Have you heard the one about a private bailout that shockingly doesn't use our taxpayer dollars?
I swear to you it's true. There is a private organization that is borrowing money to assist its members.
The NBA closed on a private loan today in order to lend 15 teams approximatelyy $11.6 million each to use at they see fit.
Apparently the league doesn't care how the money is used but as a season ticket holder I would hope they'd use it for player acquisitions and/or lowering the luxury tax they might already be paying.
But according to Sports Business Journal, the league hopes that retiring debt is high on the list of priorities.
The private lenders agreed to provide the money at a fixed rate of interest that is higher than banks would have charged in the "good old days" but is considered a good deal in this economic climate.
That is due to the credit worthiness of the league in the eyes of private lenders. it is reported that collateral for the loan is the NBA's revenue from network TV contracts.
Apparently the league took a survey to see who would be interested in the cash infusion. It hasn't been reported what kind of a means-test was used to make the determination about who would get the money but Alex Martins, Chief Operating Officer of the Orlando Magic had this to say:
We've been operating at a [$15-20M] (annual) loss over the past half-dozen years, so it helps us."
Comments
The NBA in trouble for years? Really? $100 for a lousy seat, $10 for a beer, $8 for a hotdog, $10 to park? NBA minimum salary at more than $450,000. It all makes per sense to me.
Niiiiice. If the Orlando Magic have been losing millions every year how do they propose to pay back a loan with interest? It wasn't always a hard economic time over the last half dozen years. Certainly not for the NBA.
Who knows what terms the league gave to the teams. It's certainly in their best interest not to foreclose.
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