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The NBA raised US$108 million and reduces its debt to US$6,000 million

The NBA raised US$108 million and reduces its debt to US$6,000 million

The NBA It began to balance its accounts because it managed to raise US$108 million through its investment vehicle Hardwood Funding, which made it possible to reduce its total debt to around US$6 billion.

On June 7, the competition led by Adam Silver raised US$70 million, to which US$38 million was added from the sale of another ticket. In parallel, it increased a senior revolving credit line of US$21 million.

Fitch Ratings, which evaluates the league’s debt, estimated that after the capital injection, the league’s total debt NBA relegated up to about US$6,000 million, of which US$4.3 billion corresponds to Hardwood Funding and US$1.7 billion is a revolving line of credit through an entity called Basketball Funding.

“The NBA’s business model and financial profile are consistent with the other Category A ratings for the National Football League (NFL) and Major League Baseball (MLB),” Fitch highlights in a statement.

“In terms of the league’s business model, the NBA has demonstrated the greatest global growth in popularity in recent years, and the risk of renewal of its broadcast contracts is similar to that of peer leagues,” he adds.

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Fitch Ratings, which evaluates the NBA’s debt, estimated that after the capital injection, the competition’s total debt fell to about $6 billion.

Reuters

The agency also cited the salary cap and the level of debt teams can take on as positives for the NBA. The maximum debt allowed on any of the 30 NBA franchises is $275 million, which is low compared to the average team value of $4 billion.

The NBA in total is worth US$120 billion. The Hardwood Funding vehicle is believed to be one through which teams fund as part of their normal operating needs. Its debt is secured by cash flows that direct national broadcast revenues to a debt service account before any distribution to teams.

The competition is in negotiations to close a new million-dollar agreement for the sale of its audiovisual rights. Specific, The NBA is about to close a broadcasting agreement with the Espn, Amazon and NBC networks. The contract will last eleven years and will have a price of US$76 billion, which is equivalent to almost US$7 billion a year. The new amount is 2.5 times more than the current price.

Although the figures are high, they are still below those obtained by the NFL, the American football league, which has signed contracts worth about $100 billion over ten years, until 2033.

The NBA is in a sweet moment, arousing great interest among fans. In fact, it broke the attendance record in the 2023-2024 regular season, with a total record of US$22.5 million added viewers, 1.4% more than last year.

The NBA closed its 78th regular season last Sunday, in which a average of 18,324 attendees per game, exceeding the average of 18,077 people for the 2022-2023 academic year.

Source: Ambito

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