LAS VEGAS — The NBA is starting to take a detailed look at potential expansion.
Commissioner Adam Silver said Tuesday night that the league office has been directed by its board of governors to undertake “in-depth analysis of all the issues around expansion, both economic and non-economic.”
“A lot of analysis still needs to be done, and nothing’s been predetermined one way or another, and without any specific timeline,” Silver said.
Silver added that a combination of two existing committees will analyze the issue: the league’s advisory finance committee, which will have primary jurisdiction over the issue, and the league’s audit and strategy committee, which will study the economics.
The league currently has 30 franchises and last expanded when it added the Charlotte Bobcats, now called the Hornets, to begin play with the 2004-05 season.
Much has changed since then, particularly franchise values.
Private equity firm magnate Bill Chisholm recently agreed to purchase the Boston Celtics in a deal that is ultimately expected to be approved for more than $6.1 billion. Financier Mark Walter, who owns the Los Angeles Dodgers, recently agreed to purchase the Los Angeles Lakers from the Buss family in a deal that valued the team at $10 billion and could eventually value it at $12 billion.
Had the league expanded five years ago, Silver said, the league “would have underpriced the market” for new expansion franchises, noting no model existed that would have predicted the Celtics and Lakers’ sale prices.
“That’s why it gets fairly complex, because the most difficult issue in terms of thinking about expansion is not looking at the current economics,” Silver said. “It’s trying to project out in terms of what the future should be.”
Also complicating matters is the uncertainty of local media rights — something Silver acknowledged on Tuesday night as he answered questions from reporters following the league’s summer board of governors meeting here. Some regional sports networks have struggled in recent years, with a few facing bankruptcy, and with existing teams seeing a decrease in revenue.
Silver added, “I think we would be malpracticing if we didn’t figure out how local and regional television is going to work before expanding. The notion that we’d hand over a team to a city we’re not currently operating in and say ‘You’re going to have to figure out how you’re going to distribute your games to your local fans’ doesn’t make any sense.”
Seattle and Las Vegas are generally perceived — by the general public, anyway — as strong expansion candidates if the league expands.
“I think there is a significant step now,” Silver said when asked about the league potentially expanding. “We’re now engaging in this in-depth analysis, something we weren’t prepared to do before. But beyond that … it’s really day one of that analysis. So, in terms of price, potential timing, (it’s) too early to say. And again, I think that assumes the outcome of this analysis. It’s truly a complicated issue.”
(Photo: Matthew Stockman / Getty Images)
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