Owners won't support expansion?

[pipfan]

I think the $12 billion the owners split from the 2 new teams would go a LONG way to offsetting the TV revenue split being a bit worse.
Plus, you’ll add some fans, for sure
I don’t know all the numbers, but it seems like it’s a better league with 32 teams

[HartfordWhalers]

I think I'm on year 6 or so of people claiming to know things for a fact about expansion. And oddly, so far all the facts haven't happened.

[gswhoops]

I think the $12 billion the owners split from the 2 new teams would go a LONG way to offsetting the TV revenue split being a bit worse.
Plus, you’ll add some fans, for sure
I don’t know all the numbers, but it seems like it’s a better league with 32 teams

I mean end of the day it's going to be a math equation - what number for the new franchise fee offsets dividing the TV revenue split 32 ways instead of 30, and can the new ownership groups pay it.

Current estimate puts the expansion fee at somewhere between $4 and $5 billion, which translates to a payout of roughly $300 million per team.

[Djh7475]

I haven’t been around or paid attention during past expansions, so I’m curious what the expansion rules would be. Would the salary cap (and tax levels) go down due to BRI having to split between 2 more teams? How many players would each team get to protect? I’ve seen 8 mentioned on Google - but that seems like too many to give 2 expansion teams a decent roster.

What timeline does an expansion typically occur over? If the cap/tax brackets end up going down, it seems like you would need to time it over 3-4 years so teams that built for the current landscape don’t get killed (like the Celtics/Suns getting hurt by the new CBA after the fact). What happens to the draft order in the 1st year of the expansion (do they get the #1 and #2 picks?)? Do the expansion teams get extra picks in that draft?

Do the new teams get a cut of the luxury tax payments right off the bat? Do the new teams have a different salary cap the first few years? Without having the bird rights to any players until at least a few years, it seems much more difficult for the expansion teams to spend heavily on their roster (even if they want to) since they wouldn’t be able to use bird rights to go over the salary cap.

[Texas Chuck]

I think the $12 billion the owners split from the 2 new teams would go a LONG way to offsetting the TV revenue split being a bit worse.
Plus, you’ll add some fans, for sure
I don’t know all the numbers, but it seems like it’s a better league with 32 teams

I mean end of the day it's going to be a math equation - what number for the new franchise fee offsets dividing the TV revenue split 32 ways instead of 30, and can the new ownership groups pay it.

Current estimate puts the expansion fee at somewhere between $4 and $5 billion, which translates to a payout of roughly $300 million per team.

Its the perpetuity that's the issue. There isn't a realistic franchise fee number that offsets that. So they have to be meaningfully growing the pie. I'm not sure they can. I mean we have the ABA guys still getting NBA money. Gotta think these guys think about what a terrible deal their predecessors made there when debating this.

I get it for Sonics fans, they want a team back. I support cities getting and having teams. Realistically though, Cuban laid this all out for us nearly a decade ago and nothing's changed about the math. It doesn't make sense to split the pie unless you believe the new teams will increase the pie more than the share they take out. Seattle and Vegas are very unlikely to do that and those are the cities constantly named.

I think Mexico City might be the only city that really makes any financial sense and lest I bring down the wrath of Whalers let me be clear I have no idea if even they would be. But at least there you are potentially opening up an entirely new revenue stream with the travel being more viable than Europe.

[SNPA]

No, that's precisely what it is. Seattle & Vegas are the whales. There are groups from both cities that have the means to do it. The owners want to extract as much money as possible from both.

Some owners surely don't want to split the pie. But make no mistake about it. Seattle & Vegas are the only two in play here.

Sorry. You can’t know that.

Seattle and Vegas might have strong ownership groups and arenas in place, but that doesn’t actually matter. What matters is what 30 groups of multi-billionaires and their co-owners think. And they will only think about money, and not just expansion price but over the long term. If Madrid makes more…

It’s not meant to be rough but the reality is the billionaires making the decisions won’t care about the angst of Seattle fans from a move from close to two decades ago. It’s a none factor. I’m a Kings fan…fandom is irrelevant. History of the franchise is irrelevant (Kings are the oldest operating basketball franchise in the world). $. That’s it.

