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The NBA issues debt for 254 million to inject capital into three franchises

The NBA seeks funding. The National Basketball Association (NBA) has issued debt worth 254 million dollars with the aim of providing capital


The NBA seeks funding. The National Basketball Association (NBA) has issued debt worth 254 million dollars with the aim of providing capital to three franchises of the competition, whose identity has not transpired.

According to Sportico, league affiliate Hardwood Funding LLC is selling three uneven tranches of bonds, a first of 137 million dollars, another of 90 million dollars and a last of 26 million dollars.

The debt issuance has been made using the proceeds from media contracts to back the debt, whose total amounts to 7,400 million dollars. According to an opinion issued by Fitch Ratings, the NBA’s debt currently has an A- rating, that is, a stable outlook with a low risk of default.

According to the agency itself, joining the franchises and the league itself, the NBA reaches a total valuation of 77,500 million dollars. “In terms of the league’s business model, the NBA has shown perhaps the highest global growth of all sports,” the statement said.

The bond issue comes a few days after the American fund manager Arctos Sports Partners reached an agreement to acquire 5% of Harris Blitzer Sports & Entertainment, the parent company that manages the Philadelphia 76ers. With the entrance in the 76ers, Arctos achieved a presence in three franchises, after also being present in Golden State Warriors and Sacramento Kings.

Capital injections by investment funds into NBA teams have been allowed since the league relaxed its rules to allow institutional investors. The governing board of the American competition agreed in 2021 that private capital and other types of investors can own up to 20% of the capital of a single franchise. Also, Funds may hold stakes in a maximum of five different teams. If several funds invest in a team, their joint participation may not exceed 30%.

The American basketball league was created in 1946 as a private entity and in 1990 the possibility was included for Canadian teams to also play in this competition. Since the 2004-2005 season, the NBA is made up of 30 franchises that are not relegated, divided into two conferences, the East and the West. The most successful teams are the Boston Celtics and Los Angeles Lakers, with seventeen titles each.