NFL 9 Billion in debt? (1 Viewer)

[t-boy]

Owners want to shrink $9B debt
Posted: Saturday March 29, 2008 09:59AM ET
Although not on the agenda for any votes, the league's collective bargaining agreement and revenue-sharing plan will serve as the elephant in the room for meetings which last through Wednesday. Small-market owners are set to end the current arrangement with a vote in November to curtail the CBA and possibly throw the league into chaos by 2010. The CBA, extended in March 2006 in a last-minute compromise, would expire after the 2010 season if at least nine owners vote against it in November -- something that's considered a fait accompli at this point. If so, the salary cap and revenue sharing could go the way of Major League Baseball, circa 1993, and turn what has been American sports' model pro league into bedlam among the haves and have-nots and those in between. Despite its success, the NFL and its teams are more than $9 billion in debt, according to a story in

http://www.fannation.com/truth_and_rumors/nfl#

 

[Saint Droopy]

Wow... in a leauge with so much money... they need to get the Redskins or Raiders cap guy to balance the league's checkbook...

 

[atceagle]

I think the debt might be tied more to stadium deals but the NFL lists them as NFL debt(team debt) even though the NFL won't be paying that off. I don't know, how/who could they owe that much.

 

[Stephen2121]

Another good reason why NFL Europe was disbanded!!

 

[Webmeistro]

If they end the salary cap, pro football is dead to me.

I have no desire to watch a sports league in which only a handful of teams ever have a shot of making it to the Super Bowl.

 

[jimrip]

From the original story in Sports Business Journal (found here: Court filing: NFL carrying $9B of debt
no thanks to FanNation which doesn't provide a link):

"The NFL debt figure likely includes all team borrowings and the league’s G-3 stadium funding plan, which has granted nearly $1.4 billion to 11 stadium projects since 1999, and might include the league’s lending pool, or credit facility. The NFL did not respond to requests for comment.

Another factor in the debt figure is that a select few projects eat up a large chunk of the amount. The New York Jets and Giants borrowed $1.3 billion for their new stadium and received $300 million from the G-3 program. The Dallas Cowboys borrowed $475 million for their new stadium and got $76.5 million from G-3. That totals nearly one-quarter of the league’s entire debt burden."

Sounds like standard book-cooking to me, seeing as how the players association is suing them once again over mis-stating revenues.

 

[Summed7]

If they end the salary cap, pro football is dead to me.

i agree...it would hurt like hell though

 

[BlackNGoldblood]

If they end the salary cap, pro football is dead to me.

I have no desire to watch a sports league in which only a handful of teams ever have a shot of making it to the Super Bowl.

Hopefully, everyone involved realizes that and it never comes to that, but I'm very concerned because money is bringing everything else in this country down and is about to attempt to destroy the best thing we have going sports-wise - the NFL.

 

[LSSpam]

Sounds like standard book-cooking to me, seeing as how the players association is suing them once again over mis-stating revenues.

Yes, sort of. The presentation that the NFL is "drowning" in debt is, of course, silly. So that's being misrepresented. The debt is real though. It's just, as you noted, mostly tied to new stadiums which are, essentially, new/expanded revenue streams for teams. It's not like any franchise is going into debt just trying to operate.

That's part of the problem though. The teams with the most debt are the so-called "richest" teams who recently built new stadiums. They now make the most, and are, under the current CBA, forced to engage in increased revenue sharing with poorer teams (who are, ironically, in older stadiums and therefore generally carry significantly less debt) but also carry the largest debt loads.

 

[NCSaint]

Wow. That sure seems like alot to me. I am no finance guy but that is a hell of alot of debt.

 

[BigHossTheBoss]

That is all the debt from every team combined....where do you think they get this money? It doesn't come directly out of the owners' pockets. Every team is allowed to borrow up to a certain amount...I have heard different figures but there is a ceiling that the owners are allowed to borrow up to and no more. The owners want to eliminate big signing bonuses and up front money on the cap so that they can lower the amount of money a team is allowed to borrow and thus shrink the debt while continuing to make big profits. Every big company has a tolerable and healthy level of debt, the NFL is no different.

 

[Mile_High_Saint]

It is amazing to me how you can lie with numbers these days. Anyone that believes this thinks enron got a raw deal.

 

[Saintsfans27]

That's almost as bad as casinos that go under. It just doesn't make any sense to me.

 

[Jeff Miller]

9 Billion in dept? This is either a blatent falsehood, or the league has been enriching itself. Don't tell me it has anything to do with stadiums, even at 300 million a stadium that enough to cover the cost of 10 brand new stadium, which we know darn well don't exist.

As time goes this league seems to be focused on money and less focused on football.

 

[dapperdan]

9 Billion in dept? This is either a blatent falsehood, or the league has been enriching itself. Don't tell me it has anything to do with stadiums, even at 300 million a stadium that enough to cover the cost of 10 brand new stadium, which we know darn well don't exist.

As time goes this league seems to be focused on money and less focused on football.

Depends on what the NFL counts as debt for the league. If a new ownership group comes in and purchases a team for say, $1 Billion, and essentially finances that deal with 20% down, borrowing $800 mil; it doesn't take too many franchise sales to come up with $9 Billion in debt. Now, I don't believe there have been any Billion dollars sales yet, but there have been some deals recently in the mid to upper nine figures. And many of these new franchise deals are being financed, not straight cash deals.

So it's not just the pooled debt for stadiums, I would have to guess that franchise financing is also being counted; and new owners are using much more financing than in years gone by.