Magic Set To Receive $100M Loan To Help Finance New Arena
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New Magic Arena Deal Led By
Team's Bank, Goldman Sachs |
The Magic is "poised to receive a $100[M] loan that would make the team what is believed to be the first midtier franchise to complete a financing since the credit markets froze in September," according to Kaplan & Lombardo of SPORTSBUSINESS JOURNAL. The deal, led by the team's banker, Goldman Sachs, "would finance the Magic's contribution for its new arena plus other costs." The deal is "expected to close in 30 days and comes in [a] year when the Magic will lose between [$15-20M] despite winning the league's Southeast Division." The team is playing the Celtics in the Eastern Conference semifinals, and Magic COO Alex Martins said, "Our playoff run will ultimately determine how much we lose." Of the $100M coming to the Magic, Martins said that the team "will put $50[M] directly toward construction of the new arena, which is set to open in October 2010." The rest of the debt is "earmarked for pre-opening costs, including capitalized interest costs and unspecified debt reserve requirements." That portion of the funds "also includes $12.5[M] for the construction of five new community gyms as required by the team's arena deal with the city" (SPORTSBUSINESS JOURNAL, 5/11 issue).
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