Big Score: Fitch says the NFL maintained its excellent credit rating even after raising the debt ceiling for teams.
(Allen J. Scherben/Los Angeles Times via Getty Images)
IIn mid-October, the NFL increased the debt limit for teams from $600 million to $700 million, and the debt limit for team buyers from $1.1 billion to $1.2 billion. Yesterday, Fitch Ratings released a report affirming the league’s credit ratings on various financing facilities, saying the rating outlook on all debt was “stable.”
NFL Ventures, LP (the league’s venture capital arm).
• $1.2 billion in senior notes at “A+” (G-4 Stadium Finance Program).
NFL
• $24 million senior unsecured notes rated “A+” (G-3 Stadium Finance Program).
football trust
• $6.8 billion Senior Secured Leaguewide Credit Facility (LWCF) Term Note (“A”);
Football Funding II LLC
• “A” (Leaguewide Credit Facility (LWCF)) $4.1 billion senior secured credit facility;
The NFL’s high ratings are supported by a national media deal that could bring in more than $126 billion (or $3.92 billion per team) in revenue by 2033 and collective bargaining between the league and its players. It’s an agreement. According to Fitch, “The extension of the NFL’s CBA through 2030 and the extension of its major media contracts through 2032-33 provides superior long-term revenue and cost visibility compared to other leagues. ”
The NFL’s so-called hard salary cap for player expenses has similar characteristics to the NHL, but the NBA has certain limits on player salaries and allows teams to choose to exceed a predetermined level by paying a “tax.” It is different from MLB. Media deals and high viewership numbers mean the NFL is the most popular sports league in the United States.
Also notable in the report is the mention of adding technology companies to the NFL’s media partnerships. Fitch stated: “The agreement with Amazon for the out-of-market digital distribution of TNF games, the agreement with Google to distribute the league’s home Sunday Ticket packages via YouTube and YouTube TV, and the league’s separate commercial Sunday Ticket agreement, which Embracing the shift to digital viewing trends supports the NFL’s leading role in the U.S. sports ecosystem. As the number one sport on television, the NFL dominates the top 25 TV shows during the NFL regular season. Masu.”
Incorporating technology into content distribution will likely be part of the NBA’s next media rights deal, starting with the 2025-26 season. That’s a big reason why the Phoenix Suns sold for an NBA record $4 billion in February.
The league-wide credit facilities and notes benefit from the league’s lockbox account, which collects revenue, including national television contract revenue, and repays debt before distributing it to participating clubs. Under this structure, each club receives an equal share of national television revenues, so the franchise’s share of these revenues is unaffected by on-field performance.
Other indicators supporting the NFL’s strong credit ratings include rising team valuations (the Washington Commanders were sold for a record $6 billion in July) and premium seating at many football stadiums, according to the rating agency. Improvements to the stadium, which will result in increased revenue from the stadium, are among the improvements. Paid attendance for the 2022 regular season is 99% of the stadium’s manifest capacity, and viewership trends remain strong to date this season, with many networks recording record numbers for specific games. Reporting viewership numbers.
One reason the additional debt would be helpful is that, unlike MLB, the NBA, and MLB, the NFL does not allow institutional investors to buy parts of its teams.
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