It’s incredible to think that for the majority of NBA team owners, having a professional basketball franchise under their leadership is nothing but a hobby. However, this is more about how rich these people are rather than how easy it is to own an NBA team. The truth is, buying an NBA team is one of the most expensive projects one can undertake. With this in mind, how much can you buy a basketball team for?
This article will answer that question and explore which teams are the cheapest and most expensive.
What Does it Take to Buy a Basketball Team?
It takes more than money to buy an NBA team. Well, sure, the sale of the last three teams over the past few years involved 10-figure deals, and Michael Jordan is said to be in the middle of selling the Charlotte Hornets for $3 billion.
But just because someone has the dough doesn’t mean he can go in there and own an NBA team. A rich person could not just go into the commissioner’s office with cash or cheques and state his intention to purchase a team. There are rules to follow, and the sale needs approval from the league and the other team owners. This also means anyone eyeing to own an NBA team should play the politics and PR game.
Some of the rules when buying an NBA team are as follows:
- A team owner (officially called a Governor) selling at least 10% of his shares must pay an additional $50,000 to cover possible fees.
- The prospective owner and the previous one must have agreed on a price.
- At least 75% of the Board of Governors must vote in favor of the sale.
And lastly, aside from a few exceptions, the NBA doesn’t like celebrity and high-profile owners who may create unnecessary media ripple. Therefore, an ideal owner is someone who has lots of money but at the same time, is content to work behind the scenes. It’s also worth noting that the NBA rules on expansion differ from a sale.
How Much Would It Cost to Buy an NBA Team?
Valuations of NBA franchises have reached astronomical numbers recently. The 10-figure amount of most teams did not cross that threshold since 2020. As of the latest Forbes franchise valuations, the cheapest NBA team to buy is worth $1.6 billion. On the other hand, the most expensive NBA franchise has a valuation of over $7 billion. The average cost of an NBA franchise is $2.86 billion.
Before this massive boom, you may have had a better chance of buying an NBA team in the early 2000s. For example, Mark Cuban decided he could take over the Mavericks reins from H. Ross Perot, Jr. and bought the team for “only” $285 million back in 2000. Lo and behold, over two decades later, the Dallas Mavericks are worth $3.3 billion.
Why Do NBA Teams Cost So Much?
NBA teams cost so much because they are in demand. The game has been soaring in popularity thanks to the league’s efforts, which directly translates to revenue. The NBA is probably the most forward-thinking league in the world, and it’s paying handsome dividends for teams. In other words, business in the NBA is booming, and if that’s the case, it reflects in the teams’ valuations.
Here’s an example of a short NBA revenue breakdown for the Golden State Warriors in 2021-22. Bear in mind that the whole league had over $10 billion of revenue during the season, with Dub Nation leading the pack:
- The Warriors generated the most revenue in that particular season, raking in $765 million even after their contributions for revenue sharing. Their total operating income in that season was $206 million.
- The team made $150 million in arena sponsorships and advertising and another $250 million for premium seats.
For a more detailed NBA revenue breakdown, here’s how NBA teams make money. After checking these factors out, you will have a better understanding of why an NBA franchise is worth ten figures.
- TV Deals. TV deals mean big money for NBA teams. For example, back in 2016-17, ESPN and TNT inked a contract with the NBA worth, wait for it, $24 billion over nine years, and this doesn’t include local television stations.
- Merchandise and Advertisement Deals. Have you ever noticed the small jersey patches on NBA jerseys? That tiny advertising space right there is worth millions and is a big part of the overall league revenue. For example, Wish pays the Los Angeles Lakers somewhere between $12 and $14 million.
- Tickets. If you’re a dyed-in-the-wool NBA fan, you probably have “attending an NBA game” on your bucket list. While ticket sales aren’t the top revenue stream of the league, it still rakes in a massive sum. Regular season ticket prices across the league are somewhere between $85 to $95, which is a total of almost $70 million in 41 games.
- Going International. The NBA partners with many international companies and strikes deals with them left and right. For example, Tencent owns the exclusive rights to be the NBA’s digital partner in China for $1.5 billion.
What is the Most Expensive NBA Franchise?
