Just like much of the other American professional sports leagues, the NBA front office has confirmed it’s in need of a cash infusion. This wasn’t a direct confirmation, by any means. However, according to ESPN’s Brian Windhorst, the league office has floated the idea of a $2.5 billion price tag for any potential expansion teams.
NBA Expecting $2.5 Billion for Expansion Teams
The league has not expanded since 2004 when the Charlotte Hornets – formerly the Charlotte Bobcats – joined the league. While this happened more than 15 years ago, the Bobcats only paid a $300 million price tag.
This latest $2.5 billion figure crushes the previous mark by a landslide. According to reports, this stems from the league’s major loss of revenues throughout the COVID-19 pandemic. The profit losses equated to a 10 percent reduction or $1.5 billion loss across the league.
Currently, the league has no official plans to add expansion teams, but the rumors have been swirling. Floating a potential expansion fee is the first concrete evidence fans have seen of this actually taking place. Seattle and Las Vegas have emerged as “early favorites” to potentially land new NBA expansion teams.
How exactly would these negotiations look? Ownership groups and cities would submit bids to the league. Then, the league office would sell these potential expansion spots for cash, which is immediately integrated into the NBA’s profit numbers. Expansion fees are evenly divided amongst the 30 current NBA franchises. If the league is successful in adding two teams at a $2.5 billion fee, then this would give each current team $166.7 million.
To add some additional perspective to these massive price tags, take a look at the two most-recent franchises to change ownership groups. In 2017, the Houston Rockets were sold to Tilman Fertitta for $2.2 billion. In 2019, Joe Tsai bought the Brooklyn Nets for $2.35 billion. Keep in mind, New York is the country’s largest media market, and Houston ranks eighth, above both Seattle and Las Vegas.
Shortly after NBA Commissioner Adam Silver and his office floated this potential price tag, Seattle Mayor Jenny Durkan expressed her optimism.
“It is very good news for the city of Seattle that they are thinking of an expansion team,” Durkan said. “And I was honest with [Adam Silver]. He knows Seattle wants to be at the front of the line. We’re where the team should be.”
Seattle Mayor Jenny Durkan said she has talked with NBA commissioner Adam Silver and is "pretty optimistic" about landing an expansion franchise. https://t.co/JUVSYgnjT5
— NBA on ESPN (@ESPNNBA) January 8, 2021
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