NFL reportedly agrees to raise debt limit to $500M per team

As leagues try to brace for the economic impact of the COVID-19 pandemic, the NFL has reportedly reached an agreement with club executives to raise the debt limit for each team from $350 million to $500 million.

The two sides brokered the deal during a conference call on Monday and owners will officially vote on the proposal next Tuesday, May 19, according to ESPN's Seth Wickersham.

Typically, a team's debt limit is raised if they are building a new stadium, but with the league estimated to lose over $2 billion in revenue this season, team executives have been discussing for weeks the possibility of raising debt limits.

Raising the debt limit would give teams access to extra money in the event they are forced to play in empty stadiums. While the NFL is still scheduled to begin on time, most experts say that even if that timeline is possible games won't be played in front of fans. Patrick Rishe, who is the director of the sports business program at Washington University in St. Louis, estimated for ESPN that for each week played without fans, the league could lose up to $138 million in revenue.

While some states have indicated they plan to allow fans to attend games in the fall, others have been adamant in stating that sporting events will not have fans for the foreseeable future. In April, California Gov. Gavin Newsom said he did not anticipate that California would have any mass gatherings without "herd immunity" and a vaccine, which would include sports.

"The prospect of mass gatherings is negligible at best until we get to herd immunity and get to a vaccine," Newsom said.

Even with a higher debt limit, teams may quickly find themselves facing a difficult financial situation if the pandemic continues as it has for the past few months.