January 06, 2003
Bond agency: Stadium cash to be tougher to come by
According to a report in Sports Business Journal (no public link for non-subscribers, sorry), the bond rating agency FitchRatings is about to issue a report indicating that bond sellers are becoming more cautious about getting involved in stadium projects. "Many people would just blindly look at these new facilities going up, and they financed it thinking you would have a ton of money," Sal Galatioto, Lehman Bros.' head of sports finance, told SBJ. "Now people are taking a closer look. [Previously] they had more faith in the [financial projections]. Now they are looking at the more severe downside scenarios."
Fitch calculates that $18 billion has been spent on stadium projects since 1990, with $10.4 billion of that coming from public coffers. (No details on how those figures were calculated, whether they include indirect tax and lease subsidies, etc.) According to SBJ, "Fitch expects the more than two dozen professional sports franchises looking for stadiums and arenas to need a combined $5 billion to $7 billion to build their new homes."
