The past couple of months the financial crisis has aimed to take shots at the pro-sport’s world. Several NBA players have took contracts in Europe, clubs are lowering or stabilizing ticket prices, and leagues are cutting several jobs.
You may have noticed several new arenas and stadiums sprouting all over the United States. Many of them a product of the recent wheeling-dealing cycle; however, now many facilities still under construction are finding it harder to allocate the extra financing.
The moment you really know there is something wrong with the economy is when the Dallas Cowboys are having trouble with their financing.
Essentially the Cowboys are looking to refinance their previous $126 million loan, which they got through the auction-rate securities market (ARS). Basically an ARS allows the interest rate of a loan to be regularly reset. Obviously that market is now more.
Now Jerry Jones and the Cowboys are looking for some money to cover cost overruns of the team’s staggering new $1.2 billion stadium that is scheduled to complete sometime next year.
The Cowboys are looking for individual banks to buy pieces of the loan. In return, the team has pledged nearly all revenue lines from the new stadium. The team is still capable of bringing money in from naming rights and the sale of personal seat licenses.
When Jerry Jones and America’s team are having trouble getting money, then I think it is safe to say the economy is garbage.