Trouble in Dallas?
No, this post is not about PacMan. Looks like the credit market problems are starting to affect stadium construction projects. According to an article in the Sports Business Journal, the Cowboys are trying to borrow $350 million by December 1st to cover — wait for it — cost overruns in construction of their new stadium. The loan includes refinancing of a $126 million loan obtained last year plus money for those pesky cost overruns. The original cost estimate in 2004 was $650 million, to be financed with $76 million from the NFL, $350 million in public support, and the rest from the ‘Boys. The cost overruns kicked in, and the Cowboys made the unfortunate choice of borrowing in the auction rate securities (ARS) market which melted down last February. That hiccup resulted in automatic interest rate increases that, in turn, led to the ‘Boys recent attempt to raise new capital.
It’s unclear if the Cowboys will be able to raise that kind of dough in the current credit market conditions. I wonder if they qualify for some of the Federal bailout money? Stay tuned.