The NBA’s Board of Governors is set to meet in New York Wednesday to formally give the league permission to begin the process of selecting potential candidate cities for expansion – with Seattle and Las Vegas the only cities that are expected to be approved at the meeting for formal vetting.
Formal vetting for buyers of teams is usually a months-long process involving detailed, forensic examinations of the financial capabilities of potential ownership groups to finance what is expected to be an NBA record-setting expansion fee of as much as $10 billion for each city’s new ownership, according to multiple league executives and industry experts contacted by The Athletic.
Expansion fee money is not part of the Basketball Related Income that NBA teams have to share with players as part of the Collective Bargaining Agreement, in a range of between 49 and 51 percent annually.
NBA Commissioner Adam Silver said during his news conference at All-Star Weekend in Los Angeles in February that owners would formally discuss expansion at the March Board of Governors meeting. While he said the league wouldn’t formally approve expansion bids at the March meeting, “we will likely come out of those meetings ready, prepared to take a next step in terms of potentially talking to interested parties.”
Silver, according to a source with knowledge of the discussions among ownership, has privately told NBA governors that he expects expansion fees to run between $7 billion and $10 billion. Two senior NBA team officials told The Athletic they believe the minimum expansion fee will likely be $8 billion per city.
“In my mind, there’s no question it’s going to be eight (billion), and nine (billion) to 10 (billion) is certainly doable,” one executive said.
The vetting process will determine who can carry such a financial load — and have enough to then successfully run an expansion team — in each city.
Seattle, which lost the SuperSonics to Oklahoma City in a 2008 relocation, has long been a frontrunner among many current team governors when and if the league decided to again expand, something last done in 2004, when the NBA approved a new franchise for the city of Charlotte to replace the one that relocated to New Orleans in 2002.
Las Vegas has emerged in recent years as a strong candidate, based both on its history as a year-round, revenue-producing city through tourism and legal gambling, and on its successful launch of multiple pro sports franchises in the last decade. The NFL’s Raiders relocated to Vegas in 2020 from Oakland; the WNBA’s Aces moved there from San Antonio in 2018, and the NHL awarded Vegas an expansion team, the Golden Knights, who began playing there in 2017.
In addition, Major League Baseball has approved the move of the Athletics from Oakland to Vegas, with the team expected to begin play there in 2028 after three interim seasons in Sacramento, while a new stadium in Vegas is completed.
While there is still at least some sentiment among some teams to relocate existing teams to Seattle and/or Vegas rather than giving both expansion teams, it’s more likely at this point that expansion will go forward — provided there are buyers in each city that can handle the massive cost of buying into the club.
“I don’t believe there are any red flags for those two cities at this point,” another high-ranking team official said this week, noting that an update is likely at the BOG’s next scheduled meeting, to take place in July during the NBA’s Summer League — which also has become a major event for the league since moving to Vegas in 2004.
At issue is giving two new teams a share of the lucrative new 11-year, $77 billion media rights deals the league reached last year with NBC/Peacock, Amazon and ESPN/ABC. Those revenues are divided equally among the current 30 teams. Adding two expansion teams would dilute each team’s share. Some governors had previously expressed reluctance to include two more teams that would get in on the action, but there is history of the NBA delaying new teams a full share of TV money.
When the ABA and NBA merged in 1976, the four ABA teams absorbed into the NBA – San Antonio, Indiana, Denver and New York (now Brooklyn) – did not receive any national TV money during their first three seasons in the NBA.
And the sale of the league’s two most storied franchises last year — the Lakers, at a $10 billion valuation to a group led by Mark Walter, and the Celtics, at a $6.1 billion valuation, to a group led by Bill Chisholm — gave owners an indication of how strong the lure of having an NBA franchise remains.
An executive from another team told The Athletic that their team’s preference is expansion rather than relocation, believing the two markets, especially Seattle, will bring increased revenues over the long haul that would negate any concern about the team getting 1/32 of future media rights revenues versus their current 1/30th share.
“This is definitely going forward,” the executive said.
Both cities are believed to have multiple groups that could potentially bid on a team.
The Seattle Kraken, the NHL expansion team that began play there in 2021, has numerous people among its ownership and management teams with long-standing NBA ties.
Samantha Holloway, the Kraken’s owner, is the daughter of the late David Bonderman, the team’s co-owner with his daughter until his death in 2024. Bonderman, the co-founder of TPG Capital, was a minority owner of the Celtics for several years before applying for and being approved as co-owner of the expansion Kraken.
The Kraken’s CEO, Tod Leiweke, is part of a family with multiple ties over the last few decades to NBA teams. Leiweke has served as president of the Rockets and presided over attempts in the 1990s to get a new arena built for the Warriors. He also served as acting president of the Blazers.
The Kraken’s owners announced the formation of One Roof Sports and Entertainment this week, which will serve as an umbrella group for the organization’s multiple sports properties, including Climate Pledge Arena, where the Kraken play. Climate Pledge was built at the former site of KeyArena, where the Sonics had played for most of their history in the city since entering the NBA as an expansion team in 1967.
KeyArena was renovated in 1995, but after the Sonics moved to Oklahoma City, the building was gutted and rebuilt for $1.2 billion, with only KeyArena’s iconic roof kept for Climate Pledge. But the building was designed so that it could also be easily retrofitted to house an NBA team as well.
One Roof Sports and Entertainment will oversee the Kraken, Climate Pledge,the Kraken’s practice facility and team headquarters in Seattle and its AHL minor league team and arena in Palm Desert, Calif.
Washington state governor Bob Ferguson posted on social media Tuesday about what he called a “productive” Zoom meeting this week with Silver.
Multiple potential bidders are expected for a potential Las Vegas franchise, including Golden Knights owner Bill Foley, who also owns a share of T-Mobile Arena, where the Knights play.
However, the Fenway Sports Group, created by Red Sox owner John Henry in 2011 and which currently owns both the Red Sox and the English Premier League’s Liverpool team, is not expected to be a bidder for an NBA team, after years of speculation that FSG would aggressively pursue an expansion team in Vegas.
The Lakers’ LeBron James, who owns an equity position in Fenway, said this week that he is no longer interested in pursuing an expansion team in Las Vegas after he retires.