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http://money.cnn.com/2011/02/28/new...ebt_ratings/index.htm?source=cnn_bin&hpt=Sbin
NFL may be able to weather 2-year lockout
NEW YORK (CNNMoney) -- National Football League owners will continue to generate much of their revenue in 2011, even if next season's games are cancelled due to a labor dispute, according to a note Monday by rating agency Standard & Poor's.
In fact, some teams may be able to survive two years without any games being played, according to S&P, which said it has confidential debt ratings on various stadium bonds for facilities used by NFL teams and also tracks teams' finances.
S&P said the league's estimated revenue was about $9 billion last year, with the biggest share of that money coming from television rights deals, which it said will provide it with $4 billion in revenue in 2011.
The networks will be contractually required to pay that money to the league even if the games are not played, although the league will have to pay that money back to the networks, with interest, once games resume.
But that revenue stream, which S&P said is being challenged in court by the union, is an important source of funds that would help the owners avoid any default on their own obligations.
S&P also estimates that 50% to 80% of stadium revenues are generated from what it terms "contractually obligated income" from the sale of luxury suites, club seats, and in-stadium advertising.
The contract provisions typically require payment even if football games are not played, although once again, some of this revenue would need to be repaid once the games resume.
In judging the owners' ability to survive a prolonged lockout, S&P also cited a report in trade publication Sports Business Journal, that the league has built up a strategic reserve fund of about $900 million that teams can access in case of a work stoppage.
TWO YEARS?
NFL may be able to weather 2-year lockout
NEW YORK (CNNMoney) -- National Football League owners will continue to generate much of their revenue in 2011, even if next season's games are cancelled due to a labor dispute, according to a note Monday by rating agency Standard & Poor's.
In fact, some teams may be able to survive two years without any games being played, according to S&P, which said it has confidential debt ratings on various stadium bonds for facilities used by NFL teams and also tracks teams' finances.
S&P said the league's estimated revenue was about $9 billion last year, with the biggest share of that money coming from television rights deals, which it said will provide it with $4 billion in revenue in 2011.
The networks will be contractually required to pay that money to the league even if the games are not played, although the league will have to pay that money back to the networks, with interest, once games resume.
But that revenue stream, which S&P said is being challenged in court by the union, is an important source of funds that would help the owners avoid any default on their own obligations.
S&P also estimates that 50% to 80% of stadium revenues are generated from what it terms "contractually obligated income" from the sale of luxury suites, club seats, and in-stadium advertising.
The contract provisions typically require payment even if football games are not played, although once again, some of this revenue would need to be repaid once the games resume.
In judging the owners' ability to survive a prolonged lockout, S&P also cited a report in trade publication Sports Business Journal, that the league has built up a strategic reserve fund of about $900 million that teams can access in case of a work stoppage.
TWO YEARS?
