Sunday, July 11, 2010

Dallas Cowboys and Stadium debt: great class example

So you know all the ratios and projections we use in class? Well here they are in practice with the case of the Dallas Cowboys and Cowboys Stadium. A definite example for class!

Tax income to pay Cowboys Stadium debt is beating projections | News for Dallas, Texas | Dallas Morning News | Latest News:
"Vrooman said Arlington residents should feel 'relatively safe' about the financial health of the bonds, although he's not a fan of many stadium deals. Although the cost split between the city and Cowboys is better than many stadium financing deals, he said that 'does not serve to justify the use of public money for private Dallas Cowboys gain.'

Kenneth Daniels, a finance professor at Virginia Commonwealth University in Richmond who researches municipal bonds, wrote in an e-mail that the flat revenue projections from the city were 'atypical' and probably unusually conservative because the debt required voter approval.

He also said the debt-to-revenue ratio is a little thin between 2018 and 2027, but the size of the reserve fund 'seems reasonable.'

'A lot of deals would probably be more aggressive and would project revenues growing over the time,' Yelverton said.

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