SBJ/April 15-21, 2013/FinancePrint All
The Miami Marlins are trying to refinance $165 million and borrow an additional $10 million, financial sources said.
Fans have revolted over the team’s roster moves.
While sports team refinancings are frequently mundane, uneventful affairs, with lenders and borrowers haggling over interest rates for a renewed deal before the loan expires, this refinancing has a different backdrop, given the public turmoil regarding the Marlins in South Florida. The club is under siege from fans for having traded away most of its top players after last year’s ballpark-opening season (albeit also a losing season on the field). Attendance, having already fallen far short of expectations in year one in the new ballpark, is projected to fall precipitously further this year.
The current loan deal expires in the coming months, the finance sources said, though they added that default is unlikely because the current banks will do what it takes to renew the financing.
A source close to the deal pointed to, as positives, owner Jeffrey Loria’s support of the club, the health of Major League Baseball, the payroll reduction that is expected to swing last year’s loss to a profit, and the hope that the club will do better this year on and off the field than most assume.
Others are not so sure.
“That is a tough sell,” said one finance source, who requested anonymity because he did not want to alienate the Marlins from any possible future deals.
Additionally, unlike many MLB clubs that are cashing in on lucrative new cable deals, the Marlins’ current contract with Fox Sports Florida stretches through 2020.
The Marlins did not return queries seeking comment.
The team fell about a half-million fans short of attendance projections in year one in the new stadium, drawing 2.2 million fans, or an average of 27,400 per game in the 37,000-seat ballpark. For the first three games at home this year, the team was averaging less than 21,000 fans, with the two non-Opening Day games being recorded as the lowest-attended home games in the ballpark’s short history.
JPMorgan Chase, the team’s lead banker, is seeking to find other banks to take part in the new financing that would take the place of the current deal. Banks like JPMorgan prefer to spread the risk of a loan around by bringing on as many banks into a loan syndicate as possible. Those in the current deal include Citibank and SunTrust.
JPMorgan, which declined to comment, hosted a bank meeting last month at the team’s stadium. The proposed new financing would mature in 2017.