NBA Expansion Looms as League-Wide Debt Increases

The potential for two new NBA expansion teams appears stuck in the center of two market forces pushing in opposite directions. On one end, adding two new franchises at a hefty price tag has the potential to put money directly in the pockets of revenue-deprived ownership groups. On the flip side, the NBA’s hopes of selling the rights to an upstart team for $2.5 billion could be unrealistic after the recent sale of the Jazz ($1.66 billion) and the prospective market value for the for-sale Timberwolves.

On Tuesday, ESPN’s Brian Windhorst detailed how the potential for two expansion teams could help curb the league’s burgeoning debt.

Within the league office, sources said officials have floated the price tag of $2.5 billion each for two expansion teams in the near future. Unlike other major revenue streams such as TV and ticket money, expansion fees are not split with players. Such a haul could mean about $160 million per team, a windfall that could wipe out the massive debt load that’s piling up, and that alone has perked interest in the expansion path.

Even when considering the potential for teams in friendly markets like Seattle, Windhorst explained that the NBA’s current projections might be a bit high considering the offers that Glen Taylor of the Wolves has received thus far.

Considering there might be multiple offers from cities like Seattle or Las Vegas and that the league knows its business and its bidders, that could be a fair projection. But a potential Wolves sale of $1.5 billion or less would mean a correction in the NBA market after a decade of growth.

You can read the full story from Windhorst at ESPN.