RealGM

https://basketball.realgm.com/wiretap/281402/NBA-Expansion-Plans-Face-Owner-Resistance-Due-To-New-TV-Money-Distribution

Not a surprise to me. I've always been skeptical of expansion getting the green light, because it doesn't make economic sense for owners unless it's to bring in a huge untapped revenue stream like Mexico or Europe.

Seattle and Vegas do little for owners, unless that owner is about to sell and wants a cash injection before they do.

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

Owners and players split BRI 50/50 so it's not guaranteed that the players would be all in either.

It's a pretty simple math equation as far as box receipts and local TV contracts being more, or less than pro rata deduction from the national TV contract. It'll be 32 way split instead of 30. The question is how much new revenue the new teams can be expected to provide over the life of the national TV deals.

From the players perspective, it's a bit more complicated. The marginal guys should love it as there are 30 additional roster spots and it increases their chances of staying in the league. There's two more exception slots. There's more cap space generally speaking. In theory, there are two to four more max slots.

All of that said, the players didn't get their escrow money back this year because the league failed to hit its revenue projections. If the new teams lower the median revenue, then the cap won't go up as projected

Amount of games in a season is 41 multiples by number of teams. If you add 2 more teams then you get 82 more games a season. That's more money in a tv deal.

You could also make a case that tourists going to Vegas might catch a game and that's a way to hook in a new market to the NBA.


I think expansion will.happen.but the right cities need to be targeted.

zimpy27 wrote:Amount of games in a season is 41 multiples by number of teams. If you add 2 more teams then you get 82 more games a season. That's more money in a tv deal.

Why?

The thing is, NBA fans in Seattle and Vegas will tune in regardless of whether they have a local team.

zimpy27 wrote:Amount of games in a season is 41 multiples by number of teams. If you add 2 more teams then you get 82 more games a season. That's more money in a tv deal.

You could also make a case that tourists going to Vegas might catch a game and that's a way to hook in a new market to the NBA.


I think expansion will.happen.but the right cities need to be targeted.

There are more total games, but there are likely no more national TV games. So the national TV money may not increase but just be split more ways. That's especially an issue as the national TV money has been increasing but local money has had issues. So it's not a sure money maker for existing owners. I still expect it to happen but it's not the free money glitch some make it out to be.

It's also really awkward to go above 32 teams so this is kind of the last go without a complete remake of the league structure.

giberish wrote:

zimpy27 wrote:Amount of games in a season is 41 multiples by number of teams. If you add 2 more teams then you get 82 more games a season. That's more money in a tv deal.

You could also make a case that tourists going to Vegas might catch a game and that's a way to hook in a new market to the NBA.


I think expansion will.happen.but the right cities need to be targeted.

There are more total games, but there are likely no more national TV games. So the national TV money may not increase but just be split more ways. That's especially an issue as the national TV money has been increasing but local money has had issues. So it's not a sure money maker for existing owners. I still expect it to happen but it's not the free money glitch some make it out to be.

It's also really awkward to go above 32 teams so this is kind of the last go without a complete remake of the league structure.

Why awkward if over 32?

I read somewhere that the fee for becoming an owner will offset the losses to the pot.
IMO with expansion, they will be able to ask for more the next TV deal and it will take a few seasons just to get the teams up and running. The timeline is there..

nykballa2k4 wrote:I read somewhere that the fee for becoming an owner will offset the losses to the pot.
IMO with expansion, they will be able to ask for more the next TV deal and it will take a few seasons just to get the teams up and running. The timeline is there..

It can't offset it, because a 1 time cash payment will eventually be exceeded by loss of shared revenue. The only way it makes sense is if you're planning to sell before that happens.

jbk1234 wrote:Owners and players split BRI 50/50 so it's not guaranteed that the players would be all in either.

It's a pretty simple math equation as far as box receipts and local TV contracts being more, or less than pro rata deduction from the national TV contract. It'll be 32 way split instead of 30. The question is how much new revenue the new teams can be expected to provide over the life of the national TV deals.

From the players perspective, it's a bit more complicated. The marginal guys should love it as there are 30 additional roster spots and it increases their chances of staying in the league. There's two more exception slots. There's more cap space generally speaking. In theory, there are two to four more max slots.

All of that said, the players didn't get their escrow money back this year because the league failed to hit its revenue projections. If the new teams lower the median revenue, then the cap won't go up as projected

Expansion fees are not BRI. That money only gets split up among the existing owners.

And the players association doesn't really get a say in expansion teams. So while their thoughts might be noted or considered, depending on how good of a partner the leagues owners feel like being, they don't hold actual decision-making power.

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One_and_Done wrote:The thing is, NBA fans in Seattle and Vegas will tune in regardless of whether they have a local team.

That might be the case in Vegas because there are so many transplants. But less so in a city like Seattle. The longer the NBA goes without a team back in Seattle, the more folks will choose to completely tune it out. Heck, a large segment of fans already do.

If the owners vote it down, then it's their loss.

They won't see a dime from me.

One_and_Done wrote:

nykballa2k4 wrote:I read somewhere that the fee for becoming an owner will offset the losses to the pot.
IMO with expansion, they will be able to ask for more the next TV deal and it will take a few seasons just to get the teams up and running. The timeline is there..

It can't offset it, because a 1 time cash payment will eventually be exceeded by loss of shared revenue. The only way it makes sense is if you're planning to sell before that happens.

So the TV contract is for the next 10 years with ESPN. If expansion teams go live for the 2029 season (which IMO would be optimistic) thats 6 years of splitting that TV money. 3.33% of revenue vs 3.125% so about a 0.21% (rounding up) loss. That's about a $740K difference per year per team. Rounding up that's 4.5 million difference until the next TV deal where they can now ask for more due to more teams (also who knows what media consumption will look like down the road. we all might be doing those VR headsets to watch games in 2035). Also I did not take out the portion for the player (half)
Of note, I did use Forbes 2023 numbers so feel free to take a grain of salt here.

