LAS VEGAS — The NBA is nearly ready to discuss expansion, with Commissioner Adam Silver saying Tuesday that the NBA will begin “expansion considerations” after the league's media rights deal is finalized.
The league's Board of Governors approved the new 11-year, $76 billion contract on Tuesday, but it's not done yet because Warner Bros. Discovery CEO David Zaslav claims the parent company of TNT Sports has the right to pay the same amount for one of the NBA packages. It has not yet decided whether to pay the same amount.
Adam Silver said the NBA will move to “consider expansion” once the media rights deal is finalized.
— Mike Vorkunov (@MikeVorkunov) July 17, 2024
“The media deal has not yet been completed, but once it is, we will consider expansion,” Silver said. “It may be a bit more complicated than proposed. Take our most recent deal for example. Once completed, a new partner will be brought on board, diluting the strength of our current team.”
“When you expand, sometimes it looks like you're printing money, but it's really no different than selling stock in a company,” Silver continued. “So I think you have to do a lot of modeling with the league office, work with the existing owners, and really think about the long-term outlook. Again, not just the economics, but the potential for talent dilution.”
The next media rights deal will be split among the league's 30 teams, similar to the league's other revenue streams, but it remains to be seen how willing each owner is to have their annual share diluted by the additional teams. For owners, the potential expansion highlights both the revenue from the league's media rights deal and the value of the expansion fee, so owners can run their own discounted cash flow models to determine whether the trade-off is worth it.
Going deeper
What we know about NBA expansion and cities looking to join
Silver said Tuesday that the league will “engage in a serious decision-making process this fall” regarding the factors he mentioned regarding expansion.
“Should we expand?” he said. “And if we do, how many teams should we expand to and in what markets?”
Silver has repeatedly said the league will move toward expansion once the updated collective bargaining agreement and new media rights deal are in place. Athletic Last week, it was reported that the NBA and network executives had reached an 11-season deal worth $76 billion to retain ABC/ESPN as the broadcaster of the NBA Finals, while bringing in NBC and Amazon Prime Video as new partners.
“We have approved this stage of the media proposal,” Silver said, but cautioned that the process is not over and there are some details he cannot discuss.
Silver wouldn't say Tuesday whether the five-day grace period for Warner Bros. Discovery (WBD) to bid for the same amount had begun, and he's not sure what the next step will be.
“I don't have that feeling,” Silver said. “A lot of it is out of my control. We'll see what happens.”
As for expansion, informal but steady preparations had already begun among potential buyers for the next round of franchises to hit the market. Athletic It will report in December 2023.
At the time, Seattle and Las Vegas were seen as the front-runners to host the NBA's new franchise, with both cities considered strong markets. Silver had previously spoken highly of Mexico City, saying the league would “seriously consider” the city. He had previously said Montreal and Vancouver were each interested in hosting an NBA team.
Must Read
(Photo: David Dow/NBAE via Getty Images)
