The National Basketball Association (NBA) will borrow 175 million dollars to serve as aid to teams that might struggle in the weak global economy, Sports Business Journal reported Thursday.
The report said the presumption is teams would use the funds to cover operating losses and that while the league was not looking to borrow, Bank of America and JPMorgan came to the NBA several weeks ago with the opportunity.
Half of the league's 30 teams agreed there was a need to go through with the borrowing, according to the report, which said the money will supplement a 1.7 billion-dollar credit facility that uses the NBA's broadcast contracts as loan collateral.
The deal comes with interest rates up to 8.27 percent and each of the 15 teams that wanted to borrow could take a maximum of 11.66 million dollars from the debt proceeds, according to the Journal.
"In this economic environment, it's tremendous that the league can place such a facility," Orlando Magic chief operating officer Alex Martins told the Journal.
"It certainly helps us bridge the time period between now and when we move into our new events center in 2010. We've been operating at a 15 (million) to 20 million (dollar annual) loss over the past half-dozen years so it helps us."
The Sacramento Kings are another likely candidate to dip into the loan funds after reports earlier this month said the California club could lose as much as 25 million dollars this season.
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1 comment:
the nba needs a bailout 0_O interesting
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