LAS VEGAS (AP) — The NBA may finally be one step closer on the long road to expansion.
Commissioner Adam Silver said Tuesday that the league has been tasked by team owners to study the issue more formally as part of in-depth analysis, which would be the first official move .
There’s no timetable about how long the process will take, nor have any decisions been made on what the expansion fee will be, when the new teams will start play — or even if expansion is going to actually happen.
The league isn’t creating a new committee to study expansion; the duties, for now, will fall primarily to a pair of existing groups, with the advisory finance committee leading and the audit and strategy committee also involved.
“A lot of analysis still needs to be done and nothing has been predetermined,” Silver said.
The decision to take a harder look at expansion wasn’t totally unexpected, since the notion of adding clubs has been a talking point for several years. Cities like Las Vegas and Seattle — long perceived to be the front-runners should the NBA decide to expand past its current 30-team footprint — will surely continue to push to be the eventual picks. And Silver himself has said previously that he expects expansion will happen at some point.
“I think there is a significant step now in that we are now engaging in this in-depth analysis, something we weren’t prepared to do before,” Silver said. “But beyond that, it’s really Day 1 of that in-depth analysis. And so, in terms of price, potential timing, it’s too early to say. … It is truly a complicated issue.”
The next board of governors meeting will likely take place sometime in September.
Expansion has long been a difficult issue, since it’ll mean, among other things, that the current owners will have decided to sell equity in a league that is on a financial roll right now.
“For every team you add, you’re diluting the economics of the current league,” Silver said.
A new series of media rights deals worth $76 billion kicks in for this coming season, franchise values across the league have soared and the two most title-laden franchises in the NBA, and clubs that have combined for about half of the titles handed out in league history, are in the process of being sold with a combined valuation of at least $16.1 billion.
The Celtics are being sold to private equity mogul Bill Chisholm with a valuation of at least $6.1 billion, which was a record until the Buss family agreed to sell the Lakers to businessman Mark Walter — also the owner of the Los Angeles Dodgers — with a valuation of $10 billion.
“There’s no question that those purchase prices have an impact on any economic analysis of teams, so it doesn’t necessarily complicate it more, but it certainly is an indication of value,” Silver said. “And one other factor we have to look at: we’re trying to think what is the value of expansion, what does it mean to dilute the existing equity, and how additive is this potentially to the league by adding an additional team.”
The league has added seven franchises since 1988, but none since 2004. There has been several instances of rebranding and relocating since — most notably, the Seattle SuperSonics moving to Oklahoma City in 2008 and becoming the Thunder — but the league has been at 30 teams for the past two decades.
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