NBA commissioner Adam Silver was dropping not-so-subtle hints last year that the league would consider expanding by two teams and change it after a nine-year, $24 billion deal was negotiated a decade ago. This new deal, at nearly three times the former annual rate, gives the league’s 30 team owners a more complete picture of the revenue pie that will need to be split with the two additional expansion franchises.
Seattle and Las Vegas are considered leading cities in establishing clubs. The timeline for the expansion process remains unclear.
“There’s been some discussion about possibly going back to Seattle,” Silver said in an interview with NBC Sports Boston last month. “Obviously, Las Vegas is very interested in a team. One day in Mexico City.
“But obviously, there are a number of other American cities and Canadian cities that have contacted us to tell us they would be interested in it.”
Seattle and Las Vegas remain favorites because of the involvement of Silver and longtime NBA associate Tim Leiweke, co-founder of Los Angeles-based Oak View Group (OVG). It was Leiweke’s company that converted KeyArena into what is now Climate Pledge Arena for $1.15 billion, which included $50 million in special NBA enhancements that the league was made aware of.
Leiweke – brother of Kraken CEO Todd Leiweke – is leading a plan for a $10 billion, 66-acre all-private development three miles south of the Las Vegas Strip that would include hotels, gaming and a 20,000-seat NBA arena.
That project has not yet gotten off the ground and last month faced competition from a group headed by real estate developer LVXP planning an NBA-ready arena on the Vegas Strip. LeBron James and Shaquille O’Neal have expressed interest in owning a Las Vegas team.
Now that NBA owners know they are guaranteed $6.9 billion annually from national TV alone, they can set an expansion fee. This fee, expected to exceed $4 billion, would generate immediate cash for each of the 30 teams that would not be subject to revenue sharing with players. This will enable owners to offset the pandemic-related shortfall and future loss of broadcast revenue from the new TV package as they will need to share it among 32 teams instead of 30.
They also have to decide the timing – whether to add two franchises at the same time or to split them apart. Although the league prefers to expand in pairs to balance conferences and scheduling, some potential cities, such as Seattle, have ready-made arenas while Vegas and others do not.
Seattle made a bid for a squad that would revive the Sonics name and traditional logo and colors, led by the family of Kraken majority owner David Bonderman – primarily through his daughter, Kraken co-owner Samantha Holloway. From.
“I think the Kraken is a new brand and extremely important to this city and our family, and we need to grow this brand and make everyone here a hockey fan,” Holloway said in an interview in December 2022. Said on getting equal ownership. Control of the Kraken with Bonderman. “As a separate effort, we believe this city needs a basketball team – or even an NBA team, since it already has a great WNBA team. And our family is ready to work to make it a reality because we have created the field to be able to do that.
Two months earlier, Holloway had announced to season-ticket holders that the NHL team was creating a separate company “to serve as a parent brand that will encapsulate the Kraken brand and prepare for other big opportunities.” A team spokesperson explained that the company’s main focus for now will be to oversee projects like the $150 million Memorial Stadium overhaul undertaken by Kraken and Tim Leiweke’s OVG.
The spokesperson said: “When the (NBA) commissioner (Adam Silver) is ready, this ownership group is ready, too, but they will be careful not to rush through the process.”
The timing of the umbrella company and the resolution of NBA TV talks hardly seems coincidental. Holloway promised to provide more details about the company it will be creating in mid-summer, the expected timeframe for full TV deals to be announced and the league’s move toward expansion.
Another step toward formulating a Seattle bid required Holloway’s father to sell his minority stake in the Boston Celtics – as NBA bylaws prohibit owning two teams simultaneously. It also appears imminent after the Celtics announced last month that Boston Basketball Partners LLC — part of team ownership group Bonderman — has put the franchise up for sale.
Managing partner Vic Grousbach clarified this week that 51% will be sold soon and an additional 49% by 2028.
Bonderman wouldn’t be the only one making a bid for any Seattle expansion team, especially as the price tag is expected to exceed $4 billion. Forbes recently estimated the average value of an NBA team at $3.85 billion, but the magazine’s valuation often lags the value received by teams.
A decade ago, expansion teams were expected to make $1 billion or maybe $2 billion at most. The previous NBA TV deal and its lucrative revenues, along with more sponsorship opportunities generated by new state-of-the-art arenas, pushed sales prices to record levels – the Phoenix Suns made $4 billion in 2022 and the Milwaukee Bucks made $4 billion last year . $3.5 billion.
Bonderman, chairman and founding partner of TPG private-equity group, has a net worth estimated by Forbes at $6.2 billion. So unless he’s willing to spend two-thirds of it on a basketball team, he’ll need the help of partners.
In addition to finances, there will also be public relations benefits to the inclusion of local ownership such as Ackerley Sports Group – from the family that led more successful versions of previous Sonics teams and counts brothers Ted and Chris Ackerley as current Kraken local owners. . The brothers formed the sports company last year and this year made an initial investment in the UK’s Leeds United Soccer Club, becoming owners and partners.
Her father, Barry Ackerley, owned the Sonics for 18 years, while he and his wife Ginger founded the WNBA’s Storm.
Another Kraken owner expected to be part of the Bonderman-led ownership group would be Amazon CEO Andy Jassy, whose net worth is reported to be north of $500 million.
Hollywood producer Jerry Bruckheimer, who led the Kraken expansion bid with Bonderman and remains the team owner, also expressed interest in owning any Sonics team during an interview in February 2018.
“I love sports, period,” said Bruckheimer, who reportedly became a billionaire in 2019. “And I will be involved in whatever I can in this area. Because we’re so excited about the possibilities of what the design, the fan experience could be for both games.
Additionally, there are some former Sonic stars whom Kraken owners will almost certainly take to court as minority investors, Gary Payton being the most prominent among them.
Former Storm star Sue Bird is another possibility who has already invested in a WNBA team as a minority partner. Payton and Bird have been featured prominently in scoreboard messages to Kraken Games fans. Former Seahawks star Marshawn Lynch is already a Kraken minority investor, having made frequent public appearances on behalf of the team.