NFL franchises are selling well more than a billion dollars of new debt, taking advantage of expanded debt limits permitted by the league in October.
The NFL’s football trust is selling $1.45 billion in new debt on behalf of an undisclosed number of clubs. The bonds will be repaid over various periods, with some of the new debt payable by 2028 and the longest loans payable in 2043, according to information contained in a ratings note by Fitch Ratings. The money will be used to repay existing debt, for general corporate purposes and to provide working capital for the participating clubs, according to the ratings agency.
In October, NFL owners voted to expand the amount of debt permitted on each club to $700 million. Each franchise is worth at least $5 billion, so it’s a relatively low debt level. For that reason, Fitch rates the new debt as “A,” which is the third-highest rating given to a corporate issuer, representing a low risk of being unable to pay the debt.
“Activity in the 2023 season finished at record levels across many key areas of the league,” Fitch wrote in its ratings note, published Thursday evening. “Total league revenues reached $18.8 billion (projected) for the 2023 season, driven by strong growth at both the national and local club levels, and both in-person and media trends. Attendance at games across the league reached 18.2 million in 2023, up from 18.1 million in the prior year, representing 99% of stadium capacity, driving an increase in local club revenues.”
The new loans probably increase the NFL debt level to more than $12 billion, based on prior disclosures.
Fitch rates the risk of default on debt issued by leagues and other entities, information used to establish the interest rate the NFL needs to pay to borrow money. The better the rating, the lower the interest rate.
