Quote:
Originally Posted by AltaGuy
I would argue that paying $250M up front, which would undoubtedly be financed, could certainly be more crippling than giving up $15M in revenue perpetually.
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Why? As I said, you can service $250m in debt for $15m a year, and you can arrange that debt so that the payments are fixed until the debt is retired — over 25 years, let us say. But if your concessions and parking are worth $15m a year today, they will be worth much more than that in 25 years, and you'll be out the difference. After the 25 years, the debt servicing cost falls to zero, but the lost revenue keeps on increasing.