Fitch Ratings said it may place a negative outlook on the National Basketball Association’s debt if a prolonged work stoppage leads to the cancellation of games.
Fitch maintains a BBB+ rating with a stable outlook on the NBA’s $957 million league-wide credit facility and $1.34 billion in senior notes. The company also maintains investment-grade ratings on about $1 billion in debt related to arenas where a basketball team is the primary tenant. A stoppage in excess of a year may result in further action.
Management and the players’ union are meeting today in a last-ditch effort to agree on a contract replacing the one that expires tonight. The union has said it expects owners to impose a lockout if an agreement isn’t reached.
“While Fitch believes lenders to the NBA and NBA arenas are protected in the short term, longer-term impacts from work- stoppages in professional sports have always been highlighted as a credit risk as they have the potential to alienate the fan base,” the New York-based rating company said in a statement.
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