This is why the reported asking price for an NBA expansion team of $2.5 billion struck some as a little high. That’s more than was paid for a team in the largest media market in the nation, and that fee is just the first of a lot of expenses for any new owners (there are expected to be two expansion teams, if the NBA goes that route).
Adam Silver says that $2.5 billion number is a little low.
Silver spoke at Sportico’s NBA valuations event this week and said this:
The commissioner was “not ready” to confirm the number of teams or the price point the league would seek if it were to add clubs. He said it “doesn’t feel like the right time” to focus resources or attention on future growth with the league still trying to navigate the pandemic. But Silver did say that “clearly [the] valuations [show] some of the reported numbers [for expansion fees] are very low in terms of the value at which we would expand.”
Let the NBA expansion negotiations begin.
Silver’s comments are exactly what the seller should say, hoping to drive up the buy-in price for a new team. The market may have different ideas. The NBA argues that its growth is largely international, not just domestic, and with the league positioned as the pinnacle of basketball fans and viewership will only grow in markets such as Europe and China (not to mention India and other places the NBA is planting its flag). It’s a valid argument, and it’s easy to get the games and highlights to those countries in a more digital world, but is it a $2.5 billion argument?
If teams are added, sources have told NBC Sports Seattle is considered a near lock to get one of them. The NBA wants to return to that market (and the team would be the Sonics). After that, a number of cities — Las Vegas, Louisville, Kansas City, and any other large city with a billionaire willing to pay the fee — could be in the mix. The NBA would love to create a bidding war between a few cities.
We likely will not know for sure how this plays out for a year or more. But the public negotiations have begun.