The NHL has raised around $1 billion in new debt on the private placement market, and the league is using the capital to create a central facility from which each of its clubs can draw up to $30 million to address cash-flow issues, payroll costs, and other operational expenses amid the coronavirus pandemic, sources have told Sports Business Journal.
The NHL and its teams stand to lose billions of dollars during the shortened, 56-game 2020-21 season, league Commissioner Gary Bettman told the media on Jan. 11. Still, the new debt financing that provides a potential injection of cash should ensure that all clubs are in a position to handle the financial difficulties.
The borrowing is secured against future league revenue, some sources said, including an expected increase to the amount of money owners will receive from player escrow due to the reduction in this year’s hockey-related revenue. The lenders could not be determined, but private placements are typically funded by large insurance companies and other institutional investors.
The NHL declined to comment.