Moody’s CEO Says NCAA’s Future Credit Is Shaky

 Moody's CEO says an anti-trust lawsuit could damage the NCAA's ability to pay back debt. Aspen Photo / Shutterstock.com
Moody's says an anti-trust lawsuit could damage the NCAA's
ability to pay back debt.
Aspen Photo / Shutterstock.com
While the NCAA currently holds the third highest possible rating from Moody’s Investors Services, the credit rating agency issued a statement projecting a negative outlook for the organization.  Moody’s says that an anti-trust lawsuit and bad reputation of enforcement practices could damage the NCAA’s ability to pay its debt.  Moody’s CEO Ray McDaniels and his team of analysts warn that poor judgment in handling players will likely lead to poor financial judgment as well.
  
Former basketball player at UCLA Ed O’Bannon is leading an anti-trust charge against the NCAA, game company Electronic Arts, and Collegiate Licensing Company revolving around compensation for players in collegiate level football and basketball. Their likeness had been used for video games and merchandise without compensation.  The suit has potential to render over a billion dollars in damages paid to former and current athletes.  The suit is currently being weighed on whether or not it can be turned into a class action suit, which would invite thousands of players to ask for compensation from licensing.  Another reason Moody’s projects negative outcomes is due to a poor handling of an investigation in Miami.
  
Moody’s did not change the credit rating of NCAA and also cites that the organizations financial performance is outstanding.  Profits were at a record high last year, and the value of unrestricted assets have doubled since 2006.  A spokesperson for the NCAA said that it was unconcerned about the report, as long as the rating remains the same.  The organization is also confident in its abilities to win the suit against them.  

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