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Sports Authority to Miss Key Debt Interest Payment

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Your local Sports Authority may be going under within a year or two if the company does not start paying its debt. As the company isn’t public, there’s a lot we don’t know. Here’s all the information from SportsOneSource, and be sure to check out the exclusive Reuters article. Bloomberg also did a great article about the debt.

sports authority debt

Sports Authority Inc. told Reuters it would miss a key debt interest payment as it continues to hold talks with lenders around a debt restructuring.

The retailer said in an e-mailed statement, released to Reuters and Bloomberg, “Although Sports Authority currently has sufficient liquidity to conduct its business operations and to make the current interest payment on the subordinated mezzanine debt, after consultation with our senior lenders, we elected not to make the interest payment while we continue these discussions.”

The retailer said in its statement it was engaged in discussions with its various lenders and working with Rothschild & Co. to explore options for strengthening its balance sheet.

The Reuters article noted that missing the $20 million coupon payment could trigger cross-defaults across the rest of the company’s debt.

The payment is the interest on its privately placed $343 million subordinated notes maturing in 2018, according to a report on Bloomberg. The retailer has at least $643 million in debt, including a newly extended $343 million in subordinated notes maturing in 2018, according to data compiled by Bloomberg and Moody’s Investors Service Inc.

Sports Authority is owned by private equity firm Leonard Green & Partners LP.

  1. always bummed to see a business go under, buts its a miracle they lasted this long. They never include the clothes i want, are way too large to be efficient, and I never find thier staff to be happy. Another business like Circuit City and Radioshack where future customers will just adjust to visiting walmart or online shopping.

    1. Only good experiences I ever had in SA were those little indoor “half courts” they would have where you could shoot around. Sad to see them possibly go under, but they haven’t adjusted to the current retail climate.

  2. Sad to see them go but the competition is stiff. I think I bought a pair of Lebron slides from them as a gift, and that was it.

  3. I’d think it’s another case of being victim of online retail.

    Ever hit up the clearance section for shoes? It’s a bunch of team models, and stuff like yesteryear Hyperdunks can’t dip below $100 last I remember; and with that it’s also a case of limited selection, as well as no box. Rather just go to Eastbay or something (or even Nike directly), and get something nicer and/or cheaper.

    I’m wondering if/when Big5 is gonna go. Not trying to hate on anyone who shops at the lower price point, but I like never see anyone in the stores I’ve visited lately. I feel like they’re straight up the RadioShack equivalent of sporting goods stores.

    1. ” yesteryear Hyperdunks can’t dip below $100″
      Truest fact I’ve seen in a while. It seems like Sports Authority refuses to lower their prices on those kind of things.

  4. Well, they did say that they were liquid enough to pay the interest and continue operations. It may not be the end yet, especially if they’ll succeed in their debt restructuring plans. Although I agree that external factors such as stiffer competition makes this an unlikely upside.

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