The NBA may finally be one step closer on the long road to expansion.
Saying owners have a “curiosity” about the notion, Commissioner Adam Silver said Tuesday that the league will now study the issue more formally as part of an in-depth analysis, which would be the first official move in a long process toward adding franchises.
There’s no timetable for how long the process will take, nor have any decisions been made on what the expansion fee will be, when the new teams will start play — or even if expansion is going to actually happen.
“A lot of analysis still needs to be done and nothing has been predetermined,” Silver said after the end of the league’s board of governors meeting in Las Vegas.
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The league isn’t creating a new committee to study expansion; the duties, for now, will fall primarily to a pair of existing groups, with the advisory finance committee leading and the audit and strategy committee also involved.
The decision to take a harder look at expansion wasn’t totally unexpected, since the notion of adding clubs has been a talking point for several years. Cities like Las Vegas and Seattle — long perceived to be the front-runners should the NBA decide to expand past its current 30-team footprint — will surely continue to push to be the eventual picks. And Silver himself has said previously that he expects expansion will happen at some point.
“I think there is a significant step now in that we are now engaging in this in-depth analysis, something we weren’t prepared to do before,” Silver said. “But beyond that, it’s really Day 1 of that in-depth analysis. And so, in terms of price, potential timing, it’s too early to say. … It is truly a complicated issue.”
The next board of governors meeting will likely take place in September.
Expansion has long been a difficult issue, since it’ll mean, among other things, that the current owners will have decided to sell equity in a league that is on a financial roll right now.
“For every team you add, you’re diluting the economics of the current league,” Silver said.
The NBA has had a long relationship with expansion candidate Las Vegas, mainly through its Summer League. (Photo by Ethan Miller/Getty Images)
A new series of media rights deals worth $76 billion kicks in for this coming season and franchise values across the league have soared. The two most title-laden franchises in the NBA, the Boston Celtics and Los Angeles Lakers, clubs that have combined for about half of the titles handed out in league history, are in the process of being sold with a combined valuation of at least $16.1 billion.
The Celtics are being sold to private equity mogul Bill Chisholm with a valuation of at least $6.1 billion, which was a record until the Buss family agreed to sell the Lakers to businessman Mark Walter — also the owner of the Los Angeles Dodgers — with a valuation of $10 billion.
“There’s no question that those purchase prices have an impact on any economic analysis of teams, so it doesn’t necessarily complicate it more, but it certainly is an indication of value,” Silver said. “And one other factor we have to look at: we’re trying to think what is the value of expansion, what does it mean to dilute the existing equity, and how additive is this potentially to the league by adding an additional team.”
Another team that could be sold before long: The Portland Trail Blazers.
Paul Allen’s estate announced in May that it has begun the process of selling the Trail Blazers.
“It’s the league’s preference that that team remain in Portland,” Silver said. “We’ve had great success in Portland over the years. … I know there are groups that are actively engaged with the estate and have demonstrated interest in that team.”
The Portland Trail Blazers may soon be up for sale, but the NBA would prefer the team to remain in the city. (Photo by Alika Jenner/Getty Images)
Silver said a factor in the sale is that the “city of Portland likely needs a new arena,” which he said would be part of the challenge for any new ownership group.
Allen, the billionaire co-founder of Microsoft, died in 2018 at age 65 from complications of non-Hodgkin lymphoma. Since then, his sister, Jody Allen, has served as chair of the Trail Blazers and the NFL’s Seattle Seahawks and trustee of the Paul G. Allen Trust.
The league has added seven franchises since 1988, but none since 2004. There have been several instances of rebranding and relocating since — most notably, the Seattle SuperSonics moving to Oklahoma City in 2008 and becoming the Thunder — but the league has been at 30 teams for the past two decades.
Las Vegas has a long relationship with the NBA, as a Summer League host and now the host of the title round of the NBA Cup. And Seattle is among the cities that has clamored for a team since the Sonics left.
“It’s an incredible market,” Silver said of Seattle. “I wish, standing here as the commissioner, I had lots of teams to dispense to many different markets who are interested in NBA basketball. I just think that we also have this greater obligation to expand, if we do so, in a very deliberate fashion and in a way that makes sense holistically for the league. So, that’s really the best I can do.”
Reporting by The Associated Press.
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