Forbes’ latest annual NBA teams’ valuations revealed that the most expensive NBA franchise is the Golden State Warriors at $7 billion. This is historic since for the last two decades of valuing NBA teams, Forbes always had the Los Angeles Lakers and New York Knicks holding on to the top spot.
The Warriors are the NBA’s most expensive team this season with over $353M in salary and luxury tax, and it’s only gonna get costlier.
But through a series of savvy moves and good fortune, the Warriors have no problem footing the bill.
Here’s how: pic.twitter.com/rEDFIE9DJR
— Kicks (@kicks) September 30, 2022
The Knicks slid to the second spot with a not-too-shabby $6.1 billion, while the Lakers are nipping at their heels at $5.9 billion. Rounding out the top 5 are the Chicago Bulls ($4.1 billion) and the Boston Celtics ($4 billion).
The Warriors’ resurgence to the top was primarily because of their championship success since 2015. In that span, Golden State won four championships, with the latest coming in 2022. They were also a part of two more Finals appearances in 2016 and 2019, allowing them to be in the center of the public eye for nearly a decade.
True enough, their continued excellence and a stable of popular players such as Steph Curry, Klay Thompson, and Kevin Durant (who has since left the team) skyrocketed their value in a short span. Imagine this: The Warriors were only worth $450 million when Joe Lacob bought the team in 2010. Thirteen years later, his investment grew over 15 times!
What is the Cheapest NBA Team to Buy?
The cheapest NBA team to buy, if they’re selling, is the New Orleans Pelicans. According to the latest Forbes valuation, the Pelicans are worth $1.6 billion. Right behind are the Memphis Grizzlies ($1.65 billion), Minnesota Timberwolves ($1.67 billion), Charlotte Hornets ($1.7 billion), and the Indiana Pacers ($1.8 billion). As you can see, the competition at the bottom is much closer than the battle at the top.
So, what contributes to the Pelicans being the league’s cellar-dwellers in terms of valuation? New Orleans is one of the league’s smallest markets, as downtown New Orleans only has a population of around 1.3 million. Compare that to Los Angeles or San Francisco, and you’ll see a massive difference.
But even with the odds stacked against the Pelicans, being valued at $1.6 billion isn’t really bad news in any way, shape, or form. In fact, the team experienced a growth of 121% from 2012 to 2017. Tom Benson bought the team for $338 million in 2012 and is now worth nearly five times that.
What NBA Team Makes the Most Money?
The Golden State Warriors is the team that makes the most money in the NBA, as they are also the most expensive NBA franchise. As previously shown, the Warriors made $765 million in the 2021-22 season, even though they own the league’s highest payroll.
How did the Warriors make the money wheel keep rolling with no signs of slowing down? The front office has done an excellent job developing players organically, allowing them to compete for an NBA title six times (winning four) from 2015 to 2022. There was also an element of luck with the development of a game-changer like Steph Curry. They drafted well to surround their superstar with an equally stellar supporting cast, such as Klay Thompson and Draymond Green, to name a few.
Lastly, the team did not cheap out when it was time to give the players their due in the form of contract extensions. For example, Draymond Green is already 33, but that did not stop Golden State from signing him to a four-year extension worth $100 million. Moves like this allowed the team to build continuity, a massive factor for continued success. And because NBA basketball is a business, success inevitably translates to revenue.
Wrapping Things Up: How Much Can You Buy a Basketball Team For?
Buying an NBA basketball team is a worthy but rather challenging endeavor. Anyone planning to do so puts themselves in the crosshairs of the league and its governors, which means they have to follow a particular set of rules and secure the go-signal from other owners. And that’s not to mention the ungodly amount of money involved. While most NBA teams in the past decade are valued at nine figures, franchises are now worth billions!
Considering these things, how much can you buy a basketball team for? According to Forbes’ latest annual valuations, the average cost of an NBA franchise is $2.86 billion. The cheapest NBA team is worth $1.6 billion, while the most expensive NBA franchise is valued at $7 billion. If you’re planning to buy one, you better get the green ready, among other things.
We hope you enjoyed this post! If you did, be sure to check out our other basketball FAQ articles here.