The NBA could be looking to expand westward once its current television deal expires following the 2024-2025 season.
Not that it needs to be said but… owning a sports franchise is a lucrative investment.
Valuations for the four big sports leagues have exploded over the past three decades as media rights contracts have jumped in value.
In the NBA, the Golden State Warriors are the second most valuable franchise.
The Warriors currently have a $5.6 billion valuation, according to Forbes. That valuation is more than 10 times what the franchise was valued at a decade ago, when it was worth $555 million.
But neither winning nor a brand spanking new state of the art facility represent the largest piece of the valuation pie for the Warriors.
According to Forbes, about $2.9 billion of the team’s value comes from the annual revenue the team shares with the rest of the NBA.
About $1 billion in valuation comes from the team’s brand, which is of course aided by the team’s winning ways over the past decade (the Warriors have won three recent NBA championships).
In fact, the stadium is the smallest piece of the valuation pie, according to Forbes, accounting for less that $300 million.
Besides revenue sharing, the San Francisco/Bay Area market represents the largest piece of the pie, accounting for $1.4 billion.
So needless to say the city in which a sports franchise resides is a big part of how valuable that franchise is. This fact is something to keep in mind as rumors swirl that the NBA is looking to expand.
NBA Looking at Vegas, Seattle for Expansion
Basketball columnist Jon Canzano predicts that the NBA will announce two new expansion teams once its current media rights deal expires in 2024, with Seattle and Las Vegas being the lucky winners.
Seattle lost its NBA franchise to Oklahoma City following the 2008 season after more than 40 years in the Emerald City. But Seattle has some work to do to build an NBA-ready arena.
Meanwhile Las Vegas seems to already be prepared to welcome an NBA franchise.
Over the past few years, Las Vegas has welcomed the NFL and NHL to the desert, with the Las Vegas Raiders and Vegas Golden Knights both relocating there.
Sports and entertainment venue builder Oak View Group announced that it plans to break ground next year on a privately financed arena that will sit on 25 acres of land near the corner of Las Vegas Boulevard and Blue Diamond Road.
“This unprecedented project is an industry game-changer, and we will usher in the evolution of Las Vegas as the new entertainment and sports capital of the world,” Oak View CEO Tim Leiweke said, Venues Now reported.
The arena is expected to be the centerpiece of a $3 billion entertainment area that will feature a casino and a 2,000-room hotel.
Any NBA team looking to pick up sticks and move in the near future could use the arena as a future home. In the meantime, just a few blocks north, MGM’s (MGM) – Get MGM Resorts International Report T-Mobile Arena seats between 17,000 and 18,000 people and could be used as a home stadium until the new arena is completed.
This joins a plan on the North Strip, which will also contains an NBA-ready arena.
“A multibillion-dollar funding package was unveiled this week for former NBA player Jackie Robinson’s arena and hotel project, a long-sought venture on the north Strip that has seen other financing plans come and go,” the Las Vegas Review-Journal reported.