MLS takes out $425 Million Credit Line

[Kjbert]

Saw this on Twitter thanks to NYCFC fan @JonDensa

MLS has taken out a $425 Million credit line from JP Morgan. They are going to use the funds to purchase the remaining stake in SUM from a private equity firm and to fund player transfers

I would be interested to see what the collateral is here. I would imagine a good piece of it is the next round of expansion fees. I don't know how much they are paying for SUM. Will be interesting to see how much they want on hand for player transfers

 

[413Blue]

Nice find, any articles or other confirmation on this.

And as always, I want to caution some people who may not be familiar with this type of financing. This is a line of credit, which is an important distinction. Typically organizations do not draw on the entire line at any given time. So don't get the idea that MLS may all of a sudden have 400 million + in cash sitting in the bank.

 

[LionNYC]

The original article, which I found via r/MLS...

https://www.sportsbusinessdaily.com...Leagues-and-Governing-Bodies/MLS-finance.aspx

 

[Gazza_55]

Saw this on Twitter thanks to NYCFC fan @JonDensa

MLS has taken out a $425 Million credit line from JP Morgan. They are going to use the funds to purchase the remaining stake in SUM from a private equity firm and to fund player transfers

I would be interested to see what the collateral is here. I would imagine a good piece of it is the next round of expansion fees. I don't know how much they are paying for SUM. Will be interesting to see how much they want on hand for player transfers

The collateral is definitely not expansion fees. Expansion fees are to compensate the current owners for the reduced share in league revenues.

 

[JGarrettLieb]

Saw this on Twitter thanks to NYCFC fan @JonDensa

MLS has taken out a $425 Million credit line from JP Morgan. They are going to use the funds to purchase the remaining stake in SUM from a private equity firm and to fund player transfers

I would be interested to see what the collateral is here. I would imagine a good piece of it is the next round of expansion fees. I don't know how much they are paying for SUM. Will be interesting to see how much they want on hand for player transfers

The collateral is a stake in SUM, the legal entity that is the source of the USMNT and MLS media rights. If it was anything else I'd be shocked, mostly because MLS doesn't have anything else thats nearly valuable enough.

 

[Kjbert]

The collateral is a stake in SUM, the legal entity that is the source of the USMNT and MLS media rights. If it was anything else I'd be shocked, mostly because MLS doesn't have anything else thats nearly valuable enough.

That makes a lot of sense. But it could also be future television and kit sponsor fees. That's what they do in Europe.