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NBA expansion talk intensifies

NBA horizontal logoAn NBA expansion team could cost as much as $2.5 billion, as there’s plenty of chatter out there regarding the addition of two teams to the circuit.

Expansion is a time-honored way for professional sports leagues to raise capital, so it’s no surprise that MLB types are quietly discussing expansion as a way to offset operating losses this year and last. NBA Commissioner Adam Silver addressed the possibility of expansion when the 2020-2021 NBA season launched in December, saying that it was within the realm of future possibility but not a front-burner issue for the league.

Since Silver’s comments, there’s been plenty of chatter about expansion markets and the financial impacts of expansion. After a 2019-2020 season shutdown followed by bubble play in Orlando last fall and a 2020-2021 season that’s begun with only six teams hosting fans, it’s only natural owners would want to see the impact of expansion.

And that impact? Potentially $2.5 billion for each expansion team, with potentially $166.7 million passing through to each existing NBA team. (That’s a significant hike of the $1 billion price tag per team floated when expansion talk started.) Those are high numbers, to be sure–those kinds of prices for expansion teams would be the highest ever for professional sports teams in North America. It would go a long way toward addressing losses suffered by the league in the last 10 months, though there would be some long-term drawbacks (the media rights pie would be split 32 ways, not 30), but given the current state of things, a dollar in the hand this year is worth more than a dollar five years down the line.

And it doesn’t sound like a $2.5 billion price tag isn’t scaring off anyone–or at least not Oak View Group’s Tim Leiweke, who sounds pretty eager to add an NBA team to Climate Pledge Arena:

Other cities likely to be discussed in the expansion talks: Las Vegas, Kansas City, Anaheim and Louisville.

The NBA has not expanded since the 2004-2005 NBA season, when the Charlotte Bobcats joined the league.

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