If you don’t think the NBA business is booming, check out the price tags for the last couple NBA teams sold: The smaller market Sacramento Kings just sold for $534 million, the small market Grizzlies sold for $377 million. Remember that just a few years ago the majority of the big market Philadelphia 76ers sold for $280 million.
Why the jump in prices? For one, there is a new Collective Bargaining Agreement that is much more favorable to owners (who now get just about half of the NBA’s gross revenue, up from 43 percent in the old CBA). Secondly, the NBA is in the process of renegotiating its television rights deal at a time of record prices for sports rights deals.
Basically, owners are getting more money in their pockets.
All of which is why there are no teams for sale right now (sorry Seattle), NBA Commissioner-in-waiting Adam Silver said Tuesday, as reported by Brian Windhorst at ESPN.com.
“As we look at the coming domestic television deal and a great playoffs and Finals, there’s a great buzz around the league right now,” Silver said at the Bloomberg Sports Business Summit. “There aren’t any teams for sale but if there were [the price] would be robust.”
Robust = very expensive.
The new television deal is the focus — and should be for the players as well. The NBA salary cap is set based on a percentage of league revenue, so a bigger television deal means more money for teams to spend on players.
The NBA is first negotiating with its existing partners — ESPN/ABC, as well as Turner Sports which runs TNT and NBA TV — but if those talks don’t go where the league wants there are other media conglomerates out there that want a foot in the door. David Stern himself has said he likes how the NFL has games spread across every network and nobody blinks.
Adam Silver, however, works to get a consensus with the owners in a way Stern does not. Which is why Silver said Tuesday a committee of owners will help with the new television rights deal.
“There’s probably calls for more owner involvement than we’ve had historically,” Silver said. “There’s a new generation of owners who’ve become involved in the league. There’s more a sense of activist owners … these days led by Mark Cuban and others there are more full-time owners. It’s a recognition that even for very wealthy people, it’s a much larger percentage of their portfolio.”