Money makes all businesses go round, and the NBA is no exception. They make billions of dollars each season, thanks in large part to the several clubs that comprise the league. However, as in any other organization, some teams are more popular and, therefore, more valuable than others. With that considered, what is the cheapest NBA team, and how much is the cheapest NBA team worth?
How are NBA Teams Valued: 5 Factors
Valuation is a common term in the financial industry, and this technique of determining a company’s value over a particular period is also used in NBA teams. The value of an NBA team is determined by many factors, primarily by these five elements.
1. Market Size
The terms “small market” and “big market” are commonly heard within the NBA sphere. It often refers to the media market based on TV households and not just on sheer population. It may also be found in the size of the state or the city. The two largest NBA markets are New York and Los Angeles, and because of their size, both cities accommodate two teams, a totally justified move based on their tourism and economic indices.
2. Team Success
No matter how big and loyal the market is, the team’s overall revenue tends to suffer if they always lose. Massive income is not always enough. More often than not, almost everything depends on the results on the court because no one wants to root for a losing team. When a team is not competitive, fewer fans attend games in the arena, watch fewer games on television, buy fewer team merch, and, as a result, fewer sponsors will become engaged with that franchise.
A great example of how success boosts value is the Golden State Warriors. The team was only the ninth-most valuable franchise in 2014, but since their championship runs, Golden State has shot up as the most valuable franchise in the NBA in 2022 and the second-most valuable in 2023.
The arenas are one of the teams’ most valuable assets, not just for their real estate worth but also for the gross income earned by all revenue generated by non-basketball and basketball-related activities. The New York Knicks fare well in this regard, as Madison Square Garden serves as the venue for several shows in one of the hottest cities in the United States. It also has a good capacity, with each patron paying an average of $140 every game, not to mention sponsorships and advertisements.
4. Team Brand
Although the team’s brand is also related to its success, sometimes it goes beyond that. It also happens when a franchise aligns itself with a player or even their past record of championships. For example, the Yao Ming era in Houston allowed the Rockets to be popular with the Chinese market. Similarly, the Lakers and Celtics storied history contributed to the brand’s popularity and international reach.
5. Potential Growth
When evaluating the value of NBA franchises, the potential for future growth is also taken into account. The ability of the club to be a free-agent destination, the development of the young core, if there’s any, and its capacity to increase its fan base and income sources all impact its value.
These are the reasons why the Lakers remain one of the most heavily valued franchises during the six consecutive seasons they missed the playoffs. They were building a solid young core by drafting Julius Randle, Brandon Ingram, and D’Angelo Russell. On top of that, the allure of Hollywood as a free-agent destination is always there. True enough they signed LeBron James in 2018 to regain their status as a contending team moving forward.
Top 5 Cheapest NBA Team Franchises
Now that you know how teams are priced, it’s time to count down the cheapest teams in the NBA. It’s not quite “cheap,” given they’re still worth billions, but they have a long way to go to catch up to the more established clubs.
1. New Orleans Pelicans ($1.63 billion)
Despite selecting Zion Williamson as the first overall choice in the 2019 NBA Draft, the Pelicans are the league’s lowest-valued club. How much is the cheapest NBA team worth? The Pelicans are worth $1.63 billion in 2023.
Brandon Ingram and CJ McCollum are not enough to push the Pelicans out of the 30th spot, but if Williamson just played enough games to make a postseason appearance, it could all change in a heartbeat. Their TV market size is the second-smallest in the league, and its metro population is second-smallest behind Utah.
2. Memphis Grizzlies ($1.67 billion)
The Grizzlies were the cheapest NBA franchise in 2022, but it moved up a spot in the rankings thanks to the team’s exciting young core. If Ja Morant, Jaren Jackson, Jr., and the rest of the crew could make a deep postseason run next year, they are primed for another valuation improvement.
3. Minnesota Timberwolves ($1.7 billion)
The team was sold to an ownership group led by Alex Rodriguez last year, but it failed to give traction to the Wolves’ value. However, they have Karl-Anthony Towns and Anthony Edwards as their young pieces moving forward. Minnesota is 13th in TV market size, but their lack of playoff success may hold their value back.
