Hockey's New Jersey Devils Exploring a Sale, Hire Moag & Co. as Adviser

Date: Wednesday, February 2, 2011
Author: Bloomberg.com

The New Jersey Devils, purchased by former Lehman Brothers Holdings Inc. executive Jeffrey Vanderbeek in 2004, are exploring a sale.

Michael T. Gilfillan, chairman of Brick City Hockey LLC, which owns a stake in the National Hockey League team, said in a statement last night that it is forcing the sale of the franchise and the team hired Baltimore investment bank Moag & Co. as an adviser.

“Brick City has exercised its contractual rights under its partnership agreement with Jeff Vanderbeek to cause a sale of the entire team and arena rights, subject to certain terms and conditions,” the statement said. “We are at the beginning stage of this process.”

Gilfillan’s statement came after Vanderbeek said that he has no desire to sell the team, which plays in the Prudential Center in Newark, New Jersey, and anticipated retaining his controlling stake.

“My partner, Brick City, and I have different visions for the franchise,” Vanderbeek said in a statement. “While Brick City has a right, under our partnership agreement, to explore a sale and Moag & Co. has been retained to assist in these efforts, I anticipate maintaining a controlling interest.”

Moag & Co. sent out letters to prospective buyers soliciting interest in the team on Jan. 25, according to a person with knowledge of the situation who was granted anonymity because the team hadn’t given him permission to discuss it.

Moag’s Letter

The first two sentences of the letter, distributed by the Devils last evening and sent to prospective investors on Moag & Co. letterhead reads:

“This firm has been engaged by the New Jersey Devils of the National Hockey League to act as a financial adviser with respect to the current capitalization of the Devils and the Prudential Center.

“It is anticipated that our engagement could include raising additional capital or evaluation of other strategic alternatives.”

Brick City said in a statement that its initial goal was to use professional sports as a catalyst for economic development in Newark by constructing a state-of-the-art arena for the team and to hold concerts and family shows. It said that it accomplished that objective with Vanderbeek.

“The arena and the teams playing here have also attracted more people to come back to the city in an ongoing effort to restore pride, sports, arts, culture and business to this beautiful city,” the statement said.

$125 Million

Vanderbeek, 53, took control in the team in a sale valued at $125 million, according to Forbes. The magazine reported in December that the Devils are worth $218 million on $104 million of revenue.

The three most-highly valued NHL franchises were the Toronto Maple Leafs ($505 million), New York Rangers ($461 million) and Montreal Canadiens ($408 million), according to Forbes.

A 20-year Lehman veteran, Vanderbeek ran the firm’s capital markets division from 2000 to 2002, then became head of global risk management, private equity and strategy when the company was the fourth-biggest securities firm by capital. He left in 2004 to run the Devils.

“The NHL is a league that clearly has momentum; sponsorship, gate receipts, revenue, TV ratings, it’s all up,” said Paul Swangard, managing director of the University of Oregon’s sports marketing center. “I can’t blame an ownership group for putting a team up for sale now given all the good news that’s coming out of the NHL at the moment.”

Moved From Colorado

The team, which moved to New Jersey from Colorado in 1983 and won three Stanley Cup championships playing at the Meadowlands Sports Complex in East Rutherford, is the worst team in the NHL this season with 37 points. The franchise joined the NHL in 1975 as the Kansas City Scouts.

Moag & Co. has completed franchise sales that include the National Football League’s St. Louis Rams, Miami Dolphins and Baltimore Ravens; the National Basketball Association’s Charlotte Bobcats and Atlanta Hawks; the NHL’s Atlanta Thrashers; and Major League Baseball’s Milwaukee Brewers.

To contact the reporter on this story: Curtis Eichelberger in Washington at ceichelberge@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net