NFL Giants Taking Big Hit From Economy, Lehman Bankruptcy
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Giants Do Not Know Extent Of Losses On
Financing Of New Stadium |
From a "bond market collapse and skyrocketing interest rates to the bankruptcy" of Lehman Brothers, the NFL Giants have "taken one hit after another financing" the new Meadowlands stadium the team will share with the Jets, according to Aaron Kuriloff of BLOOMBERG NEWS. Court documents filed by the team in federal bankruptcy court indicate that the Giants, which borrowed $650M toward their share of the new stadium, "can't say exactly how much that's now costing." Giants President & CEO John Mara in October sent a bill to Lehman claiming that the bank owes more than $300M "after defaulting on interest-rate swaps," and the court papers show that the team also is "subject to rate swings, refinancing charges and legal fees." The Giants sold $650M of variable-rate bonds with Lehman and Goldman Sachs, and the team in the court filings claimed that when Lehman filed for bankruptcy on September 15, the bank "defaulted on swap contracts." The team said that Lehman is "required 'to pay the actual rate of interest on auction-rate securities' over the 40-year term of the bonds, in exchange for a fixed rate paid by the Giants." Mara in the court papers said, "We continue to work expeditiously to determine the full extent of our loss." SportsCorp President Marc Ganis indicated that the Giants may be "nursing bumps and bruises for years, missing stadium revenue projections and eating into what the team can spend on players." Ganis: "It comes out of their bottom line -- there’s no other source for it -- which may mean at some time they have less money to pay players. I think they’ll weather the storm, but it’s a storm" (BLOOMBERG NEWS, 12/19).
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