The NBA has reportedly considered expansion in the medium-term with a possible franchise fee of $2.5 billion.
Adam Silver said he is “not ready” to confirm the number of teams or the price point the league would seek if it were to add clubs. He said it “doesn’t feel like the right time” to focus resources or attention on future growth with the league still trying to navigate the pandemic. But Silver did say that “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.”
The Brooklyn Nets were recently purchased for $2.35 billion, which makes the $2.5 billion fee on the high side based on the analysis of Sportico.
“If no one is pitching Glen Taylor within a billion dollars of $2.5 billion for Minnesota, why would you think someone would spend $2.5 billion to go to Las Vegas? It’s not a better market,” said one sports banker.
Silver also said the NBA won’t expand in an effort to recover lost revenues.
“The main driver for expansion should be the ability to grow the pie,” he said, and “not necessarily to sell equity to bring in cash now as opposed to generating the money later.”