Report: NHL borrows $1 billion to divide among teams

The NHL has put itself into a sizeable financial hole to offset the monetary impact of the COVID-19 pandemic.

The league has added approximately $1 billion in new debt on the private placement market, Sports Business Journal's Mark J. Burns and Chris Smith report. The NHL will create a central entity with the funds to allow all 31 teams to withdraw as much as $30 million to account for cash-flow problems, payroll concerns, and additional operating expenses.

The funds are reportedly secured against future league revenue. The lenders could not be identified, and the NHL declined to comment.

A league-wide credit facility already exists, but this is separate from that system, according to Burns and Smith, who added that some teams that have "well-financed" owners aren't likely to take advantage of the opportunity.

NHL commissioner Gary Bettman acknowledged earlier this month that the league is expected to lose billions of dollars this season.

The NBA took a similar step in December, raising $900 million in debt to dole out $30 million to each of its 30 clubs.