Fancy financing in Yanks’ future?

By LUKE CYPHERS

         If the Mets and Yankees want new space-age ballparks, they may have to follow a money trail blazed by Ziggy Stardust himself, David Bowie.
         Asset-backed securities, which rock stars such as Bowie have used to make money off future royalties from their old albums, have caught the eye of the sports world – and could minimize the taxpayer share of the up to $1.5 billion cost of building two new stadiums in New York, some financial experts say.
         “There’s going to be a new wave of financings for sports, and not just in New York City,” predicts financier David Pullman, director of the Pullman Group, a division of Fahnestock &Co.
         Pullman, who rocked the music world by helping pull off the $55 million “Bowie Bonds” deal in 1996, says the market is ripe.  “You could sell bonds backed by future ticket sales, skybox revenues, advertising, even concession and program sales,” he said.
         Here’s how the scheme might work: A bank could issue bonds against revenue from tickets, concessions, luxury boxes and stadium-naming rights.  Institutional investors could buy the bonds, providing cash towards stadium construction.
         Investors are then paid back, usually at a better yield offered by corporate bonds.  It’s already been done with a British soccer team and is starting to catch on in the U.S.
         Street and Smith’s SportsBusiness Journal reports in today’s debut edition that Ascent Entertainment, the owner of the Denver’s NBA and NHL franchises, plans to issue $130 million in asset-backed securities to help pay for the $160 million Pepsi Center arena.
         Ascent spokesman Paul Jacobson said that while the deal isn’t complete, “It is indeed something we’re looking at doing.”
         Mayor Giuliani has pledged no new taxes to build stadiums, but said he would consider extending a corporate tax on Manhattan businesses to help raise $600 million for ballpark construction.
         That falls far short of the estimated $800 million to $1 billion needed for a West Side ballpark for the Yankees plus the $500 million for a retractable-roof park for the Mets.
         Mets owner Fred Wilpon, a real estate developer, said he’s “very familiar” with asset-backed securities.
         “It is certainly something that is doable in sports,” he said.
         Still, there are risks: Ticket sales and concessions could dry up during player strikes, for example.
         “If you use all of your assets to borrow money, who’s liable for that money if something goes wrong?” Wilpon asked.
         Cautions Pullman, “You have to be careful you write the contracts so they pass all that risk on to the holders of the naming rights, for example, or to the advertisers.
         “It can be done, but in baseball, it is a little more volatile.”

DAILY NEWS April 27, 1998