What is the economic incentive for expansion?

[TheSuzerain]

more audience more money

Do you really grow the audience that significantly more?

Well if the 4 teams all play 82 games, that's 164 additional games to sell. More teams = more "product".

[Gusto1903]

more audience more money

Do you really grow the audience that significantly more?

Well if the 4 teams all play 82 games, that's 164 additional games to sell. More teams = more "product".

Do you buy all the products thats offered at the grocery store?

[Hornet Mania]

I think the OP has a solid point on diminishing returns kicking in at some point.

However, I think in the case of Seattle and Vegas (far and away the favorites for the two expansion teams) there is an extremely strong chance they grow the pie significantly enough to justify their addition.

-Legions of Seattle basketball fans swore off the NBA after the Sonics left. That's one of the most die-hard sports areas in America, and the NBA is currently dead to a large chunk of their fans. It's less of a risk because it's a comeback story, there is some established history (and an NBA title) which is different than your average expansion franchise starting from scratch. Strong chance to profit from a Seattle team.

-Vegas has an even higher chance of success. The Raiders absolutely kill it there, as do the Golden Knights. The tourist element helps a lot. The NBA is going to make deals with local casinos and continue to work that (admittedly disgusting) angle to make a buck. Vegas will probably be in the upper quarter of teams in terms of profitability, the Raiders were 18th in franchise valuation according to Forbes as of 2018. They now sit at 6th and have almost tripled their valuation in just six years while mostly being an embarrassment on the field. Vegas is almost can't-miss.

[One_and_Done]

Do you really grow the audience that significantly more?

Well if the 4 teams all play 82 games, that's 164 additional games to sell. More teams = more "product".

Do you buy all the products thats offered at the grocery store?

Market saturation is definitely a reason that Seattle hasn't had a team for 16 years, and there is still no end in sight. I personally would like more teams, but not sure it's in the owner's interests.

[Lalouie]

Do you really grow the audience that significantly more?

Well if the 4 teams all play 82 games, that's 164 additional games to sell. More teams = more "product".

Do you buy all the products thats offered at the grocery store?

??? wait what?

okay so,,,, not everything is liked by everybody. there's people in Detroit who don't care about Orlando. there are many flavors

so here's a thing to consider. what has happened with 4 pac12teams joining the big10 is that NOW the b10 has coverage from coast to coast. there will be b10 games 12hrs a day

the economics will take care of itself.... YOU WANT COVERAGE.

[Slacktard]

If you told me the NBA is going to expand beyond say another two teams (32) and keep adding teams over the next 20 years. I'd actually rather just see them add 6 teams to Europe and make a Euro division

[Bobbymcgee]

Just move the two teams with lowest attendance to Seattle and Las Vegas. Kill two birds with one stone.

[Lalouie]

Just move the two teams with lowest attendance to Seattle and Las Vegas. Kill two birds with one stone.

nobody wants garbage dumped in their hometown

[One_and_Done]

Just move the two teams with lowest attendance to Seattle and Las Vegas. Kill two birds with one stone.

nobody wants garbage dumped in their hometown

Cities don't care how they get a team, as long as they get one.

[CIN-C-STAR]

I think you guys are underestimating the appeal of a $200 million check, even for uber-wealthy owners of the NBA.
Slightly more every year is nice, but $200 mill is still $200 mill. One in the hand is better than two in the bush and all that. Rich people are still greedy like everyone else too.

[Cactus Jack]

Well if the 4 teams all play 82 games, that's 164 additional games to sell. More teams = more "product".

Do you buy all the products thats offered at the grocery store?

Market saturation is definitely a reason that Seattle hasn't had a team for 16 years, and there is still no end in sight. I personally would like more teams, but not sure it's in the owner's interests.

We can sit here & debate all day whether it's beneficial for the owners in the long run. But the train has already left the station.

Expansion has been in the works for some time. Both Seattle & Las Vegas have been earmarked for it.

The biggest obstacle was the arena fwiw. However, that is no longer a roadblock.

Seattle built a new arena recently for both Hockey & Basketball. But bringing back an NBA team (via Expansion) has been a huge part of the equation.

Now that the league's media deals are reaching a conclusion here in the short term, expansion will come more into focus.

Read on Twitter

[One_and_Done]

Feels a long way from a reality.

[Cactus Jack]

Feels a long way from a reality.

No, quite the opposite.

[One_and_Done]

Feels a long way from a reality.

No, quite the opposite.

We have heard this every year. How many years away do you think? 3? 5? Longer?

[Cactus Jack]

Feels a long way from a reality.

No, quite the opposite.

We have heard this every year. How many years away do you think? 3? 5? Longer?

The expectation is that an announcement could actually come at some point later this year. But every indication is that it will happen sooner than later.

[Gusto1903]

You grow the number of total games by 41 for every new team.