Actually, I do.

The league is not going to put a team in St. Louis or any other city for that matter. European cities are not in play for expansion atm.

The Kings past situation is totally irrelevant here.

But you're right about one thing, money is driving this thing. Some owners don't want to further dilute the revenue sharing (30 to 32). That is why this has been a slow drawn-out process. Trying to convince the majority of owners to get on board.

The league wants teams in both Seattle & Vegas. But it will only happen if they can get enough support to greenlight expansion.

Silver is saying day one and the BoG wants a study done. You say it’s all preset. Ya’ll at opposite ends.

There won’t be a single vote for the plan that makes the second most money. This is a very simple game.

[Cactus Jack]

Sorry. You can’t know that.

Seattle and Vegas might have strong ownership groups and arenas in place, but that doesn’t actually matter. What matters is what 30 groups of multi-billionaires and their co-owners think. And they will only think about money, and not just expansion price but over the long term. If Madrid makes more…

It’s not meant to be rough but the reality is the billionaires making the decisions won’t care about the angst of Seattle fans from a move from close to two decades ago. It’s a none factor. I’m a Kings fan…fandom is irrelevant. History of the franchise is irrelevant (Kings are the oldest operating basketball franchise in the world). $. That’s it.

Actually, I do.

The league is not going to put a team in St. Louis or any other city for that matter. European cities are not in play for expansion atm.

The Kings past situation is totally irrelevant here.

But you're right about one thing, money is driving this thing. Some owners don't want to further dilute the revenue sharing (30 to 32). That is why this has been a slow drawn-out process. Trying to convince the majority of owners to get on board.

The league wants teams in both Seattle & Vegas. But it will only happen if they can get enough support to greenlight expansion.

Silver is saying day one and the BoG wants a study done. You say it’s all preset. Ya’ll at opposite ends.

There won’t be a single vote for the plan that makes the second most money. This is a very simple game.

I don't want to keep repeating myself. But the cities are indeed set in stone.

The issue is that there a group of owners against it. That's why momentum for it has been stalled.

"There are people who are, I wouldn't say rethinking, but asking why we need to move as quickly as we expected," a senior team official told The Athletic. The official added that expansion will likely occur eventually, just not immediately as there is not currently overwhelming momentum.

"They want to see how the new TV money plays out next year," another senior executive said.

[basketballwacko2]

I think it will make sense in a few years. Certainly not now with economic uncertainty.

Part of the issue to me is the most likely cities to expand in are in the west, Seattle and Vegas. If you do that you have to move 2 current West Conf teams to the east and it still not balanced. Let's say move Minn and Memphis to the East you then have 17 teams in the East and 15 in the West.

I'd think if the price to get a team is $4-5 billion, 2 teams is say $10 billion. The NBA gets $2 billion and the current 30 teams split $8 billion equally. The negative is there are now 2 more teams to split the TV money with and more teams to compete for players in free agency.

[One_and_Done]

I think the $12 billion the owners split from the 2 new teams would go a LONG way to offsetting the TV revenue split being a bit worse.
Plus, you’ll add some fans, for sure
I don’t know all the numbers, but it seems like it’s a better league with 32 teams

I mean end of the day it's going to be a math equation - what number for the new franchise fee offsets dividing the TV revenue split 32 ways instead of 30, and can the new ownership groups pay it.

Current estimate puts the expansion fee at somewhere between $4 and $5 billion, which translates to a payout of roughly $300 million per team.

Its the perpetuity that's the issue. There isn't a realistic franchise fee number that offsets that. So they have to be meaningfully growing the pie. I'm not sure they can. I mean we have the ABA guys still getting NBA money. Gotta think these guys think about what a terrible deal their predecessors made there when debating this.

I get it for Sonics fans, they want a team back. I support cities getting and having teams. Realistically though, Cuban laid this all out for us nearly a decade ago and nothing's changed about the math. It doesn't make sense to split the pie unless you believe the new teams will increase the pie more than the share they take out. Seattle and Vegas are very unlikely to do that and those are the cities constantly named.

