ANALYSIS-Sports financing could tighten with CIT bankruptcy

* CIT sports group has arranged financing for NHL teams

* Also has backed NBA, Premier League clubs

* CIT exit would hurt already-shaky sports finance market

By Ben Klayman

CHICAGO, July 16 (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 CIT.N 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. [ID:nN16402649]

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.

Among the teams to which CIT has loaned money or arranged
financing over the last few years are the Edmonton Oilers,
Ottawa Senators, New Jersey Devils, Nashville Predators and
Dallas Stars of the NHL, as well as the National Basketball
Association's New Jersey Nets and Manchester United of soccer's
English Premier League.

Spokesmen for the Senators and the Predators declined to
comment, while officials with the other teams could not be
reached.

NHL officials also declined to comment on CIT, but
Commissioner Gary Bettman said on Wednesday that the North
American sports league is weathering the recession fairly well.
He cited record attendance and revenue, higher TV ratings and
continued strong corporate sponsor support.

TROUBLES BETWEEN THE PIPES

Bankers wonder whether CIT is backing the almost $575
million bid by the Molson family to buy the Montreal Canadiens
from George Gillett.

A spokesman for Gillett and the storied NHL team declined
to comment on the pending deal and its structure, while a
spokesman for the Molson family said only that the deal is
expected to close by the end of the summer.

CIT's troubles are not welcome for the NHL as the bank was
one of the few still providing cash for the league, several
analysts and bankers said.

"Whenever you take a player out, whether they're a lead or
a syndicate financial source, these days there are very few
substitutes," said Marc Ganis, president of Chicago consulting
firm Sportscorp Ltd.

"It's really an odd situation for (the NHL) because in many
cases the league is as strong as it's ever been, but there are
a number of very distressed franchises and there isn't a great
pot of gold at the end of the rainbow," he added.

In May, the NHL's Phoenix Coyotes filed for bankruptcy,
while the month before creditors declared Texas billionaire Tom
Hicks' sports group, which owns the Stars and the Texas Rangers
baseball team, in default on $525 million in loans.

Last year, CIT helped finance half of a Canadian
businessman's $200 million purchase of the Edmonton Oilers,
while the year before it arranged $130 million in loans to
allow the Ottawa Senators to refinance their debt.

One sports banker, who asked not to be identified because
he works closely with sports teams, said a possible CIT exit
"will put yet another dent in sports financing liquidity if it
happens."
(Reporting by Ben Klayman; editing by Patrick Fitzgibbons and
Matthew Lewis)