![]() METHODOLOGY: Revenue and operating income (earnings before interest, taxes, depreciation and amortization) are for the 2021-22 season and are net of revenue sharing and arena debt service. $1.6 bil NEW ORLEANS PELICANS 1-YEAR CHANGE: 5% | OPERATING INCOME: $94 mil OWNER: Gayle Benson Memphis Grizzlies' Ja Morant Justin Ford/Getty Images $7 bil GOLDEN STATE WARRIORS 1-YEAR CHANGE: 25% | OPERATING INCOME: $206 mil OWNERS: Joe Lacob, Peter Guber Given the tremendous value and reach of the NBA’s intellectual property and brand, NBA Equity will eventually be a much more valuable asset. Sources familiar with NBA Equity say its portfolio has about 20 investments that are closing in on an aggregate value of $1 billion. Among its investments: Sportradar, a publicly listed data company for gaming, media and sports leagues Nextiles, a participant in the NBA Launchpad program that is a smart fabrics company, capturing data with technology built into clothing Sorare, a premier NFT-based fantasy gaming company and New Era, a lifestyle and apparel brand. NBA Equity was created in order for the league to invest in existing or potential partners, from early-stage to growth-stage startups, that will help drive innovation and expand the NBA’s business. In addition, there’s the fledgling NBA Equity, a new initiative akin to 32 Equity, the NFL’s venture capital arm, which is worth over $100 million per team. ![]() Meanwhile, the soft cap limits player salaries to 44.74% of the league’s basketball-related income.įuture growth will come from the league’s next national media deal, which would begin with the 2025-26 season and should be worth at least double its current $2.66 billion-a-year agreement with ESPN and Turner Sports. The formula had low-revenue teams split nearly $500 million that was pooled from funds that came from a combination of high-revenue teams and luxury-tax payments last season. The league’s revenue-sharing formula and salary cap help ensure the financial health of the league. The Clippers are now worth $3.9 billion, almost doubling in value over the eight years of his ownership. The Clippers finished handily in the black last season, and Ballmer is building a new arena that has a $500 million naming-rights deal. So it is real red ink.” Ballmer is no longer complaining. ![]() We’re sitting there looking at red ink, and it’s real red ink. A couple of years after buying the team, the former Microsoft CEO quipped: “I’m a new owner, and I’ve heard this is the golden age of basketball economics. For example, since buying the Houston Rockets in 2017, Tilman Fertitta has pulled out at least $60 million a year, except for the 2020-21 season (when the pandemic shortened the regular season to 72 games and greatly reduced attendance at games), according to sources.Ĭontrast that with Steve Ballmer’s purchase of the Los Angeles Clippers for $2 billion in 2014. ![]() In other words, buying a team today means an owner can quickly begin to pocket cash and never have to put in another dime. Only one team, the Brooklyn Nets, lost money last year, and the average debt/enterprise value of the 30 teams is just 10%. The average multiple for the 30 teams is 8.6, versus 7 pre-Covid. The NBA is back on its pre-Covid growth trajectory, led by aggregate record sponsorship and advertising revenue at the team and league level, which totaled $1.35 billion last season, also an all-time high.Īnother reason values rose: Valuation multiples (enterprise value/revenue) are up thanks to the league’s growth, profitability and pristine balance sheets. After arena debt service, league-wide revenue and operating income for the 2021-22 season were $10 billion and $2.7 billion, respectively-both record highs. The average NBA team is now worth $2.86 billion, 15% more than a year ago, an impressive feat considering the stock market is down more than 15% over the same span.
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