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The NFL has issued $1.27 billion in new 2023 term notes under the league-wide credit facility, according to a ratings opinion issued by Fitch Ratings Monday evening.
The notes will be used to repay existing indebtedness, general corporate purposes and to provide working capital, according to the opinion. Fitch has given the new debt a rating of ‘A.’
At the same time, the league is increasing the amount of money available through one if its revolving credit lines to $4.113 billion. Based on a November disclosure of the NFL’s debt load and financial information disclosed in the current Fitch rating, it appears the new notes probably are increasing the league’s total indebtedness by around $900 million to $10.87 billion, although public disclosure could provide an incomplete picture. A league spokesperson didn’t immediately respond to a request for comment.
The notes are backed by the NFL’s national television broadcast revenue, which equals $318 million per team this year, or $10.176 billion overall. NFL franchises have the ability to each carry $600 million in debt. Fitch rates the debt as A, which is firmly investment grade by the firm’s judgment, because of the “lockbox” nature of the TV revenues to back the debt without ever entering team owners’ hands, as well as the league’s overall health.
“The ratings reflect the NFL’s position as the most popular professional sports league in the U.S. and its strong and highly regarded economic model, which includes a long history of sizable multiyear national media contracts that were recently renewed through the 2032 or 2033 seasons,” the agency wrote in the note.
Debt ratings such as Fitch’s help set the interest payment borrowers like the NFL will pay in the market, as well as guide institutional investment managers, who often have credit quality rules to follow in their funds.
Named the NFL Football Club Term Notes 2023-XV Trust, Series A-F, the new notes probably carry a fixed interest rate and will be due, according to Fitch, starting in 2028 and extending out as far as 2043.