Under the broad outlines of a plan, the league would development an investment fund that would make passive minority investments in existing NBA teams. For cash-strapped teams, it’s a way to improve liquidity; it’s also a way for teams to bring in passive investors. Currently the NBA is a franchise league, but allowing owners to invest in other teams moves the league a step toward a membership league. Most older major-league leagues, such as the NFL and MLB, are franchise leagues; MLS, most notably, is a membership league, where owners buy into the league as a whole and then also receive operating rights to a market. Allowing multiple NBA ownership stakes would be a departure from the league rules that prohibit stakes in multiple franchises. From Bloomberg:
…Interviews with about a third of the league’s 30 owners, some of whom were granted anonymity because the matter is private, showed widespread support for the idea, although none committed to participate and most said price would determine whether they did.
“Loved the idea,” Milwaukee Bucks co-owner Marc Lasry said via email. Asked whether his club would participate, the billionaire co-founder of Avenue Capital Group said it would “depend on the price.”
The structure and terms of the vehicle haven’t been finalized, according to the memo, which was reviewed by Bloomberg News. The league said it would discuss the proposal during its owners meeting later this month.