10/07/2011

NHLís Devils Mull Goldman Funding Plan

Goldman Sachs is trying to convince the National Hockey Leagueís New Jersey Devils to securitize future revenues from the teamís television broadcasting contracts.

Goldman approached Devils officials this week, pitching a deal that would raise $75 million to $100 million. The team is considering the proposal.

A Devils offering might hinge on plans by 47% owner Jeff Vanderbeek to buy out a similarly sized stake held by Ray Chambers. Amid ongoing financial struggles for the franchise, Chambers and other partners have balked at recent spending proposals. But Vanderbeek wants to pursue a series of projects, including adding high-end restaurants to the teamís home arena in Newark and constructing a nearby hotel.

A bond sale might help raise the money to finance those initiatives, which presumably would remain stalled with Chambers in the picture.

Vanderbeek, a former Lehman Brothers executive who took control of the Devils in 2004, is close to finalizing a deal with Chambers that would be complete by yearend. Chambers apparently would pay off lenders including CIT Group as part of the arrangement.

Devils games are aired on the MSG television network. A securitization by the team would likely resemble prior offerings by other professional sports franchises and leagues. In fact, the NHL looked into a deal backed by broadcasting revenues a few years ago ó as did the National Football League.

A $475 million securitization that Major League Baseball completed in 2003 was backed by a broader mix of cashflows. Deals from individual teams, structured both as term offerings and commercial-paper conduit transactions, have encompassed assets including revenues from concessions, ticket sales and stadium naming rights.

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