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

Discussion in 'PatsFans.com - Patriots Fan Forum' started by AStack75, Mar 31, 2008.

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  1. AStack75

    AStack75 Rookie

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

  2. PatsWickedPissah

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    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.
  3. AStack75

    AStack75 Rookie

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    Re: NFL: $9 Billion in Debt

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

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  5. Patsfanin Philly

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    Re: NFL: $9 Billion in Debt

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

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    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.
  7. Jimke

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    Re: NFL: $9 Billion in Debt

    See Tunescribe above.
  8. SamBamsFan

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    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.

    http://en.wikipedia.org/wiki/NFL_on_television
  9. pats1

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    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.
  10. Patriot Missile

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    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.
  11. PatsDeb

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    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.
  12. Metaphors

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    Re: NFL: $9 Billion in Debt

    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.
  13. Patriotic Fervor

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    Re: NFL: $9 Billion in Debt

    Think of the Ted Turner Dictum:

    "If you owe the bank enough, you OWN the bank."
  14. PatsFan24

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    Re: NFL: $9 Billion in Debt

    seems amazing because they make so much money
  15. Pat the Pats Fan

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    Re: NFL: $9 Billion in Debt

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

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    Re: NFL: $9 Billion in Debt

    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.

    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.
  17. godef

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    Re: NFL: $9 Billion in Debt

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

    Our cars is paid off, though. :D
  18. Dragda

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    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.
  19. groundgame

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    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.
  20. TealSox

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    Re: NFL: $9 Billion in Debt

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

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    Re: NFL: $9 Billion in Debt

    Double b.s.

    If someone bought a house years ago, even if they financed it at 100% at the time, it is worth a LOT more than they paid for it. Also, the value of their house is not tied to their working or not working.

    Foreclosures are not skyrocketing, unless you definition of skyrocketing is "about the same as they have been in recent years."
  22. Deus Irae

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    Re: NFL: $9 Billion in Debt

    Hmmmm....

    http://biz.yahoo.com/ap/080306/home_foreclosures.html

    Some other interesting tidbits:

    Also:

    http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm

    http://money.cnn.com/2008/03/24/news/economy/existing_home_sales/index.htm?eref=rss_topstories
  23. jbb9s

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    Re: NFL: $9 Billion in Debt


    Is this the best you could come up with for April Fools?
  24. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    I just corrected the title of this thread.

    The NFL HAS debt. It is not IN Debt.

    IN DEBT connotes a net negative net worth. Obviously, this is not the case.
  25. jbb9s

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    This is the kind of stuff you just don't see at the Raiders or Steelers sites.
  26. PromisedLand

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    Re: NFL: $9 Billion in Debt

    Yes, but more to the point it must be compared to their assets.

    Equity = Assets - Liabilities

    If there assets are worth $50B, then their equity is ~ $40B giving them a debt-equity ratio of 9/40 or slightly under 25%. Most businesses would tihnk that is pretty good. It is pointless and meaningless to report debt without also reporting assets.
  27. BradyFTW!

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    Re: NFL: $9 Billion in Debt

    True story: In California right now, you can rent a nice, 5 bedroom house in the middle of Orange County with a pool and spa in the backyard for... $3,000 per month. That's how bad housing values have gotten out here (though me and my college buddies are loving it).
  28. PatsWickedPissah

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    Re: NFL: $9 Billion in Debt

    Yes, I have an MBA too but as others have posted here, the asset side of the equation is soft. The dollar 'value' of many of the franchises is vulnerable to an unfavorable labor settlement or lack of one.
  29. PatsDeb

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    Re: NFL: $9 Billion in Debt

    My response was to Roger Godell's statement that the league is "in debt", meaining in the red, which it clearly is not, by accounting standards. I agree that if the teams "lose their jobs," i.e. suffer a strike, and can't depend on their income, then the financial picture will change. However, to say that because I have a mortgage and might lose my job in a lousy economy means I am in the red is simply untrue. The league has great control over whether it will suffer this fate (unlike lots of regular folks who more at the whim of employers and the economy in general).

    It also rings untrue coming from the podium of the Breakers, one of the most luxurious hotels anywhere. If good ole Rog is worried about league finances, then he should make reservations at a Holiday Inn and get Gene Upshaw in a room to prevent any threat of a strike.
  30. MoLewisrocks

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    Re: NFL: $9 Billion in Debt

    I don't think Goodell said the league is in debt, at least it's not what he said in the article that spawned this thread. He expressed concern about the debt ratio that is probably a well founded concern given the last CBA and the liklihood owners will opt out of it as a result coupled with the fact that team "values" are wildly overinflated based on league popularity projections and revenue sharing, both of which will go out the window absent a CBA - as will the college draft!

    I agree they should find a way to not kill the golden goose. I think a lot of folks in the NFL have been hiding behind spygate because they don't want to talk about what should be far more pressing concerns than an imaginary, media fuled integrity crisis they basically manufactured via mishandling a simple video taping rules infraction...and rumor mongering.

    Had we been caught using that tape in game, or had someone been caught bugging visitors locker rooms or wiring linemen for sound or jamming communications devices, or poping in crowd noise, or actually signing a player or coach they tampered with, etc. such concerns for integrity might have been warranted. But dogonit, they didn't catch anyone doing any of those things did they...even though it's been long rumored some in fact were.

    If they don't smarten up soon survival will replace integrity as the league's buzz word.
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