So, to the surprise of absolutely no one who follows such things, Moody’s Investors Service lowered the ratings of the already junk bond debt of about a billion dollars that the Harris County-Houston Sports Authority issued to finance construction of Reliant Stadium, MinuteMaid Park and Toyota Center:
Moody’s believes the liquidity reserves are sufficient to cover the November 2010 payment, but their depletion may result in a payment default from pledged revenues as early as March of 2011, the report said.
If hotel occupancy tax and motor vehicle rental tax revenue continues to decline through 2010, the ratings could face further pressure, Moody’s said. Revenue from those taxes to the Sports Authority dipped by 11.7 percent in 2009 and are continuing that trend in 2010.
Of course, the romantics among us think it would be peachy to borrow even more money and resurrect the Astrodome into another kind of white elephant. This despite the fact that the markets has been telling us for over a decade now that there is no profitable purpose for it.
Meanwhile, most professional sports franchises are not doing all that well these days even with local governments providing these huge public subsidies
So, highly-leveraged debt, a high-priced product, increasingly unprofitable operations, and intense competition from a myriad of different (and substantially cheaper) forms of entertainment.
Does anyone else think that this pro sports bubble is about to burst?