Major League Baseball is carrying between $3.1 and $5.1 billion in debt, depending on how the figures are interpreted, according to a story in today’s edition of the Sports Business Journal. While the figure may seem eye-popping, it pales by comparison to the NFL, which disclosed in a letter last October to the NFL Player’s Association that they are $9 billion in debt (read more on The Biz of Football). As reported by the Sports Business Journal:
The NFL debt figure is far higher than that of other leagues. MLB clubs owe $3.1 billion, according to MLB CFO Jonathan Mariner, though that number does not include the roughly $2 billion in financing for the two pending New York ballparks because that debt, technically, is not carried by the teams. The NBA declined to make public its debt total, but the league’s policies limit all team borrowings to $175 million per club. The NHL also declined to discuss any aspect of its debt, but finance sources have previously said that the league allows teams to carry debt up to half of their franchise value.
The technical aspect of whether the Mets and Yankees are carrying the debt, in many ways, contradicts how the projects were sold to the public. A 2004 article in the NY Times reported:
The New York Yankees will soon unveil plans to build a new $700 million, open-air stadium across 161st Street from its present home in the Bronx, according to team executives and elected officials, and the team is willing to pay much of the cost of construction.
The city and state would probably have to spend around $100 million, officials said. Primarily, the city would be asked to create a string of ball fields and parks nearby that would lead down to the Harlem River, north of the Bronx Terminal Market, to offset the loss of parkland in the neighborhood. The state would be asked to build a Metro-North train stop along its tracks adjacent to the field.
$100 million was a tad off.
There has been $225 million in tax-free bonds issued for new parking structures, the State of New York will be pitching in $70 million, with closing costs rolling in at a cool $4 million. The total bill (for now) is at $1.6 billion.