Sports financing could tighten with CIT bankruptcy

By Ben Klayman - Analysis

CHICAGO (Reuters) - Sports markets already losing business due to the tight credit markets and weak economy could get worse if embattled U.S. lender CIT Group Inc files for bankruptcy, analysts and sports bankers said on Thursday.

Shares of CIT, which lends to hundreds of thousands of small and medium-sized firms including sports teams, plunged more than 74 percent due to investor fears of a failure after the company said last-ditch bailout talks with U.S. Treasury officials had ended.

CNBC television, citing a source close to the company, said CIT, which has about $75 billion in assets, is now pursuing a plan that is likely to include a Chapter 11 bankruptcy filing on Friday.

While CIT's sports advisory and finance group is only a small part of the company's portfolio, it has arranged financing for a number of hockey, basketball and soccer teams in the United States, Canada and England.

While CIT is not considered a major player in the sports finance market, its potential exit would worsen an already tight credit market, especially for teams in the National Hockey League, analysts and bankers said.

"It's going to hurt at the edges and it's indicative of how little capital will be available for sports owners, especially if they want to do any kind of refinancing or take on additional debt," said Robert Boland, professor of sports management at New York University.

"The pool of sports financing has collapsed over the last few years," he added.

Officials with CIT as well as within its sports advisory group could not be reached to comment.