NFL May Have To Pay Back Loan During Potential Lockout
The NFL turned its $1.4B credit line into a four-year term loan, "meaning that unless the deal is refinanced, the league will have to pay back" $350M in 2011, the year the league "could be locking out its players, and the remainder of the loan in 2012," according to Daniel Kaplan of SPORTSBUSINESS JOURNAL. The deal's structure also could "mean that some teams, in anticipation of the principal payments, could begin setting aside cash by 2010, the year there would be no salary cap if the league's labor deal were not renewed before that season." NFL Exec VP & CFO Anthony Noto: "Our No. 1 priority was to have certainty of financing during uncertain times at a price acceptable to us." The NFL's credit facility came up for renewal on October 31. Kaplan notes, "Under normal circumstances, the league would have just refinanced the deal, as it does most years." The "ongoing turmoil of the financial markets, however, created a different situation." Sources indicated that while the NFL "could have refinanced ... it chose instead to allow the loan pool to 'term out,' meaning the existing debt transformed into the loan." The NFL later this month also is expected to "close another financing arrangement: a 10-year, $460[M] loan at 6.11[%]." A source said that that deal "would refinance bonds that are maturing, as well as add new debt to help teams transition from short-term to long-term interest funding" (SPORTSBUSINESS JOURNAL, 11/10 issue).
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