The Warriors move from Oakland to San Francisco may not great in distance, but changes everything for the team. When it comes to the game experience, there will probably be a downgrade. Brian Windhorst pointed out several times he thinks the Warriors lost some of the home advantages they had in Oracle Arena. So what’s the upside? Money.
The new arena is designed to maximize money – more VIP seats and boxes, enhanced fan experience, etc. All this will create the Warriors, one of the biggest cash cows in professional sports in North America. Before we throw out some numbers, a quick explanation – it is vital to differentiate team value and revenue. The Paces might be worth hundreds of millions, but that valuation is mostly made on the fact there are only 30 NBA teams and a lot of billionaires that would like to buy one. How much actual revenue and profit teams generate is another thing.
Forbes estimates that the Lakers and Knicks generate around $400 – $450 million in revenue each year, putting them at the top of the NBA list. This is where the big market teams have an advantage. Their local TV deal and fan purchase power is much higher. They estimated an average NBA team to generate around $300 million.
According to Tim Kawakami, with Chase Center (and expectations that they won’t have such a deep playoff run as in previous years) the estimate for Warriors revenue is around $700 million. This would launch the Warriors second in all North American professional sports, behind the Dallas Cowboys (estimated around $950 million).
We do have to take into account the Warriors built their arena without any public money or subsidies. They also purchased the land on which the arena is built on. This did require taking on some debt, but their finances are still looking quite good.
This provides them the ability not to run away from luxury tax the way OKC or Houston has done in previous years. They can also spend more on everything that’s not limited under the CBA: coaches, staff, facilities.
Will it be worth the noise and passion Oracle had? Probably yes.