)

    2) The floor cap was a bad idea-forces teams that aren't going to compete anyway to spend money for the sake of spending money.

    3)Shouldn't be-never was an issue until the last few years.

    4)They might have to have a "contraction" division if things (economic conditions) don't improve-no one likes the "C" word but they're going to have to start thinking about it -with the current climate moving franchises into new markets(or revisiting old ones not named Winnipeg) would be risky at best.We've been in a funk now going on 4 years-and now the global economy rests on a bunch of socialists in Greece who got themselves in a funk by "spending other peoples money"(the cornerstone of socialism)-well-the "other people" ran out of money and these people don't want to pull up their bootstraps..anyway-the NHL is in kind of the same boat-the "have " teams are getting fewer and farther between than the "have- nots"-the league can only provide corporate welfare to so many teams at once-I don't see enough viable hockey markets opening up unless there's a helluva speedy economic turnaround;now the "experts" are saying it's going to get worse before it gets better-considering that I see at least 2 franchises being contracted in 2 years.

    5) No one will win in a lockout-but I'd bet there are stirrings amongst some owners of struggling teams that it'd be in their best interest to board up the windows tomorrow until things get better-which might be a long time off-the players union has always resisted contraction(eliminates jobs) but the overall health of the league will (should) win out.

    BQ-More money in the New York metro area so I say the Devils-the situations are different though re; bankruptcy-the Yotes chose to declare bankruptcy(it was the only possible "out" they had if the franchise were to move to get out of the arena lease with the City of Glendale).The Devs are in a spot where they could be forced into bankruptcy by their creditors-which is a whole different ball game legally as far as who controls what and decides the future of the franchise.

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