NFL: $9 Billion in Debts (However "In the Black" Net)

[AStack75]

http://www.usatoday.com/sports/football/nfl/2008-03-31-owners-meetings_N.htm

According to a recent Sports Business Journal report, the league's $9 billion debt — much of it tied to new stadiums — exceeds the amount of any other sports league.

It seems unfathomable that a league flush in popularity and revenues that exceed $6 billion per year is facing any type of financial crisis. The NFL set a paid attendance record for a sixth consecutive season with its most recent campaign (22,256,502) and rakes in more than $3.7 billion per year from network and cable TV contracts.

Yet Goodell expressed concern during his news conference.

 

[PatsWickedPissah]

Re: NFL: $9 Billion in Debt

$9B debt must be taken in context with NFL revenue excess after expenses. Many people have debt (home mortages + car loans + credit cards) that vastly exceeds their annual salary. The key to viability is does your annual income minus expenses leave enough for annual debt servicing? The answer is YES for the NFL.

 

[AStack75]

Re: NFL: $9 Billion in Debt

C'mon. It's so much more tantalizing to say the NFL is $9 billion in the red.

 

[Tunescribe]

Re: NFL: $9 Billion in Debt

http://www.usatoday.com/sports/football/nfl/2008-03-31-owners-meetings_N.htm

This is a bit misleading. What it boils down to is owner debt for new stadium construction, the league isn't in "financial trouble," per se. But the next labor session is shaping up to be a barn-burner.

 

[Patsfanin Philly]

Re: NFL: $9 Billion in Debt

C'mon. It's so much more tantalizing to say the NFL is $9 billion in the red.

Especially if you want to revamp the CBA when approximately 60% of revenues go to the players....

 

[Ownagedood]

Re: NFL: $9 Billion in Debt

Wow, I wouldn't think that the NFL of all league's would be in debt.. I would figure they would be one of the richest leagues out there.

 

[Jimke]

Re: NFL: $9 Billion in Debt

Wow, I wouldn't think that the NFL of all league's would be in debt.. I would figure they would be one of the richest leagues out there.

See Tunescribe above.

 

[SamBamsFan]

Re: NFL: $9 Billion in Debt

A drop in the bucket. Figure with the worst possible financing you would pay 10% a year. We'll call it a Billion.

Five American television networks (CBS, NBC, FOX, ESPN, and the NFL Network) are paying a combined total of US$21.4 billion per year (2006) to broadcast NFL games.

http://en.wikipedia.org/wiki/NFL_on_television

 

[pats1]

Re: NFL: $9 Billion in Debt

This came up a few weeks ago on PFT and I thought there was a thread about it, but I can't find it.

 

[Patriot Missile]

Re: NFL: $9 Billion in Debt

That isn't nothing compared to the trillions our country owes. Even though the NFL is 9 billion in debt it is still thriving as a corporation.

 

[PatsDeb]

Re: NFL: $9 Billion in Debt

This is just a cover to "explain" to the fans why teams need to charge premium prices for seats and seat licenses. Anyone who owns a home is probably several hundred thousand dollars "in debt" according to this formula.

 

[Metaphors]

Re: NFL: $9 Billion in Debt

$9B debt must be taken in context with NFL revenue excess after expenses. Many people have debt (home mortages + car loans + credit cards) that vastly exceeds their annual salary. The key to viability is does your annual income minus expenses leave enough for annual debt servicing? The answer is YES for the NFL.

You also have to take into account the asset side of the books. The Fins are worth $1.1 billion (sold 50% for $550 M). So give the Fins 1/32 of the debt load (about $280 M) and they are in the black for $820 M. Not Microsoft, but still a good gig if you can get it.

 

[Patriotic Fervor]

Re: NFL: $9 Billion in Debt

Wow, I wouldn't think that the NFL of all league's would be in debt.. I would figure they would be one of the richest leagues out there.

Think of the Ted Turner Dictum:

"If you owe the bank enough, you OWN the bank."

 

[PatsFan24]

Re: NFL: $9 Billion in Debt

seems amazing because they make so much money

 

[Pat the Pats Fan]

Re: NFL: $9 Billion in Debt

Uh?? It is April 1st, isn't it?

 

[MoLewisrocks]

Re: NFL: $9 Billion in Debt

This came up a few weeks ago on PFT and I thought there was a thread about it, but I can't find it.

I remember reading about it. Actually the debt to asset ratio of the NFL compared to the NBA or MLB is apparently cause for genuine concern. Especially when you are planning to commence a WWF style cage match with your labor pool in the next two years. Franchise values are tied to league value, in some cases by upwards of 70% - in other words they're not backed by hard or real individual team assets but by popularity of a sport that has been well marketed and managed for 20 years free of labor discord. So that value is a bit of a mirage. And even those that own team related assets like stadiums AND SHOPPING MALLS will suffer if the stadium they own is empty and they can't sell shirts or programming for a league that is locked out or on strike.

Several of the millionaires who own these teams have few if any other revenue sources. Irsay owns no business interests beyond a Colts team he inherited from his late father. According to the most recent Forbes piece on NFL team values they operated in the red to the tune of a couple of million in 2007, so the bonus/payroll money exceeded revenue. Guys like Paul Brown and even Al Davis came up through the ranks as coaches who acquired control of teams absent personal fortunes. And as is often the case even billionaires borrow against team value rather than risk personal assets. The league G-3 program is underwriting loans made to help finance private and public stadium builds. Goodell doesn't want to see ownerships folding under economic pressure as the NFL attempts to regain the upper hand vs. union players.

That is also where cash over cap spending enters the equation. Teams struggle to spend to the cap absent sufficient cash from revenue for signing bonuses. Low revenue teams often borrow against team value to bridge cash flow gaps. The edict to decrease debt is likely why many teams aren't making the splash their 2008 cap space would appear to easily warrant.

This is just a cover to "explain" to the fans why teams need to charge premium prices for seats and seat licenses. Anyone who owns a home is probably several hundred thousand dollars "in debt" according to this formula.

And if they get laid off their house which has lost value in a down RE market that had overheated beyond reason just a few short years ago is worth less than they owe on it and that is why forclosures are skyrocketing. If the league isn't scheduling games in 2011 and revenue sharing money (which basically just funded the cap anyway to it went directly to the players) goes the way of the old CBA, half the leagues overvalued franchises will be in forclosure mode.

 

[godef]

Re: NFL: $9 Billion in Debt

I'm $.4M in debt (our mortgage).

Our cars is paid off, though.

 

[Dragda]

Re: NFL: $9 Billion in Debt

I'm 675,000.00 in debt personally, but it's almost all real estate. Big deal. In order take full advantage of the last remaining tax shelter for the middle class, you have to keep your rental properties mortgaged.

 

[groundgame]

Re: NFL: $9 Billion in Debt

An NFL financial crisis: Assets of $30,000,000,000; Debts of $9,000,000,000; Net Worth of team equities: approx. $21,000,000,000 ($21 Billion dollars). Over half the countries in the world would beg for such riches.

 

[TealSox]

Re: NFL: $9 Billion in Debt

Old news travels fast. SBJ had great articles on this, what, three weeks ago?