I think Mexico City might be the only city that really makes any financial sense and lest I bring down the wrath of Whalers let me be clear I have no idea if even they would be. But at least there you are potentially opening up an entirely new revenue stream with the travel being more viable than Europe.

This is on point, except for the allusion to the former owners of the St Louis Spirit. Those guys got bought out of their future entitlements.

The other thing to remember is you're not just giving up 2/32 on the TV deals in perpetuity, you are also giving up that % on all other shared revenue (e.g. merchandise is all shared equally, luxury tax redistribution is also shared via a complex formula among non-tax teams). The TV $ are also likely to go up in the future even without expansion, so what you give up now could dwarf that short term cash injection faster than you think.

[One_and_Done]

I think it will make sense in a few years. Certainly not now with economic uncertainty.

Part of the issue to me is the most likely cities to expand in are in the west, Seattle and Vegas. If you do that you have to move 2 current West Conf teams to the east and it still not balanced. Let's say move Minn and Memphis to the East you then have 17 teams in the East and 15 in the West.

I'd think if the price to get a team is $4-5 billion, 2 teams is say $10 billion. The NBA gets $2 billion and the current 30 teams split $8 billion equally. The negative is there are now 2 more teams to split the TV money with and more teams to compete for players in free agency.

Only 1 needs to move East.

[jbk1234]

Short term it reduces what each individual team gets, more slices from the pie but expands the reach of the league and creates more revenue long term.

I suspect there's a real rich team/poor team divide as well. If you're a cash-poor, smaller market team, a $5B buy-in sounds great. $5B becomes the new placeholder for team values and you get a big pile of money.

If you just bought a team for more than $5B, the undiluted revenue is more important. That revenue was the basis of your evaluation.

You shouldn't do the long-term bet unless your TV partners are making it with you which they can't do for 7 years. I do think that the NBA benefits greatly from being a winter sport and that expansion with the additional viewers in additional markets could lead to more growth, but all these ownership groups don't view it as a lifelong or even legacy commitment.

[wegotthabeet]

move Memphis

Yes, finally.

to Nashville.

Oh. Wasn't expecting that, but umm okay, sure I guess.

Or better yet, correct a past wrong and ship them to...

Here we go, now we're talking.

Louisville

What the actual **** man hahaha.

[the_process]

move Memphis

Yes, finally.

to Nashville.

Oh. Wasn't expecting that, but umm okay, sure I guess.

Or better yet, correct a past wrong and ship them to...

Here we go, now we're talking.

Louisville

What the actual **** man hahaha.

Way before Vancouver, the Bulls screwed the Kentucky Colonels from joining the NBA in the merger because they wanted Artis Gilmore.

[wegotthabeet]

move Memphis

Yes, finally.

to Nashville.

Oh. Wasn't expecting that, but umm okay, sure I guess.

Or better yet, correct a past wrong and ship them to...

Here we go, now we're talking.

Louisville

What the actual **** man hahaha.

Way before Vancouver, the Bulls screwed the Kentucky Colonels from joining the NBA in the merger because they wanted Artis Gilmore.

Yeah, but they were never in the NBA so what did they lose really?

[JT3000]

The league should expirement with sharing franchises more, Portland/Seattle, LA/Vegas, Orlando/Tampa, etc...

You forgot Dallas/Austin. Don't half-ass your own idea, go all in.

Or we could just go ahead and permanently move the Mavs to Vegas, since the owners probably want to anyway.

[SNPA]

Actually, I do.

The league is not going to put a team in St. Louis or any other city for that matter. European cities are not in play for expansion atm.

The Kings past situation is totally irrelevant here.

But you're right about one thing, money is driving this thing. Some owners don't want to further dilute the revenue sharing (30 to 32). That is why this has been a slow drawn-out process. Trying to convince the majority of owners to get on board.

The league wants teams in both Seattle & Vegas. But it will only happen if they can get enough support to greenlight expansion.