If there are 2 new teams and the price is 5 billion per, that's $166.67 million per expansion team, per owner. So basically over $300 million dollars go directly to current owners and by comparison, the profit loss from revenues will likely be substantially lower.

Even if you don't trust my numbers, the scale is really what matters here.

Per google AI

While the official total revenue for the completed 2025 NBA season is not yet available as of July 2025, projections indicate that the NBA's total revenue is expected to exceed US$12 billion for the 2025-2026 season, building on a record US$11.3 billion in 2024. A significant driver of this growth is a new 11-year media rights deal signed in July 2024, valued at $76 billion (approximately $6.9 billion annually), according to CNBC.

https://www.sportsvalue.com.br/en/nba-teams-surpassed-us-11-3-billion-in-revenue-in-2024-total-valuation-reached-us-132-8-billion/
$12B is 400M per team currently. Split evenly with the players it's 200M. for 32 teams it's 187.5M

so $75M per team using this second set of numbers again compare to over 100M per team from expansion costs. Big win for the current owners.

People are forgetting the franchise fee going to the teams would be $5-$6B for each expansion team.

This more than covers or vastly mitigates the dilution of TV revenue.

Owners are just greedy and want more $ probably.

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nykballa2k4 wrote:

One_and_Done wrote:

nykballa2k4 wrote:I read somewhere that the fee for becoming an owner will offset the losses to the pot.
IMO with expansion, they will be able to ask for more the next TV deal and it will take a few seasons just to get the teams up and running. The timeline is there..

It can't offset it, because a 1 time cash payment will eventually be exceeded by loss of shared revenue. The only way it makes sense is if you're planning to sell before that happens.

So the TV contract is for the next 10 years with ESPN. If expansion teams go live for the 2029 season (which IMO would be optimistic) thats 6 years of splitting that TV money. 3.33% of revenue vs 3.125% so about a 0.21% (rounding up) loss. That's about a $740K difference per year per team. Rounding up that's 4.5 million difference until the next TV deal where they can now ask for more due to more teams (also who knows what media consumption will look like down the road. we all might be doing those VR headsets to watch games in 2035). Also I did not take out the portion for the player (half)
Of note, I did use Forbes 2023 numbers so feel free to take a grain of salt here.

If there are 2 new teams and the price is 5 billion per, that's $166.67 million per expansion team, per owner. So basically over $300 million dollars go directly to current owners and by comparison, the profit loss from revenues will likely be substantially lower.

Even if you don't trust my numbers, the scale is really what matters here.

Per google AI

While the official total revenue for the completed 2025 NBA season is not yet available as of July 2025, projections indicate that the NBA's total revenue is expected to exceed US$12 billion for the 2025-2026 season, building on a record US$11.3 billion in 2024. A significant driver of this growth is a new 11-year media rights deal signed in July 2024, valued at $76 billion (approximately $6.9 billion annually), according to CNBC.

https://www.sportsvalue.com.br/en/nba-teams-surpassed-us-11-3-billion-in-revenue-in-2024-total-valuation-reached-us-132-8-billion/
$12B is 400M per team currently. Split evenly with the players it's 200M. for 32 teams it's 187.5M

so $75M per team using this second set of numbers again compare to over 100M per team from expansion costs. Big win for the current owners.

ESPN is but one of three networks with a national TV contract. The total amount is $76B over 11 years or a hair under $7B per year. It's the difference between that $7B split 30 ways ($233M), or 32 ways ($218M). So about $15M less a year over 6 years, or $75M less per existing team. If the expansion fee is $5B per team, the numbers still make sense per existing ownership group, but that's assuming the ownership groups plop down $5B liquid at the outset.

Edit: Also, if you spent $6B for the Celtics, or $10B for the Lakers the existing revenue figures are really important for future evaluations.

They could just move the Pelicans to Seattle.

Las Vegas is such a transient city. Nobody who actually lives there even wants the A's or Raiders. An NBA team playing on the Strip would mainly just be a tourist thing as the actual residents avoid the area. Having the All Star and/or NBA Cup in Vegas is probably good enough.

Cactus Jack wrote:

One_and_Done wrote:The thing is, NBA fans in Seattle and Vegas will tune in regardless of whether they have a local team.

That might be the case in Vegas because there are so many transplants. But less so in a city like Seattle. The longer the NBA goes without a team back in Seattle, the more folks will choose to completely tune it out. Heck, a large segment of fans already do.

If the owners vote it down, then it's their loss.

They won't see a dime from me.

Fans say that, but I'm sure the viewership in Seattle is still high. The Storm do quite well there relatively speaking.

mg wrote:They could just move the Pelicans to Seattle.

Las Vegas is such a transient city. Nobody who actually lives there even wants the A's or Raiders. An NBA team playing on the Strip would mainly just be a tourist thing as the actual residents avoid the area. Having the All Star and/or NBA Cup in Vegas is probably good enough.

There are at least three teams that could/should relocate.

If owners are so worried about revenue sharing dilution then why not just buy out other owners and retract the league to 24 or 26 teams?

Cactus Jack wrote:

Read on Twitter

Read on Twitter

lol.

Show us the money!

I continue to suggest that people who believe this is Seattle and Vegas guaranteed should consider pumping the brakes.

This is, and will be, 1000% about money. If London/Paris/Madrid could make more money and there are solid buyers and arena deal….

I’m just saying…stay prepared fam. This isn’t a Seattle/Vegas or nothing situation.