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SBJ/November 17 - 23, 2003/Finance
NFL, banks renew league’s credit lines
Published November 17, 2003
The NFL and its banks earlier this month renewed the league's credit lines, which now hover near $2 billion, the largest among the professional sports leagues.
Leagues use collateral such as media contracts to borrow from banks and then allow clubs to tap into the credit, giving them lower rates than they otherwise could obtain on their own.
The NFL money pool now lends to 18 teams, having added three in the last 12 months. Two of those teams are the Houston Texans and Minnesota Vikings. It is unclear which is the third team.
The league's ability to raise so much money "says it is an incredibly strong asset and has been successful on all fronts," said Mitchell Ziets, a sports consultant. And as important, he added, the league's financial policies have aided its clubs' creditworthiness.
The NFL and its bank, Banc of America Securities, declined to comment.
Because of the credit pool's financial structure, it must be renewed every year. When it was first started in 1998, the facility opened at $428 million and nine teams used it. Last year at this time, the credit lines had $1.6 billion and 15 teams.
The NBA has a $1 billion credit facility managed by J.P. Morgan Chase; Major League Baseball has a $1.5 billion pool managed by FleetFinancial. The NHL does not have a lending facility for its clubs.
— Daniel Kaplan