Forbes released their 2015 NBA team valuations today. Following the $24 billion TV-rights deal announcement, and a “bull market” the average cost of an NBA franchise has reached a new record of over $1.1 billion. That’s up 74 percent from last year, and it’s the biggest one-year gain since Forbes start valuing teams in the four major professional North American sports in 1998.
Last year the Knicks ($1.4 billion), Lakers ($1.35 billion) and Bulls ($1 billion) became the first franchise’s to enter the billionaire’s club. Forbes’ 2014 valuation was up 25 percent from 2013 and the average NBA franchise was worth $634 million.
This year it’s up 74 percent and the average value of all 30 NBA teams is north of a billion dollars with 11 NBA teams valued above that threshold. The Lakers have overtaken the Knicks for the top spot, despite both teams going through losing 2013-14 seasons when neither made the playoffs.
The reasons for the substantial growth in the value of NBA teams stems from the TV-rights package, but that’s not all:
The NBA has bucked the overall decline in ratings across TV with viewership for regular season games up 26% since the 2002-03 season.
With live sports proving one of the few DVR-proof plays (people watch the commercials), local rights deals are surging, too. The Atlanta Hawks, Miami Heat and Sacramento Kings all signed new local TV deals in the last six months with rights fees roughly triple their prior agreements.
The collective bargaining agreement signed between players and owners in 2011 has nearly eliminated money-losing teams, barring wild spending sprees on players (see Brooklyn Nets). Under the CBA, the players’ share of basketball related income was reduced from 57% to 50% (it is only around 47% of total revenue when you include all arena revenue streams). Revenue sharing to prop up the low revenue teams more than tripled from $55 million under the old CBA to $232 million last year. The result: the Nets were the only NBA team to lose money last season on an operating basis if you include all arena revenue.
The average NBA team had an operating profit of $23.1 million, a tick behind last year’s record tally of $23.7 million. Total leaguewide revenue hit $4.8 billion, or $160 million per team, up 5% from last season.
The NBA continues to spark interest as the U.S. sports league with the most global potential. There were 101 foreign players from 37 countries on opening day rosters this season and while none of them are from Asia, there are 300 million people regularly playing basketball in China, according to the Chinese Basketball Association. The NBA’s international revenues were $350 million last year and have grown at 18% annually. NBA Commissioner Adam Silver wants to launch four franchises in Europe.
Perhaps the only hiccup in this new golden age of TV profits and soaring salary caps is the upcoming collective bargaining battle, which insiders told Forbes is basically a “fait accompli” at this point.
Players were already spewing when the new TV-rights money was made public, most notably Kobe Bryant‘s take, but LeBron James also complained about the discrepancy between what the owners said during the 2011 CBA negotiations when the Kings were sold above their Forbes valuation in 2013:
The new director of the NBPA, Michele Roberts, has been outspoken in her critique of the current CBA, and the 30 NBA owners led by commissioner Adam Silver are in for a long collective bargaining battle in 2016 (when either side can opt out of the current 10-year deal).
Here’s the complete list of the Forbes valuations:
Lakers: $2.6 billion
Knicks: $2.5 billion
Bulls: $2 billion
Celtics: $1.7 billion
Clippers: $1.6 billion
Nets: $1.5 billion
Warriors: $1.3 billion
Rockets: $1.25 billion
Heat: $1.175 billion
Mavericks: $1.15 billion
Spurs: $1 billion
Trail Blazers: $940 million
Thunder: $930 million
Raptors: $920 million
Cavaliers: $915 million
Suns: $910 million
Wizards: $900 million
Magic: $875 million
Nuggets: $855 million
Jazz: $850 million
Pacers: $830 million
Hawks: $825 million
Pistons: $810 million
Kings: $800 million
Grizzlies: $750 million
Hornets: $725 million
76ers: $700 million
Pelicans: $650 million
Timberwolves: $625 million
Bucks: $600 million
What do you think?
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