Apollo Global Management LLC (APO:US) co-founder Josh Harris, who owns basketball’s Philadelphia 76ers, agreed to buy the debt-ridden New Jersey Devils, a team that struggled financially under the ownership of former Lehman Brothers Holdings Inc. executive Jeff Vanderbeek.
Harris was joined by David Blitzer, senior managing director of Blackstone Group LP, in agreeing to purchase the Newark, New Jersey-based Devils in a deal for the National Hockey League club that also gives the partnership control of the Prudential Center, they said at a news conference today at the arena. Blitzer, a New Jersey native, is also part of the 76ers ownership group.
Harris, who bought the National Basketball Association’s 76ers in 2011, declined to discuss terms of the sale. The deal is worth $320 million, according to the New York Times, with Harris’s group assuming $200 of debt.
“There’s been a lot of speculation and most of it has been wrong,” NHL Commissioner Gary Bettman said at the news conference.’’
Scott O’Neil, who last month became the 76ers’ chief executive officer, also will assume that role with the Devils.
Harris is getting a team that is the primary tenant in the Prudential Center, an arena that opened in 2007. His other sports property, the 76ers, are co-tenants with the NHL’s Flyers in Philadelphia’s Wells Fargo Center, which is controlled by Comcast Corp.
The Devils have won three Stanley Cup championships since 1995, more than any team except the Detroit Red Wings, and reached the finals five times since then.
Vanderbeek, who bought out his partners and refinanced the team’s debt in January, quit as a Lehman Brothers executive committee member in 2004 to buy the Devils for $125 million. He had been a minority owner since 2000.
“I am proud of our accomplishments this past 10 years -- most importantly ensuring the Devils have a state of the art arena to call home,” Vanderbeek said in a statement.
The team was put up for sale in February 2011. After investment bank Moag & Co. was hired to oversee the sale, Vanderbeek said in a statement that his minority partner, Brick City, and he had differing visions and that their partnership agreement allowed Brick City to seek a sale. Vanderbeek said he intended to maintain a controlling interest.
The Devils moved to the Prudential Center from the Izod Center in East Rutherford, New Jersey, in 2007.
Vanderbeek and the city of Newark got into a dispute over parking revenue and other terms of the lease. An arbitrator awarded the Devils $2.7 million a year in 2012. Mayor Cory Booker, who won the Democratic nomination for U.S. Senate this week, called Vanderbeek a “high-falootin’ high-class huckster and hustler.” The Devils said in a statement that Booker was “playing fast and loose with the facts.”
In January, Vanderbeek said in a statement that “our future is now secure and we can be confident of continued on-ice success.” The team carried about $178 million in debt at the time, according to the New York Times. Forbes estimated in November that the Devils were worth $205 million, ranked 19th among the NHL’s 30 teams, with $122 million in revenue.
At Apollo, Harris profited by focusing on ailing companies. In 2008, he led a $2 billion investment in LyondellBasell Industries NV, a failing Dutch chemicals maker, on which Apollo eventually made a $9.6 billion profit.
Harris, a 48-year-old who co-founded Apollo in 1990, holds a bachelor’s degree from the University of Pennsylvania’s Wharton School of Business and a master’s degree from the Harvard Business School.
His group paid about $280 million for the 76ers when it bought the team from Comcast-Spectacor, a unit of Comcast, according to a person familiar with the transaction.
“Clearly when you have an arena and a team, you have more flexibility in terms of the fan experience, which is critically important, than you do as a tenant,” Harris said. “Comcast does a great job running that arena. We just have less control over it.”
The Flyers, whose fan base is also predominantly 76ers supporters, play in the same division as the Devils. Harris, who has family ties to both Philadelphia and New Jersey, said he isn’t worried about alienating Flyers’ fans.
“I don’t see a lot of conflict,” he said. “They’re two separate situations.”
Harris also said the 76ers’ future is secure in Philadelphia.
“There have been some conspiracy theories out there that I just want to categorically want to shut down,” he said. “The Sixers are staying in Philly.”
The Devils went 19-19-10 during the lockout-shortened 2012-13 NHL season, finishing fifth in the Atlantic Division, a point behind the Flyers.
Lou Lamoriello, the Devils’ president, will maintain his role of running the Devils’ day-to-day hockey operations.
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