LAS VEGAS — Was no news good news?
It depends on your perspective. But the fact NBA commissioner Adam Silver wasn’t prepared to lay out the league’s plan for expansion could make you somewhat frustrated.
But perhaps the waiting will be coming to an end in the coming months.
Speaking to the media Tuesday at the Thomas & Mack Center during the NBA Summer League following the Board of Governors meeting in Las Vegas, Silver said the new media rights deal, which is reported to be worth $74.6 billion (that’s not a typo) for 10 years, is not yet official. And until it becomes official, any talk about proposed expansion will have to wait.
“I’ve said for the last several years, let’s get the collective bargaining agreement and the media rights deal done first,” Silver said. “The media rights deal is still an ongoing process and there’s a fair amount that I can’t talk about.”
Silver knows there is great interest in Vegas and Seattle for NBA expansion. Seattle in particular has been trying to get back into the NBA since the SuperSonics were shanghaied to Oklahoma City by owner Clay Bennett in 2008.
We know that Vegas has proven to be supportive of the NBA. Despite being the nation’s 40th largest media market, Las Vegas has shown its loyalty to the NBA brand.
Whether it has been 20 years of the Summer League on UNLV’s campus or hosting the in-season tournament at T-Mobile Arena, where it will return in December, the city has displayed a loyalty to the brand.
Silver knows expansion will be a hot topic in the coming months and he and the owners have some hard decisions to make. Not just where to expand, but for how much it’ll cost to join the NBA as well as where would these teams play and how much of a cut would they ultimately get from the new media rights deal.
“It’s a little complicated,” Silver said about expansion. “We need to think things through with the owners.
"We’ll engage his fall and discuss if we want to expand and how we’ll do it.”
Battle for Vegas
Whoever decides to take a run at owning the next members of the NBA family better have some really, really deep pockets. We’re talking reportedly between $3 billion and $4 billion in expansion fees to become teams No. 31 and 32.
For a little perspective, the last time the NBA expanded, which was in 2004, the Charlotte Bobcats (now Hornets) paid $300 million to return to North Carolina after the original Hornets moved to New Orleans in 2002.That seems like a bargain compared to what lies ahead.
And if you want real bargains, consider that the Miami Heat, Orlando Magic, the Minnesota Timberwolves and the original Charlotte franchise paid $32.5 million each in 1988 to join. According to Forbes, The Heat were worth $3.9 billion in 2023, the Magic $2.95 million, the Pelicans (the original Hornets) $2.55 billion and the Timberwolves, who owner Glenn Taylor has had up for sale for a while now, are worth $2.5 billion.
So you can see why it’s going to be so pricey for anyone to join the NBA.
The smart money is on Seattle to be one of the choices, and rightly so. The SuperSonics should never have left.
If they want to play at Climate Pledge Arena, which sits on the site of the original Seattle Center Coliseum where the Sonics played for the majority of the time they called Seattle home from 1967 to 2008, it would be suitable. But the NBA might prefer the team have its own arena to ensure they have all the revenue streams.
Unless Seattle Kraken owner David Bonderman were to own the NBA team and therefore would have the team play at Climate Pledge, where the Kraken call home.
Arena quandry
Where does that leave Las Vegas?
It’s an interesting call. LeBron James and Shaquille O’Neal both have expressed interest in being the owners of a Las Vegas NBA expansion franchise. The Maloof family might want to get back into the NBA after a successful cashout from their investment in the NHL’s Vegas Golden Knights. And current Dallas Mavericks majority owner Miriam Adelson might want to own the Vegas team which would mean divesting her ownership of the Mavs.
But Vegas, a city of international renown, has international competition. Mexico City, which has a population of 22 million, has been mentioned by Silver for potential expansion. So has a return to Vancouver or putting a team in Montreal to give the Toronto Raptors a Canadian partner.
There’s also the arena situation. Tim Leiweke and the Oak View Group, which owns a parcel of land on Blue Diamond Road near Interstate 15 and has yet to break ground on its $12 billion arena-hotel-casino project, is considering developing an arena at the Rio Hotel and Casino on West Flamingo Road, a mile from the center of the Las Vegas Strip. It would be much easier for tourists and visitors to get there as well as for locals.
There’s also a group that is interested in building an NBA-quality arena on the old Wet ’N’ Wild site next to the Fontainebleu Hotel at the north end of the Strip. It is where local businessman and former UNLV basketball star Jackie Robinson’s ill-fated All-Net Arena project failed to get off the ground.
James Frasure Jr. heads up the LVXP group, which would construct an 18,500-20,000 seat arena along with a hotel-casino.
Silver said the NBA has not had discussions with either group on building an arena for the NBA to play in other than providing specifications and information on what the league would expect from a new facility.
“The availability of a first-class arena plays a huge role,” Silver said when evaluating a potential expansion city.
Support is key
I have no doubt Southern Nevada would support a Las Vegas NBA team. The track record is clear when it comes to basketball with one caveat — the team will need to have success on the court in order for the support to remain sustainable. Las Vegas will not support a loser for long.
Which is why I remain skeptical of the A’s move to Vegas being successful. No way does the city support a losing baseball team long-term.
Which arena gets built? Both entities have track records of success.
Meanwhile, T-Mobile could serve as a temporary home for a Las Vegas NBA franchise. It would not want to be a long-term secondary tenant because it would not accrue the revenue streams that currently belong to the Golden Knights.
Which is why building yet another arena here isn’t as crazy it sounds. The NBA would prefer its teams be the owners or at last primary tenants of the arenas they play in to maximize the revenue streams.
It’s why Steve Ballmer is moving the Clippers this fall into their new home, the $2 billion Intuit Dome. They were third rung on the ladder at Crypto.com Arena after the NHL’s Kings and the Lakers.
Let’s remember that ultimately, expansion is a business decision for the NBA. The league’s not doing Vegas and Seattle or any other city a favor in inviting them to join. If it’s not going to make money for the NBA, it’s not going to come here.
That may sound cruel. But that’s the reality.