Odd silence around NBA expansion to Las Vegas and Seattle
Odd silence around NBA expansion to Las Vegas and Seattle
“It’s fully baked,” says one source
BY HENRY ABBOTT
Marc Badain is on a cell phone in a car in midday Las Vegas. The sky is clear blue, but he’s in the eye of a storm anyway: He’s the guy in charge of a new $3 billion development centered around an NBA-ready arena on Las Vegas Boulevard. It will be the fifth arena in Las Vegas, a city with a population a little over 600,000.
There’s much speculation about whether or not the NBA is set to award Las Vegas and Seattle expansion teams. Many seem to think it’s a done deal. The question: Is the NBA coming to Vegas?
“I have been asked that,” says Badain, “and I answer that same answer every time. We’re not making that assumption. We’re not going to speculate. We’re not going to be presumptive. It’s up to the 30 owners and the commissioner. They have to decide which markets they decide are attractive.”
This is the most curious part of this story. Oak View is boldly speculating, with billions, on the arrival of the NBA in Las Vegas and Seattle. But they won’t speculate with words.
Why not?
Badain has spent a career in sports. He left a job as president of the Raiders to work for Oak View Group, which appears to be well positioned in Seattle and Las Vegas to host the NBA’s next expansion teams. Oak View insists, however, that their development can work with or without the NBA. Founded by Tim Leiweke and Irving Azoff, Oak View builds and runs stadiums all over the world, and has no trouble filling them with top music acts:
Leiweke used to run AEG, and led the development of major stadiums like the Pepsi Center, L.A. Live, and many others.
Azoff is unbelievably connected in the music industry, going back to the Eagles and Quincy Jones. A few years ago Azoff was honored with a pre-Grammy gala which was attended by John Legend, Christina Aguilera, Fetty Wap, Dave Grohl, Lana Del Rey, and seemingly every famous person in America. When Khloe Kardashian married Lamar Odom, the ceremony was the hottest ticket in Hollywood, and it happened at Azoff’s house.
When Leiweke announced the 25-acre development on CNBC in March, he hadn’t even been asked a question before he rolled into how very certain he was that the NBA had not committed [italics from TrueHoop].
We’re prepared to spend about a billion dollars on building the new arena. It will be for music, it’ll be for sports, it will be for cultural activities, and should the NBA decide to come–and by the way there is no certainty or no guarantees that the NBA is ever coming to Vegas–but should they come, we certainly will be NBA ready, and make sure that we hit all of their standards.
The Seattle Times’ Geoff Baker wrote a good story about NBA expansion which included similar denials from the NBA and Oak View:
“You, more than anyone, know we never get ahead of the commissioners,” Leiweke said in a phone interview Wednesday when asked about the Las Vegas arena being for NBA use. “The decision on if and when the NBA will expand is up to (commissioner) Adam (Silver) and the 30 team owners. But if those owners decide they want to expand, we believe Seattle will be in good shape with the arena there. And Las Vegas will be in very good shape as well with this project.”
No worries about competitive balance or gambling
Once upon a time, any talk of expansion led to panic about competitive balance. Are there enough good players? It’s hard to find anyone who’s worried about that anymore.
“We are moving toward fifty percent international players,” says NBA agent Todd Ramasar. “There is a surplus of talent to support 34 new jobs.” (34, you ask? That’s NBA roster spots per team, plus two two-way contracts for players splitting time with the G-League.)
The Athletic’s David Aldridge quoted an unnamed NBA governor saying “I don’t see that being as big a problem as it once was. Developing, evaluating, coaching, mental and physical wellness and the professionalism of NBA players has evolved so much since the last expansion.”
It has also long been seen as taboo that the NBA would have a team in the nation’s gambling capital. But those questions, too, seem to be from another time. “How will it work in Las Vegas?” asks Ramasar. “Ask the NFL and the NHL. Ask the WNBA where the Aces are doing well. It’s become a place to raise a family, not just a place to gamble.”
Badain says, “this is a market that has seen a bunch of growth. A lot of people are very bullish on Las Vegas. Formula One, the Raiders, the Knights, the Aces, minor league teams are here. There’s a growing population with wealth and affluence moving here from other parts of the country. And the visitors, we have 100,000 people coming here every day on average as tourists, mostly to spend money.”
Silver has said Vegas can be considered for expansion.
Will the players want a cut?
The NBA is currently in talks on a new media deal to follow the current ESPN/Turner agreements which pay the lion’s share of the NBA’s bills. Word is that the league will hit the streaming wars with impeccable timing and get such a giant raise that the value of every team will double. In that world, sources say the NBA’s lowest-value team, the Pelicans, would be worth more than $2 billion, while the Warriors could skyrocket to a $10 billion valuation.
After that, several sources suggest, the league will command absolutely unprecedented amounts for expansion teams—between four and five billion each. A year ago, Adam Silver called reports of a $2.5 billion expansion fee “very low.” Sources say the NBA has prospective investors ready.
This could be the NBA’s biggest influx of cash ever. For perspective, the crown jewel of the NBA’s current business is about $3 billion in annual U.S. national broadcast revenues. An $8-10 billion influx would be a giant deal. For example, $9 billion divided 30 ways could mean $300 million for every team.
Insiders say that behind the scenes this has become one of the league’s core plans to placate billionaires still chafing from losses of recent years. The pandemic hurt every aspect of the business, especially in-arena revenues—at the same time the NBA lost hundreds of millions in Chinese broadcast revenues (after the touchy Communist Chinese government cut off the league in response to Daryl Morey’s routine use of free speech).
Expansion revenue could put those woes in the rearview mirror.
“It’s fully baked,” says one source.
If there’s gamesmanship about the NBA’s expansion plans, one reason could be the NBA’s collective bargaining agreement, which expires at the end of the 2023-2024 season, and is due for a renegotiation.
Under the current CBA, “proceeds from the grant of expansion teams,” are “expressly excluded from the definition of BRI.” BRI is the basketball-related income that the billionaires share with the players.
In other words, all this expansion money would be coming to the billionaires, with none for the players—unless the players take a hard stand between now and expansion.
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