Football with NFL logo.
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The National Football League plays a big role in increasing credit in underrepresented communities.
The league is borrowing $78 million from a syndicate of black- and minority-owned banks and community development financial institutions.
A loan transaction will generate “Tier 1 capital” for banks and CDFIs. According to the National Black Bank Foundation, it will strengthen their credit strength by millions through bank fees and interest. The full terms of the loan are not disclosed.
However, Joe Siclare, the NFL’s executive vice president of finance and league policy, said the terms are at “market rates” and the league plans to fully draw down the loan within the next three years.
“These banks play a critical role in our overall economy, and many of them are in markets where our teams play, so there’s good synergy,” Siclare told CNBC.
“These community banks sometimes struggle to navigate economic times. When large corporations like the National Football League can partner and provide reliable sources of revenue, it helps these banks continue the great work they do in their communities,” he added.
The NFL deal follows a similar $35 million loan related to Atlanta Hawks of the National Basketball Association for a practice facility in 2020 and a $25 million loan Major League Soccer in 2022, both arranged by the NBBF and a syndicate of black-owned banks.
NBBF co-founder Ashley Bell hopes the deals will demonstrate that black-owned and minority-owned banks are viable long-term partners for large corporations, especially with the threat of an economic downturn or recession likely to have a greater impact on communities of color.
“These banks lend money to people and businesses that need it without being predatory. That gives them some breathing room. These banks are centers of hope across the country. Whether it’s Martin Luther King Jr Drive or Main Street,” he said Bell. Those are the places people go to get opportunity, and by supporting those institutions, the NFL supports those communities.”
The NFL consulted with American bank and NBBF for her loan.
“At a time when community banking is being questioned, this is definitely a shot in the arm,” Bell said.
Bell said the regional banking crisis triggered the collapse of Silicon Valley Bank in March has the potential to destabilize many black and minority financial institutions. The NBBF says that in many cases, black and minority-owned banks are “hyper local,” providing 85% or more of their loans to underrepresented groups in their area.
“Making a deal with an entity like the NFL will help your brand. It will help people understand that you can do a comprehensive deal. So if you can make a deal with the NFL, you can certainly trust that bank with your home loan.” ” Bell said. “You can certainly trust that bank with a line of credit for your business, your church, your religious organization. You can go to her and trust that you will get the best service.”
According to Dominik Mjartan, CEO of Optus Bank in Columbia, South Carolina, one of 16 partner financial institutions, the NFL’s involvement will create an opportunity for black and minority-owned banks to make money and put that money back into the community. loan.
“The NFL gives us this chance to participate and enhances our ability to fulfill our mission of serving underserved, underserved customers and high-potential communities,” he said.