Silver is saying day one and the BoG wants a study done. You say it’s all preset. Ya’ll at opposite ends.

There won’t be a single vote for the plan that makes the second most money. This is a very simple game.

I don't want to keep repeating myself. But the cities are indeed set in stone.

The issue is that there a group of owners against it. That's why momentum for it has been stalled.

"There are people who are, I wouldn't say rethinking, but asking why we need to move as quickly as we expected," a senior team official told The Athletic. The official added that expansion will likely occur eventually, just not immediately as there is not currently overwhelming momentum.

"They want to see how the new TV money plays out next year," another senior executive said.

Sorry, but this is having it both ways. The cities are set in stone but some owners aren’t onboard? That literally means nothing is set. It’s the definition of not set in stone in these circumstances.

Beware some of this verbiage man. The Kings were moving to Seattle, “first and goal on the one yard line.” It was reported as the equivalent of set in stone…but it wasn’t.

[KembaWalker]

The league should expirement with sharing franchises more, Portland/Seattle, LA/Vegas, Orlando/Tampa, etc...

oh man don't even put that idea into the universe, the owners would absolutely love being handed more taxpayer funded arenas, facilities and incentives. could definitely see the Spurs trying this with Austin

[Mavrelous]

The league should expirement with sharing franchises more, Portland/Seattle, LA/Vegas, Orlando/Tampa, etc...

You forgot Dallas/Austin. Don't half-ass your own idea, go all in.

Or we could just go ahead and permanently move the Mavs to Vegas, since the owners probably want to anyway.

If any team plays in Austin, it's the Spurs...

[oldncreaky]

I think the $12 billion the owners split from the 2 new teams would go a LONG way to offsetting the TV revenue split being a bit worse.
Plus, you’ll add some fans, for sure
I don’t know all the numbers, but it seems like it’s a better league with 32 teams

I mean end of the day it's going to be a math equation - what number for the new franchise fee offsets dividing the TV revenue split 32 ways instead of 30, and can the new ownership groups pay it.

Current estimate puts the expansion fee at somewhere between $4 and $5 billion, which translates to a payout of roughly $300 million per team.

Its the perpetuity that's the issue. There isn't a realistic franchise fee number that offsets that. So they have to be meaningfully growing the pie. I'm not sure they can. I mean we have the ABA guys still getting NBA money. Gotta think these guys think about what a terrible deal their predecessors made there when debating this.

I get it for Sonics fans, they want a team back. I support cities getting and having teams. Realistically though, Cuban laid this all out for us nearly a decade ago and nothing's changed about the math. It doesn't make sense to split the pie unless you believe the new teams will increase the pie more than the share they take out. Seattle and Vegas are very unlikely to do that and those are the cities constantly named.

I think Mexico City might be the only city that really makes any financial sense and lest I bring down the wrath of Whalers let me be clear I have no idea if even they would be. But at least there you are potentially opening up an entirely new revenue stream with the travel being more viable than Europe.

Good points.

I agree Mexico could expand the financial pie. I also wonder a little about Montreal: broadcasting in French, with a potential worldwide Francophone audience over $300M+ might have some long-term potential. But since I haven't heard of and don't think there are any deep-pocketed Quebec potential owners in the running, that probably leaves only Mexico City as the lone potential NBA franchise that makes sense financially.

[winforlose]

I think the $12 billion the owners split from the 2 new teams would go a LONG way to offsetting the TV revenue split being a bit worse.
Plus, you’ll add some fans, for sure
I don’t know all the numbers, but it seems like it’s a better league with 32 teams

I mean end of the day it's going to be a math equation - what number for the new franchise fee offsets dividing the TV revenue split 32 ways instead of 30, and can the new ownership groups pay it.

Current estimate puts the expansion fee at somewhere between $4 and $5 billion, which translates to a payout of roughly $300 million per team.

I wonder how profit sharing will factor into this. The top half of earners give to the bottom half. So if you add two poor franchises that need years to set up their talent to the point that they can approach “peak profit,” that is years of some owners giving more and some owners getting less. Not entirely sure how the projections look, but I suspect it could also be a factor.