League approves record debt for Falcons

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As the cost of the new Falcons stadium continues to go up and up (and up), owner Arthur Blank has obtained a dispensation from his colleagues to borrow more money than NFL teams are permitted to borrow.

According to Daniel Kaplan of SportsBusiness Journal, NFL owners have agreed to waive league rules limiting the amount of debt (which some would describe as “making it up as they go”) so that the Falcons can borrow a whopping $850 million.

The problem comes from the increases expense of the project, which spiked from $1 billion to $1.2 billion in 2013 — and then from $1.2 billion to $1.4 billion earlier this year.  As explained by Kaplan, it’s unclear whether the Falcons will be borrowing the full $850 million now, or whether they asked for the higher ceiling in anticipation of needing to borrow more later.

The enhanced debt underscores the unanticipated increase in building expenses.  Which ultimately could result in reduced payroll expenses, if Blank decides to hold accountable anyone/everyone responsible for a project that is spiraling out of control.

32 responses to “League approves record debt for Falcons

  1. The guy who founded Home Depot can’t just make all those store “consultants” to build his stadium for him?

    I got one of them to build a deck in my back yard.

  2. All large projects like this go over budget. If allowed to. Remember when the Vikings had to make some changes to get the costs down? But, the designers and owners tend to have incentive to estimate on the low-end to get approval, and then once approved there are ‘unanticipated’ extra costs. Sometimes brought about by doing cheap work upfront that fails to identify project risks. And sometimes because they add on ‘must-haves’ after approval.

    It’s good to see that the business is taking on more debt, hope they are not also saddling the taxpayers with more.

  3. Just a dumb question but why does the billionaire owner need to borrow so much $$ ? I’m guessing he’s using very little of his own $$.

  4. $ 850,000,000 … that’s a lot of cheddar. Didn’t/Doesn’t Arthur Blank own Home Depot? I’m sure he must have a few 10% off coupons lying around he could use.

  5. He’s likely borrowing the money because rich people tend to operate on leverage. Why drain $850MM out of his bank account when he can leverage it in anticipation of increased revenues from hosting events that were not previously suitable for their soon to be former open air stadium?

  6. Inflation according to the BLS is running approx 2% give or take for last decade or so. In fact some are saying there is a threat if deflation in next few years. So why is the stadium cost “spiking” . I smell a rat somewhere.

  7. This is complete BS,,,I was just at Atlanta this weekend….WTH is wrong with their current stadium? Indoor I might add!!! Nooooo lets spend 1.5 billion dollars for another stadium,,and ohhhh BTW,,,the Braves want to build a new stadium TOO,,,when they have a really great ballpark right now…..

  8. Arthur Blank is worth about $6.2B, which is about $2B more than Ross or Terry Pegula, but personal net worth, and the money that a corporation has are two different things. The Falcons, as a corporation, probably don’t have $850M just sitting there in some account, so like most of us when buying a home, they have to finance too. The only difference is that these billionaires could lend their own corporations money, but why would you do that? If they default for any reason, that is a big hit to their personal wealth if it ever defaults, whereas if they let a bank or banks do it, the banks take the hit if the loans defaults.

  9. Just Blankula trying to milk a little more kickback into his pocket in the end. Shouldn’t they invest some money in a football team?

  10. abninf says:
    Dec 16, 2014 12:49 PM
    I remember when the Falcons went to the Super Bowl once. That was weird seeing them in it.”

    Classic and excellent! Right up there with “There was this one time at band-camp . . .”

    So the kings (owners) of the NFL are changing the rules to suit themselves and get what they want. AGAIN.

    I’m grateful these guys provide us with football games to watch, but good god, isn’t there some kind of government regulation that could hold them in check and force them to operate under a hard and fast rule set, like the rest of us have to?

    I think I’ll cite this as a precedent to apply for a speed limit change on that stretch of Hwy 93 on my drive home. Might cut down on speeding tickets.
    Whaddaya mean those are my fault? That speed limit is far too low!

    That is all.

  11. You guys do realize that rich peoples assets aren’t all in cash, right? You think he has $6 billion deposited in checking at his local credit union? Most of his wealth is probably tied up in stock.

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