Jeff Vanderbeek, the controlling owner of the Devils, could complete a deal by the end of next month to erase most of the team’s debt and bring in new minority owners, according to two people with knowledge of the negotiations.
Vanderbeek has had a term sheet for new investors on his desk since the end of May, these people said. The document, a copy of which was obtained by The New York Times, explains that the investors’ infusion of cash will help pay off debt on the team and Prudential Center, and will raise working capital. It does not list the name of the new investors.
In recent months, the team has been focused on repaying about $77 million that is overdue to its banks, which is only a portion of overall team and arena debt. The term sheet, which was dated May 27, three days before the Devils opened the Stanley Cup finals against the Los Angeles Kings, promised that new investors would get a so-called put option after five years that would allow them to sell their shares in the team to a third party.
In addition, the term sheet said, Vanderbeek will invest $10 million to take an additional stake in the team, but his contribution has been modified since then. He controls 47 percent of the team, and while it is unclear whether the extra shares will make him a majority owner, Vanderbeek is expected to remain the controlling owner.
Since the term sheet was issued, Vanderbeek has been able to refinance and restructure much of the total debt of about $178 million. That part of the deal is almost complete, which is allowing Vanderbeek’s financial adviser, Three Ocean Ventures, to move to raising equity from investors who have already been identified, according to the people with direct knowledge of the deal.
The term sheet also specifies that a compensation committee that includes the major shareholders be created to approve player contracts of more than three years that are worth more than $7.5 million after the first year, and which increase overall team payroll. The captain Zach Parise, goalie Martin Brodeur and defenseman Bryce Salvador are among the players who are set to become unrestricted free agents July 1.
On the eve of the Stanley Cup finals, Commissioner Gary Bettman said that Vanderbeek “is working to both refinance the debt on the club and equity raise, and he appears to be fairly confident that he can pull this off in the next few weeks.”
Bettman added, “Since I’ve been in touch with the banks on a regular basis, we seem to be on track.”
Bettman has more than a rooting interest. The N.H.L. advanced the Devils $10 million from the team’s share of the leaguewide revenue pool, which includes income from the sale of television rights. The league has denied that it plans to take over the Devils if the team fails to complete a new agreement.
Bill Daly, the league’s deputy commissioner, declined to comment on the terms of the proposed deal that Vanderbeek is weighing. The team also declined to comment.
But the Devils’ deep playoff run brought in $32 million in extra revenue, which has given Vanderbeek breathing room to seek a better deal. The team has sold 1,500 new full season-ticket packages for next season, and the renewal rate for existing season-ticket holders is nearly 95 percent, compared to 84 percent last year.
In November, Forbes valued the team at $181 million, the 20th-most valuable franchise in the N.H.L. The Devils are one of the most indebted teams in the league, with debts worth 100 percent of the value of the club, Forbes said.