Even if same audience, you grow the number of views because you have more games.

correct, and let me add,,,,

you grow for the sake of growth. that is, growth validates existence. tell me gusto1903, in what universe is growth NOT essential. there are other factors to consider as well. the nba is very loud about the expansion of it's world wide audience and social media, so now growth becomes a self fulfilling prophecy that needs to justify itself.

there is always going to be tribulations that come with growth - it doesn't matter if the nba expands now or 2yrs from now. those issues will still be there because they're part of the whole process. you will always pay the piper - it's called growing PAINS

i think parity is a particularly good time to expand. it's like when you beef up, rest is the time your muscles need to grow

Growth of course is important.
But let me tell you this. The way, how you grow, is the bigger quesetion. More teams, doesnt do anything. With that Strategy, you can only grow so far. As i was saying, the NBA has a different problem at hand, other than growing in that regards. They dont need more games. They need more interaction. People are already exhausted and skipping large parts of the regular season. Especially international fans, due to the Timezones. I for myself, live in Europe and have one humane Game per week, i could actually enjoy watching, and thats the early game on Sundays. And even thats not given every week and still somewhat late for me at 9pm. I miss the restof the week, if i dont torture myself to stay up late during workdays, or waking up early to catch the late night western conference window. I cant be arsed, because regular season isnt interesting at all, the good teams seperate from the bad teams pretty quickly and the restof the season is managing and coasting. Whats more teams gonna go for that, for example?

Lets look at how the NFL has grown over the last few years. Internationally, the NFL has gained a HUGE following, the hype is big especially in Europe. The revenue has eclipsed the NBA's by a landslide. And when was the last time they have expanded? Its over 20 years ago, and the reason the Houston Texans got into the league was to even out the total number of teams. There have been 4 expansion teams in the NFL from 1996 to 2002, with once again no new teams for 20 years prior.

How come they can grow? They have significantly less games. Only recently they have added one more game week to cash in on the growth. But the important difference here is, they are cashing in on the growth, by adding this game week. They arent trying to expand for the sake of hopefully growing in the future by 41 games who no one cares about.

And also please always keep in mind. I am talking about significant growth. Not minuscule growth like "well yeah 41 more games mean 41 times ticketsales, and stuff". Thats not significant. Significant is the audience. And you cant grow the audience, when the stuff you put out, isnt accessable like the NFL. Theres nothing more accessable from my timezone, than NFL Sundays with like 10 games, 20 teams @ 7pm of my time. I can follow my team pretty easily and comfortably without missing out for most of the season and even have the flexibility to still follow the nfl, when my team sucks and there are other interesting or exciting games on. With the NBA, for a casual fan, you are restricted to the garbage ass eastern conference games, that are on at the early sunday window. I have watched plenty of Charlotte, Orlando, New York, Detroit and Cavaliers games in my lifetime. And if those games suck, i would have to wait one more week to have a chance at watching an NBA game casually. And that game would be 2 totally different teams, that probably sucked aswell. I cant follow a team constantly, i cant switch between games, i am forced to watch teams like Detroit or the Nets. And yeah, that wont do it for me, if i were a casual.
The Casual experience in the NFL is much more engaging and exciting, even with only 272 regular season games, instead of 1230.


You grow more significantly by exploring new audiences, not by milking the same audience a bit more.

Nobody has commented on this aspect so far.

[KembaWalker]

Yeah it’s not the 50s anymore, butts in seats buying hot dogs and beers isn’t paying 70 million dollar salaries. A good social media campaign can win more fans than dropping a new team in a mid tier city where you’re mostly just flipping current fans from one team to another rather than actually expanding your customer base

[Ryoga Hibiki]

Look, I want 4 teams or more added. I love the idea of expansion. For the owners though it really makes no sense. Let's say 2 new teams are added, and each pay an expansion fee of 1.5 billion. OK, so the existing teams get 1/30th of that each, which amounts to $100 million each. But the new teams also take 6.25% of the TV revenue every year. Eventually the loss of revenue will exceed the expansion fee for owners. Even if the expansion fee were 3 billion it wouldn't make sense.

You could argue adding new teams grows the pie, but does it? The NBA is a global sport with fans everywhere, including places with no teams. I think the increase $ from new fans would be negligible unless they're bringing a whole new country in like Mexico. Plenty of fans in Seattle or Vegas still watch the NBA on pay to air, and the lost gate revenue doesn't go to other owners.

This is why expansion hasn't happened yet, and may not happen. It's a dubious economic prospect.

most likely it would be just some easy short term cash for the current owners.
unless, as you properly mentioned, they can pull it off with Mexico City and open up a new market they are not milking enough already.

[JonFromVA]

A successful expansion team generates revenue for the entire league and creates more jobs for the players which could be a CBA bargaining chip for the owners.

[Johnny Bball]

Do you really grow the audience that significantly more?

Well if the 4 teams all play 82 games, that's 164 additional games to sell. More teams = more "product".

Do you buy all the products thats offered at the grocery store?

Don't you ever have to go to two or more different stores to get what you need?