TrueHoop: NBA expansion seems likely, new media deal means "the value of every team will double"

The Brooklyn Nets are struggling, down 3-0 in their first-round playoff series against the formidable Boston Celtics, and, even in the unlikely case of a victory at home tonight, no one expects them to beat Boston in four consecutive games.

That means the loss of potentially 6-10 more home playoff games, should the Nets proceed and meet their pre-season hype, and the attendant revenue from sellout crowds, bolstering both the team and the arena operating company.

But don't cry for billionaire Joe Tsai, who owns the team and the operating company; he's winning the long game.

In his valuable TrueHoop newsletter, Henry Abbott wrote 4/21/22, Odd silence around NBA expansion to Las Vegas and Seattle, noting that the well-connected arena developer/operator Oak View Group "appears to be well positioned in Seattle and Las Vegas to host the NBA’s next expansion teams."

Seattle already has an arena, and Las Vegas is getting another one. No longer are there worries about dilution of the talent pool, given the increasing number of international players. Nor are there qualms about housing a team in the nation's gambling mecca, given the expansion of gambling nationwide. (Though that, surely, will have some negative consequences.)

Big money at stake

Abbott writes:

The NBA is currently in talks on a new media deal to follow the current ESPN/Turner agreements which pay the lion’s share of the NBA’s bills. Word is that the league will hit the streaming wars with impeccable timing and get such a giant raise that the value of every team will double. In that world, sources say the NBA’s lowest-value team, the Pelicans, would be worth more than $2 billion, while the Warriors could skyrocket to a $10 billion valuation.

Whoa. The value of the Brooklyn Nets, bundled with the arena operating company, was assessed last year by Forbes at $3.2 billion and Sportico at $3.6 billion. Subtract approximately $1 billion for the arena company, and that would mean a more than $2 billion boost for billionaire Joe Tsai.

Then there's big money from expansion fees, which would be shared among the owners: "For example, $9 billion divided 30 ways could mean $300 million for every team."

And that would help "placate billionaires still chafing from losses of recent years," given the pandemic and the contretemps with China. 

Of course, billionaires like Tsai have seen the value of their teams grow, but they're just not cashing out. 

Abbott points to a potential clash between team owners--er, governors--and the players, unless the latter take action to get a share of the new revenues. So stay tuned for that.