OREANDA-NEWS. November 25, 2015. Fitch Ratings has assigned an 'A' rating to the Major League Baseball (MLB, or the League) Club Trust Securitization's approximately \\$1.02 billion amended and extended Series 2015 Senior Secured Credit Facility.

Additionally, Fitch has assigned an 'A' rating to MLB's Club Trust Securitization's \\$117. 8 million term notes consisting of \\$55.3 million of series 20, \\$5.3 million series 21, \\$22.1 million series 22 and \\$35.1 million series 23.

The Rating Outlook is Stable.

KEY RATING DRIVERS

The rating reflects the trust's core underlying business fundamentals including MLB's unique operating model and environment, which continue to perform positively including during the most recent economic downturn. Television contracts renewed in 2012 at extremely favorable levels correspond to near-term projected leverage of 2.0x, declining over the medium-term. Additionally, the diversity of MLB revenues from MLBAM and revenue sharing has bolstered individual team financial health. Despite the discretionary spending nature of sports, MLB has maintained solid attendance levels and corporate support at their respective facilities. In addition league level sponsorship and advertising partnerships have grown over recent seasons notwithstanding tepid economic conditions.

Solid Underlying League Economics

Debt service is supported by large contractual revenue streams from investment-grade counterparties. A collective bargaining agreement (CBA) is in place through the 2016 season, which includes core elements that promote financial stability and competitive balance, which Fitch addressed at the time of the new CBA. Major League Baseball continues to maintain stable domestic fan attendance and viewership base, and a growing international fan base.

Established League Oversight and Governance

The league's has demonstrated willingness to step in and aid 'distressed' franchises. For example, the league assisted the Texas Rangers and Los Angeles Dodgers during ownership issues.

Solid Legal Covenants and a Demonstrated Bankruptcy Remote Structure

Structural provisions ensure timely debt service. The MLB Club Trust structure utilizes a bankruptcy-remote securitization consisting of pledged revenues derived from long-term national broadcast contracts in place through 2021. Noteholders benefit from the bankruptcy remote structure, which eliminates team-related risks (as was demonstrated in bankruptcy filings of the Rangers and Dodgers); however, they remain subject to all the fundamental operational risks of MLB.

Long History of Television Contracts

In 2012 MLB entered into eight-year television contracts with ESPN (Disney; 'A'/Stable Outlook), FOX Broadcasting Company (NewsCorp.;'BBB+'/Stable Outlook) and Turner Broadcasting System (TBS) (Time Warner, Inc; BBB+'/Stable Outlook). The contracts, which took effect in 2014 and run through 2021, represent a 100% increase in annual rights fees and will deliver \\$12.4 billion in combined revenue.

Refinancing Risks Expose Teams to Potentially Higher Costs

The bullet maturities associated with the notes and bank renewals associated with the revolving credit facility expose the teams to potentially higher interest costs.

Peers

MLB's current leverage of around 2.0x, migrating toward 1.8x in the future, is comparable with the NFL's leverage of 1.6x and lower than the NBA's 3.92x. A unique feature of the MLB facility is that it benefits from a bankruptcy remote structure which isolates noteholders from team-level financial risk.

RATING SENSITIVITIES

Negative: A significant decline in national television contact rights fees, due to termination of new contracts.

Negative: A substantial change in individual and corporate spending on MLB related content materially weakening financial metrics.

Negative: Future additional debt, without offsetting revenue increase, that causes leverage (on a team basis) to materially increase above 2.0x.
Positive: Given near-term projected leverage under the borrowing program, additional near-term positive movement is unlikely.

TRANSACTION SUMMARY

MLB plans to refinance approximately \\$1.02 billion as part of its Senior Secured Credit Facility, which will amend certain terms (pricing) and extend the maturity to 2020. The transaction effectively extends the maturity of the facility originally coming due in December 2015 to December 2020. The refinancing is scheduled to close in December. The series 20 - 23 notes will refinance outstanding notes and will mature between 2022 - 2030.

In 2015, MLB recorded its seventh largest attendance total in history and was slightly up from 2014 to 74.8 million from 74.7 million. Each of the most-well attended seasons in MLB history has occurred over the past decade. Additionally, ticket revenue in 2015 reached an all-time high

The MLB Trust is a bankruptcy-remote Delaware statutory trust established and owned by the member clubs of MLB that choose to participate in the MLB Club Trust Securitization. MLB currently has 30 teams in major metropolitan areas in the U.S. and Canada, of which 22 participate in the MLB Club Trust Securitization.

For more information on the MLB, please see Fitch's press release 'Fitch Rates MLB Club Trust Securitization Sr. Secured Term Notes 'A'' dated June 9, 2015 available at www.fitchratings.com.