Back in December, NBA commissioner Adam Silver sparked the fire for NBA expansion.
“I think I’ve always said that it’s sort of the manifest destiny of the league that you expand at some point. I’d say it’s caused us to maybe dust off some of the analyses on the economic and competitive impacts of expansion. We’ve been putting a little bit more time into it than we were pre-pandemic. But certainly not to the point that expansion is on the front burner,” Silver said.
Following Silver’s comments, ESPN reported that a potential asking price for an expansion team would be $2.5 billion. Brian Windhorst wrote in early January, “Within the league office, sources said officials have floated the price tag of $2.5 billion each for two expansion teams in the near future.”
But now Silver is trying to drive up the cost of a new team. He told Sportico, “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.”
If $2.5 billion is not enough for the NBA, then will it take as much as $3 billion to land a brand new franchise?
There are some important comparisons for a potential Las Vegas NBA team. First off the highest priced sale of an NBA franchise was the Brooklyn Nets, who sold for $2.35 billion in 2019. Only three teams have ever been sold for more than $2 billion in the Nets, the Rockets ($2.2 billion) and the Clippers ($2 billion).
The Minnesota Timberwolves are for sale right now, but ESPN marked the valuations of the franchise at $1.5 billion. A full billion dollars off what Adam Silver deemed too low for an expansion franchise.
The direct Las Vegas comparison is the Golden Knights, who entered the NHL in 2017 after paying a $500 million expansion fee. The NHL did raise the expansion fee for Seattle to $650 million, still nowhere near the NBA’s potential asking price.
There is no doubt an NBA franchise will cost more than an NHL franchise. Forbes valuations ranks the Memphis Grizzlies last in the NBA at $1.3 billion, which ranks higher than all but three NHL teams.
But it will be hard to see a Vegas NBA team as good value when paying five times the Golden Knights expansion fee might not be enough.