The new debt includes $350 million for the NFL’s stadium finance program, plus $2.7 billion for clubs to use for repaying older debt or as immediate capital, according to Fitch Ratings. That $2.7 billion was issued in two different structures—$1.7 billion in bonds for longer-term borrowing, and $1 billion as a more short-term loan.
The financing comes after NFL owners voted in May to raise the debt limit for each team to $500 million from $350 million. Fifteen clubs, or nearly half the league, participated in the $1.7 billion bond issuance, and 14 clubs participated in the $1 billion term loan, according to Fitch. It’s unclear how many opted to participate in both.
The NFL’s total outstanding debt is now around $10 billion, according to Chad Lewis, a senior director at Fitch. An NFL spokesman didn’t respond to requests for comment.
Fitch assigned A or A+ ratings to all of the new debt, a testament to the strength of the NFL’s business despite the disruption of the pandemic. The agency cited the league’s new long-term labor accord with the NFLPA, its massive TV deals and the expectation that the 2020 regular season and playoffs will continue as scheduled.
Earlier this week Sportico released its 2020 NFL Valuations. The Dallas Cowboys are the league’s most valuable franchise ($6.43 billion), followed by the New England Patriots ($4.97 billion) and Los Angeles Rams ($4.1 billion). It’s unknown if any of those clubs are participating in the bond issuance or loan program. The average NFL franchise is worth $3.1 billion, with revenue of $495 million.
Debt will be one of the main ways that professional sports teams—and college athletic departments—handle the financial challenges posed by the pandemic, which has canceled seasons, postponed playoffs and severely limited fan attendance at events.
The NFL’s regular season starts Sept. 10, and as of now, more than two-thirds of the league expects be without in-person fans at the start of the year. Those who are still planning to welcome spectators in the stadium will likely do so at reduced capacity.
The NFL’s stadium finance program, which accounts for $350 million of this debt, is part of a program that dates back to 1999. It lets teams that are building a new stadium, or renovating an old one, borrow as much as $350 million from the league (unless multiple teams are involved).