No teams for sale as TV deal looms
NEW YORK -- With franchise values soaring and a lucrative TV rights deal on the horizon, incoming NBA commissioner Adam Silver said Tuesday that currently no teams are for sale.
"As we look at the coming domestic television deal and a great playoffs and Finals, there's a great buzz around the league right now," Silver said at the Bloomberg Sports Business Summit. "There aren't any teams for sale but if there were [the price] would be robust."
“This is a significant departure from the last three-plus years, when teams were selling both cheaply and quickly as nine franchises sold, many at reduced values. It may have reached its nadir in 2011 when Michael Jordan purchased a controlling interest in the Charlotte Bobcats for less than $200 million and the big market Philadelphia 76ers changed hands for a reported $280 million.
There's a new generation of owners who've become involved in the league. ... It's a recognition that even for very wealthy people, [teams are] a much larger percentage of their portfolio.” -- Adam Silver,
incoming NBA commissioner
Those depressed sales figures contributed to the 2011 lockout, and owners won significant concessions from players because of financial struggles. The NBA owned the New Orleans Pelicans franchise for nearly 18 months from 2010-12 as it waited for a suitable offer before selling for $338 million to Tom Benson.
The more favorable collective bargaining agreement plus what is expected to be a large jump in rights fees starting in three years have reversed that market. The Memphis Grizzlies sold last fall for $377 million. In May, Vivek Ranadive bought the Sacramento Kings for a record valuation of $534 million. Shortly thereafter, Ranadive sold his minority share in the Golden State Warriors at a price that would value that franchise at $800 million.
"[Ranadive] saw the best deal in sports as the least expensive NBA team because he was buying 1/30th of our global prospects," Silver said.
The dearth of available teams may have been one of the reasons hedge fund manager Chris Hansen bankrolled a secret effort to undercut Ranadive's arena deal in Sacramento. Hansen funneled $100,000 to a political action committee hoping it would eventually re-open the option of moving the Kings to Seattle.
Hansen tried and failed to buy and relocate the Kings earlier this year. He still hopes to bring a team to Seattle but sees no teams are for sale and there are no plans for expansion.
The current situation may create a bubble as owners wait until after the new TV deal is settled to put their teams back on the market. Negotiations are expected to start next year after Silver takes over for David Stern as commissioner Feb. 1.
Silver said Tuesday that for the first time there will be a committee of owners formed to oversee the TV contract talks. It is believed to be the start of a new era in the NBA where the commissioner will be more open to input from owners on league-wide deals than was previously the case with Stern running the league.
"There's probably calls for more owner involvement than we've had historically," Silver said. "There's a new generation of owners who've become involved in the league. There's more a sense of activist owners ... these days led by Mark Cuban and others there are more full-time owners. It's a recognition that even for very wealthy people, it's a much larger percentage of their portfolio."
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