Padres add $50M to borrowing capacity, eye future renovations
The San Diego Padres added $50 million in borrowing capacity as part of a new $140 million financing package with U.S. Bank. The team has no specific plans for the new borrowing muscle but wants it in reserve for future renovations to its stadium and other venues.
“Petco can be a 100-year-old park,” said Erik Greupner, the team’s chief operating officer, of the club’s 13-year-old home, Petco Park. “We take seriously our obligation to maintain it.”
He pointed to poorly maintained Qualcomm Stadium as an example that the team hoped to avoid. The San Diego Chargers played there but moved to Los Angeles this year after not being able to reach an agreement on building a new venue. Since the current Padres ownership bought the team in 2012, it has invested $50 million in Petco renovation and upkeep, Greupner said.
|The Padres could use the loan to improve Petco Park and other venues they control.
The core of the financing is replacing a high-interest-rate, $90 million loan from a group of insurers with one from U.S. Bank. The insurers had charged 8 percent, while the U.S. Bank loan is in the 2 percent range currently (it is a floating rate so it would rise if overall rates do).
Despite the Padres’ onfield travails and mediocre attendance (the team ranked 19th out of MLB’s 30 teams as of last week), the bank is sold on the Padres’ turnaround plans and what it described as the club’s solid financials. “This really tells you [about] the strength of baseball and the Padres specifically,” said Bill Mulvihill, U.S. Bank’s senior vice president, sports and entertainment. MLB’s recent sale of interests in its streaming business also played a role.
“MLB’s success in developing digital platforms is an important reason U.S. Bank is bullish on the league and its clubs,” Mulvihill said.