Fitch Upgrades $1.3B Major League Baseball Trust Securitization Facility to 'A' from 'A-'.

CHICAGO -- Fitch has upgraded its rating on Major League Baseball's (MLB) $1.3 billion league-wide revenue-backed securitization facility from 'A-' to 'A'. The facility, Major League Baseball Trust, currently consists of an $876.6 million variable funding note and a $392 million term note. The notes are secured by, among other things, rights to receive certain payments shared among MLB clubs, including primarily telecasting and radio broadcast revenues from national and international media contracts, and, to a lesser degree, revenues under licensing and sponsorship contracts entered into by Major League Baseball Enterprises, Inc. and distributions from Major League Baseball Advance Media LP.

Fitch's rating upgrade reflects additional protection to facility noteholders provided by the recently approved collective bargaining agreement (CBA) between MLB's club owners and the Major League Baseball Players Association which ensures no work stoppage through the 2011 season, as well as renewals of long-term broadcast agreements. In 2006 new broadcast agreements with FOX Broadcasting Company and Turner Broadcasting System through the 2013 season were announced and in 2005 a broadcast agreement with ESPN covering the 2006-2013 seasons was announced. Fitch notes that the new CBA promotes financial stability among MLB clubs through continued oversight of club level financial activities by the Commissioner's Office, enhanced revenue sharing, and the competitive balance tax. Furthermore, Fitch notes principal amortization of the revolving and term notes is consistent with Fitch's expectations, in addition to improving economics at the league level, as reflected, in part, by record-setting park attendance figures in 2006 and the aforementioned television contract renewals and extensions.

Fitch's analysis also took into consideration a number of quantitative and qualitative factors, including, among other things:

-- Pledged shared revenues from national media contracts. Fitch's analysis of national media contract revenues takes into consideration the diversity and credit quality of current national media contract counterparties, along with the duration and the timing of the renewal dates of these contracts. Fitch's stressed debt service analysis assumed disruptions in these cash flows and renewals at rates lower than current (and historical) contract rates.

-- An interest expense reserve account that was fully funded upon closing that is available throughout the term of the facility to pay unpaid interest when due. Amounts on deposit may also be used to reduce the outstanding principal of the note upon acceleration of the notes. This reserve provides additional protection in the event of an unforeseen disruption in the playing of MLB games and the potential delay in receiving revenues from national media contracts in the event of the bankruptcy of a current or future media contract counterparty.

-- A labor contingency interest reserve that specifically covers interest expense in the event of a league-wide work stoppage. After expiration of any CBA, including the current CBA (which expires in December 2011), and until the execution of a new CBA, this reserve will be established in an amount sufficient to cover nine months of interest expense.

-- The transaction's legal structure, which incorporates the use of bankruptcy remote entities. Legal opinions from counsel state that the transfer of rights and revenues is a true contribution and not a secured borrowing and that in the event of a participating club bankruptcy, a bankruptcy court would not order substantive consolidation of the assets and liabilities of any club trust or the issuer with those of any participating club. Furthermore, the rights and revenues would not be subject to the automatic stay provisions of the bankruptcy code.

Over the duration of the facility, Fitch will continually monitor MLB's economic model, future collective bargaining agreements, the terms and conditions of media contract renewals, and the credit quality of current and future media contract counterparties. Any material change in Fitch's assessment of these factors could affect the rating of the facility.

Fitch's rating definitions and the terms of use 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 are also available from the 'Code of Conduct' section of this site.