Jets, Giants Close $1.3 Billion in Stadium Financing
17/08/2007 |
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The New York Jets and Giants football teams completed a $1.3 billion financing agreement to build an 84,000-seat stadium in East Rutherford, New Jersey.
The Jets borrowed $650 million from Citigroup Inc. and the Royal Bank of Canada, while the Giants got the same amount from Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc., Jets President Jay Cross said in an interview.
The transaction shows the strength of the National Football League, which had revenue of $6 billion last year, even during a global financial crunch brought on by the subprime mortgage crisis, said Marc Ganis, president of SportsCorp Ltd., a Chicago-based sports industry consulting firm.
``Even in a time of extraordinarily tight credit, these teams are still able to raise huge sums of money,'' Ganis said.
The facility will be constructed near Giants Stadium, the teams' current home, and is scheduled to open in 2010. The teams agreed to split the cost after the Jets failed to secure approval for a stadium on Manhattan's West Side.
The Giants-Jets stadium will be the most expensive in U.S. history, topping the $1 billion the Dallas Cowboys say they are spending on their new arena in Arlington, Texas, and it required the league to waive some of its financial rules.
League owners voted 30-2 in December to grant the teams a combined $300 million, twice the previous high, from a fund that provides money for construction. In March, the owners voted 31-1 to allow the teams to borrow almost five times the typical $150 franchise limit, and carry the debt as long as 25 years due to the costs associated with building a stadium in the New York area.
TV Income
The NFL's 32 teams each received $84.7 million from national television contracts last season, according to financial records of the Green Bay Packers, the league's only publicly held franchise.
The Giants plan to build a 20-acre training complex in the southwest corner of the development. Broadcast facilities, sports-medicine clinics, stores, restaurants and a New Jersey Transit rail spur also are part of the project.
(Source: Bloomberg.com)
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