Fitch Affirms National Football League Rating at A+'; Outlook Stable.NEW YORK -- Today, Fitch Ratings affirms the 'A+' rating and assigns a Stable Rating Outlook on the National Football League's (NFL NFL abbr. National Football League NFL (US) n abbr (= National Football League) → Fußball-Nationalliga , or the league) $568 million of senior unsecured notes, maturing through 2017. The debt was issued via private placement in 2001 and 2002, and the proceeds have been used by the NFL to provide additional private funding for the construction of new football stadiums through support of the NFL's G-3 Stadium Finance Program. The 'A+' rating reflects the NFL's position as the most popular professional sports league in the U.S. The NFL has a strong and highly regarded economic model, which includes sizable multi-year television contracts, significant revenue sharing among member clubs, a proven track record of conservative financial policies, and a solid collective bargaining agreement The contractual agreement between an employer and a Labor Union that governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. (CBA See Capital Builder Account. ) with its players union which includes a 'hard' salary cap in U.S. professional sports. In addition, the rated senior unsecured notes benefit from the NFL's first-in-line access to league-managed revenues, strong forecasted debt service coverage, adequate legal provisions and covenants, and ample reserve levels. The NFL's current national television contracts with Viacom's CBS (Cell Broadcast Service) See cell broadcast. , News Corp's Fox, General Electric's NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. and Walt Disney Co.'s ESPN ESPN Entertainment and Sports Programming Network extend through 2011 (the ESPN contract extends through the 2013 season) and are valued, on average, at $3 billion annually versus about $2.2 billion annually for the previous contracts. In 2004, the NFL extended the subscription based DirecTV contract through 2010 to broadcast the out-of-market television package 'NFL Sunday Ticket'. The total contract is valued at $3.5 billion, and amended the prior payment structure for the 2006 and 2007 seasons. The significant increases in television contracts are testaments to the strong and growing demand and fan support for NFL content and broadcasts attracting 120 million weekly viewers. Additionally, the NFL has a multi-year agreement with wireless provider Sprint and satellite radio provider Sirius. The CBA between the NFL and NFL Players Association (NFLPA NFLPA National Football League Players Association ) was extended in March 2006 and continues through the 2012 NFL season; it extends the CBA that was signed in 1993 and extended several times through the 2007 NFL season. Similar to the prior CBA, if the agreement remains in effect through its full term, the 2011 NFL season will be the last season subject to a salary cap and includes a no strike and no lockout lockout, intentional closing up of a company, factory, or shop by an employer to prevent employees from working during a strike or labor dispute. The term lockout provision. Fitch notes the early termination rights of the NFL and NFLPA under the CBA which can result in the last capped season being at least 2009. The strong growth in franchise valuations over the past five years combined with the $150 million debt cap result in a favorable loan-to-value ratio which helps to support a favorable credit environment for the league and its clubs. For example, the average franchise sale price since 2000 has been $596 million, which results in a conservative loan-to-value ratio of approximately 25%. Primary risks include the league's reliance on continued significantly favorable renewals of national media contracts, the potential for additional increases to league debt levels, and possible changes in the league's constitution and by-laws relating to the commissioner's assessment rights, which are unlikely. Additionally, as with all professional sports leagues  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. , there are inherent risks with collective bargaining and extensions and/or renewals of the current agreement. The NFL is a not-for-profit unincorporated association of 32 member teams and was originally founded in 1920 with 18 franchises. The NFL's outstanding senior unsecured debt was issued to support the league's G-3 Stadium Finance Program and to refinance borrowings under the Stadium Funding Credit Facility. The G-3 Resolution authorizes the NFL to advance up to 50% (with a maximum advance of $150 million) of the total private contribution to a stadium construction project, as evaluated on a case by case basis. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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