League officials floated the price tag for expansion

League officials floated the price tag for expansion

It could be the silver lining of COVID-19 for NBA fans. After avoiding the topic completely for years, the NBA League Office “dusted off” expansion plans. Bring back the Sonics!!

Money makes the world go round, and the NBA is no different. Teams are losing money, and while no-one is crying for billionaire owners whose team valuations went through the roof, they didn’t become billionaires by being content with where they are. It’s the ultimate “disease of more.” The most likely scenario is to add two teams. Seattle is a lock, and Las Vegas is the most likely second location. So much for the “where.” But the question potential investors always have on their minds is, “how much?” 

“Within the league office, sources said officials have floated the price tag of $2.5 billion each for two expansion teams in the near future.”

Brian Windhorst, ESPN

The last reference point we have is the sale of the Utah Jazz for $1.66 billion. It’s important to note the price included the arena the Jazz play in, but it’s still an impressive sum for a small market team. Seattle, Las Vegas, or some other location would probably be a larger market with more revenue potential. In addition to that, the league obviously knows there’s a lot of interest out there – demand is significantly greater than supply.

The important thing to note is that expansion fees are not a part of the Basketball Related Income – the pie owners have to share with the players. The $5 billion that would come in from two expansion teams would be divided amongst the owners. That’s around $160 million per team – more than enough to cover the hit teams took during COVID. 

Another interesting wrinkle to keep your eye on. Both teams would probably be in the West, which would mean one team from the Western Conference would move over to the East. The Pelicans, Grizzlies, and Timberwolves will fight tooth and nail to move over and make room for the expansion teams. 

Another chance for the NBA to make sure Zion is in the Playoffs as often as possible.