- The Washington Times - Friday, August 16, 2002

Washington Redskins owner Dan Snyder is close to completing a $700million refinancing of the debt on the team and FedEx Field. The refinancing, a goal since he bought the Redskins more than three years ago and actively pursued since late 2000, is by far the largest debt package ever on a pro sports franchise.

First reported by trade publication Sports Business Journal, a two-tiered package of debt led by Bank of America, already a leader in sports industry lending, will replace more than $500million in club debt with SG Cowen and Bank of America. Completion of the refinancing is expected by early October.

The new loans are on much more favorable terms than the previous ones and better reflect the Redskins' status as the pre-eminent economic power in American pro sports. The club's annual revenue of more than $200million is rivaled only by the New York Yankees among pro teams worldwide, and its estimated franchise value of $796million is unmatched.

The Redskins under Snyder also have developed the largest battery of luxury seating in the country at FedEx Field, a strong foothold in merchandising and one of the most diverse and extensive pools of corporate sponsorship.

Redskins and Bank of America officials declined to comment on the refinancing, citing U.S. Securities and Exchange Commission provisions prohibiting them from doing so. NFL spokesman Greg Aiello said the league's finance committee "has reviewed the deal" but offered no other details.

Snyder, confident he could quickly unlock the economic force of the team, has long sought the refinancing. During fall 2000, the NFL began a formal review of the Redskins' intended refinancing, as well as an overall review of its debt rules. Many within the league believe the guidelines on debt loads no longer accurately reflect franchise values that have more than doubled in the last decade.

NFL owners have not yet agreed on any substantive leaguewide changes to the league's debt rules but have allowed Snyder and his partners to proceed because the loans are backed by the team, its hefty revenues, FedEx Field, and the personal and rather liquid wealth of the ownership group.

"We're on short-term financing, and we want to convert over to long-term," Redskins senior vice president Karl Swanson said last year. "Much like a homeowner, we want a long-term fixed mortgage."

According to Sports Business Journal and other industry sources, the Redskins plan to borrow $500million from Bank of America and $200million from a private placement. The difference between the old debt package and the new one, about $180million, will go to Snyder and his investors father Gerald, sister Michele and Fred Drasner as personal loans, somewhat similar to a homeowner taking out extra cash from a house refinancing.

Much like the Redskins' initial loan from SG Cowen, the new one will be syndicated out to lessen the direct risk to Bank of America. The bulk of the SG Cowen debt received a rating that was barely investment grade. That rating, however, was seen as decent.

The financial community often looks upon the sports industry sternly because of its many wild swings in attendance and revenue and heavy debt loads. Even with the Redskins' economic might, nearly 90 percent of their value will now be tied in debt.

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