In a nine-month investigation, CNBC found that there
are teams in all four major sports "that are awash in debt,
and that complicated methods of accounting are used to make
team finances look healthier." CNBC's Don Dahler, who filed
the report on "Business Center," noted Forbes' finding that
19 franchises in the NFL, NBA, NHL and MLB "are in debt over
50% off their value." Dahler: "But debt is a hard thing to
pin down with these teams, mainly because it's often spread
out among related companies." The MLB Giants "are hocked to
the gills," according to Dahler, who interviewed team Owner
Peter Magowan. Magowan: "We never got into this to lose a
lot of money, we got into it to do something honestly for
the good of the community." Magowan said that the team has
taken on $170M in debt for construction of Pac Bell Park, as
well as $130 in equity. Dahler asked Magowan if he was
concerned about the debt. Magowan: "Yes, sure. But that
was the only way we could do our ballpark." While Magowan
is confident the team "will have sufficient revenue streams"
to make the deal work and enable it to make money, Dahler
reported that the average new venue brings a team "less
than" $10M in additional revenues (CNBC, 7/30).
