The NBA is on the verge of raising its debt limit from $325 million to $475 million, according to multiple people familiar with the details. It would mark the first increase since 2018.
Last week, the NBA sent the proposal to the Board of Governors with a deadline to vote by 6 p.m. Monday, said the people, who were granted anonymity because the details are private. The increase is expected to be approved easily, according to multiple team executives. Once approved, the league still needs to take several steps before teams can tap the additional $150 million.
The NBA did not respond to a request to comment ahead of publication.
The limit was last raised by $75 million six-and-a-half years ago. Since then, the average NBA franchise value has risen from $1.65 billion to $4.6 billion, according to Sportico’s NBA report published last week.
The NBA’s credit facility is secured against its national TV contracts. In July, the league reached an 11-year, $77 billion deal with ESPN, NBC and Amazon that tips off with the 2025-26 season. The average annual value increased more than 150% versus the prior agreement.
According to a June report from ratings agency Fitch, NBA league debt is $6 billion, of which $4.3 billion is through Hardwood Funding and $1.7 billion is the revolving credit line through an entity named Basketball Funding.
The recent $325 million debt limit includes $275 million secured against the franchise and $50 million in unsecured debt.
“The NBA’s business model and financial profile are consistent with the other ‘A’ category ratings for the National Football League (NFL) and Major League Baseball (MLB),” Fitch said in the note. “In terms of league business model, the NBA has demonstrated perhaps the strongest global growth in popularity in recent years, and renewal risk for its broadcast contracts is similar to that of peer leagues.”
The NFL, where franchise values have also soared, has been more aggressive in raising its debt thresholds. In 2020, the NFL raised its limit from $350 million to $500 million. It has subsequently raised it two more times to $700 million, with an additional $700 million in debt available for new buyers.
The NBA does not allow for additional debt in a team purchase.