4. Oklahoma City Thunder ($1.75 billion)
Despite their string of success in the Kevin Durant-Russell Westbrook era, the Thunder is still one of the cheapest teams in the NBA. That’s because their market is the third-smallest in the NBA, behind Memphis and New Orleans.
5. Charlotte Hornets ($1.77 billion)
The Michael Jordan-owned franchise has been one of the league’s cellar dwellers. The Hornets have had no postseason appearances since 2016, and they only have Lamelo Ball as the only bright spot. If they could have everybody healthy, it might make a bit of difference and possibly affect their overall valuation positively.
Top 5 NBA Most Valuable Franchises
While most, if not all, of the least valuable franchises, are made up of small market teams, it’s not surprising that the big markets comprise the most valuable teams. These are:
1. Golden State Warriors
Golden State is now the most expensive NBA team, according to the latest valuations. The Warriors’ success in the past eight years and the popularity of Steph Curry are the biggest drivers of the Warriors’ value. Over that span, they have won four titles in six Finals appearances, improving their value from $450 million to $7.56 billion in just 12 years.
2. New York Knicks
The Knicks is the second most expensive NBA team, valued at $6.58 billion. They have not won a championship in five decades, but their outlook has been favorable with Jalen Brunson in tow. It also helps that their home arena, the Madison Square Garden, is probably the most famous building in the world.
3. Los Angeles Lakers
The Lakers have been atop valuation lists for so long, and they have maintained their spot in the top three as they are now worth $6.44 billion. They have the second-biggest TV market size and metro population behind the Knicks and the allure of Hollywood always makes the team a free-agent and superstar destination.
4. Chicago Bulls
The Bulls have not replicated the success of the 90s era, but they still have the backing of the entire Windy City. Chicago is third in market size and metro population behind the New York and Los Angeles teams and still has borderline superstar guys like Demar Derozan and Zach Lavine, along with fan-favorites Alex Caruso, Patrick Beverley, and Lonzo Ball.
5. Boston Celtics
Rounding out the top 5 is the Boston Celtics. The franchise is tied with the Lakers for most championships in the NBA and owners of the most dominant stretch in the history of professional sports. They won rings in 11 out of 13 seasons from 1957 to 1971, and that success contributed greatly to their popularity. The team has been very successful in recent years, taking part in six of the last seven Eastern Conference Finals series.
What Makes the Memphis Grizzlies the NBA’s Least Valued Team?
The Grizzlies were the least-valued team in 2022 but have improved on that ranking by one spot in 2023. Their value was not because of their on-court performances; after all, they secured the second seed in the 2022-23 NBA playoffs and had the reigning Defensive Player of the Year, Jaren Jackson, Jr., in their lineup along with Ja Morant.
Memphis has been the cheapest team in the NBA for so long because of its small TV market size and metropolitan area. They are only slightly bigger than New Orleans, but the Pelicans have a somewhat more significant TV reach. Because of this, the average ticket price of a Grizzlies game is one of the lowest in the NBA. According to Nerdwallet, the Median Resale Ticket Price in Memphis is $55, the fourth-lowest in the NBA behind the Cavaliers, Pacers, and Mavericks.
Wrapping Things Up: What is the Cheapest NBA Team?
The NBA is a big, billion-dollar business, but to be honest, not every team is created equal. A handful of franchises have established their brands, operate in a big market, and have significant TV reach. Therefore, they are valued at a much higher rate than others. The most expensive NBA team in the latest valuation is the New York Knicks at $6.12 billion.
Some, though, are just getting there, especially the small market teams. So, what is the cheapest NBA team right now? It’s the New Orleans Pelicans, a team valued at $1.51 billion. Last year, the Memphis Grizzlies held the distinction but have improved one spot in the latest estimates at $1.53 billion. The Minnesota Timberwolves, Charlotte Hornets, and the OKC Thunder round out the top five least-valued teams in the NBA.
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