Sportico says 43% boost in Brooklyn Nets' worth affirms "value of owning an arena." It's also the billionaire Kochs pursuing a scarce commodity enabled by public largesse.

So, Sportico reported Dec. 18, NBA Team Values 2024: Warriors, Knicks Lead as Average Hits $4.6B, citing the impact of a new collective bargaining agreement and a a new TV deal,

But the key passage is here:

The value of owning an arena was on display in the recent investment by Julia Koch and her family to buy 15% of BSE Global at a $6 billion valuation. BSE is the parent company of the Nets, New York Liberty and Barclays Center. In April, the Barclays Center was the highest-grossing arena in the world, according to Billboard, and it finished the year ranked sixth overall. The value of the Nets is up an NBA-high of 43%.

Joe Tsai and Clara Wu Tsai bought the Nets and rights to the Barclays Center in stages, starting in 2018. The following year they consolidated ownership at a $3.3 billion valuation. It was the highest price ever paid for control of a U.S. sports team.

That deserves a little skepticism. The arena's gross earnings do not translate into big profits--a moderate one in the last year, as I reported, which was an uptick from past losses. 

Also, the Billboard valuation for April involved concerts and other events (but not sports), while such events were limited, for example, at rival Madison Square Garden because both the NBA's New York Knicks and NHL's New York Rangers had playoff games scheduled.

Nor do Tsai and the Koch family own the arena, though that's common shorthand. They own the arena operating company and the arena's economics, though nominal state ownership allows for tax-exempt land and tax-exempt financing.

Public assistance

So the "value of owning an arena company goosed by public largesse" is what's really on display, which is why, as I've argued, the arena operating company should pay for the right to a permanent plaza.

Also on display: as the eagerness of billionaires, who don't need to be chasing bargains, to invest in some high-profile scarce commodities, which bring a nice halo.

In 2023, Sportico valued the Nets and arena at $3.98 billion, which was only 13th in the 30-team league. 

What changed since then? The emergence of an eager investor.

In October 2024, Forbes valued the team and arena company at $4.8 billion, despite limited profits. 

Why the $900 million difference with Sportico? Unclear, though it could be that Sportico more generously values the New York Liberty, for example.