How much to buy a basketball team

How Much Does it Cost to Buy an NBA Team? (Quick Answer)

No matter how you slice it, getting into the world of sports is expensive. It’s even more expensive if you want to buy a team. Purchasing a sports team is one of the costliest endeavors in the world, especially if you want to get into a major organization like the NBA.

I have played and watched basketball for nearly three decades. My own experience with the sport, as well as my deep knowledge of the NBA, allowed me to properly cover the questions outlined throughout the following article.

In this guide, I’ll go over the costs of buying an NBA team, as well as why such purchases are so expensive. I will look at a range of organizations, study trends over time, and figure why certain franchises are worth so much more than others.

Keep reading to learn more.

Contents

• What’s the Average Cost of Business?
• Can You Just Buy a Team?
• How Much Did The Franchises Cost?
• Other Questions You Might Have
  • What is the Most Valuable NBA Team?
  • Which Team is the Least Valuable?
  • What NBA Team Makes the Most Money?
• Final Words

What’s the Average Cost of Business?

While revenues definitely dipped throughout the league in 2020, NBA teams are incredibly profitable. Franchises have always been expensive, and they only get pricier with each passing year. In fact, the three most valuable teams are worth more than a combined $15 billion.

Of course, you wouldn’t have to pay that much to buy an NBA team. Those are the extreme cases. Rather, the average franchise costs roughly $2.4 billion. That’s still an astronomical amount of money, and it shows why only the richest of the rich can get into the owner game.

That average cost of more than $2 billion is also relatively new. The league only passed the mark in 2020, which shows the trend of the league becoming more profitable over time. 

In fact, in 2011, 22 of the teams in the NBA were not making a profit. Though they still generated revenue, the cost of operations simply outweighed any generation. However, that has now changed. All teams now make hand over first thanks to the recent rise in popularity.

Can You Just Buy a Team?

While money is undoubtedly one of the biggest barriers to purchasing an NBA team, even if you are a billionaire you simply cannot waltz in and get a franchise. There are many rules and regulations in place to stop that from happening.

As teams are worth so much, most current owners don’t want to part with theirs. In fact, while there were a lot of sales during the early 2010’s when the league wasn’t generating as many profits, only four teams have sold since 2013. 

That shows how much of a commodity franchise, especially successful ones like the Warriors, have become over time. Not only that, but the league doesn’t like having too many high-profile owners, which stops moguls or rich celebrities from getting in on the action.

To buy a team you don’t just need to be wealthy, you typically have to be unknown as well.

How Much Did The Franchises Cost?

So, now that you know the average cost of an NBA team, it’s also important to look back at how the market shifted over time. Even at its peak during the 80’s and 90’s, basketball simply didn’t have the viewership as other big leagues. That is why so many teams struggled to make money.

Today is a totally different story. For instance, the Golden State Warriors are the second most valuable team in the league, worth more than $5 billion. However, they sold for just $450 million in 2010. 

Similar stories are true of the two lowest value teams, the Grizzlies, and Pelicans. Despite just selling for $350 million and $338 million in 2012, both franchises are valued at over $1 billion today. That’s an incredible markup that shows no signs of ever slowing down.

The only constant when it comes to team value is that the New York Knicks have always been on top of the pack. They are currently the most valuable team in the league and sold for more than any other team in the 90’s, when they changed hands for $1.1 billion in 1997.

The second-largest sale around that time period was the Denver Nuggets, which sold for $450 million to an independent group in April of 2000. While that’s not a lot by today’s standards, such prices were not heard of during the turn of the century.

Other Questions You Might Have

Here are some related questions to the topic, I’ll answer them briefly below.

What is the Most Valuable NBA Team?

No team is currently worth more than the New York Knicks. Valued at $5.42 billion, they sit just ahead of the Lakers and Warriors as one of the only three teams to surpass the $3 billion mark.

Which Team is the Least Valuable?

While still incredibly valuable, the New Orleans Hornets are worth the least out of any NBA franchise. They come in at $1.35 billion, which sits just below the second to last place Memphis Grizzlies ($1.36 billion).

What NBA Team Makes the Most Money?

The two teams that generate the most revenue each and every year are the Golden State Warriors and the New York Knicks. They each pulled in $474 million and $421 million last season respectively, and always rank at the top.

Final Words

When it comes to buying an NBA team, there’s no shortcut. Even the cheapest ones on today’s market go for billions of dollars. The league is one of the largest companies on Earth, and the sheer amount of money that goes in and out of it each year simply reinforces that fact.

While the organization has hit its share of hardships and financial low points over the years, the current sports explosion across the world might have forever tipped the scales. The average is the highest it’s ever been, and there’s no telling if it will ever go back down.

How Much Does It Cost to Buy an NBA Team?

Owning your favorite NBA team is a dream for many people. For a select group of rich people, however, it is a reality. Everyone understands that becoming even a part-owner takes a lot of money, but the media rarely highlights the actual process when these purchases become official. That process is complicated by the increasing price for even the most downtrodden NBA teams.  

The road to NBA ownership begins with a rulebook

Buying a team isn’t as simple as showing up at Commissioner Adam Silver’s office with a giant bag full of cash. Interested parties must follow protocols. After agreeing on a price with the previous owner, the prospective buyer must be approved by the Silver and request a transfer of ownership.

If the owner is selling 10% or more of his interest in the team, they have to pay $50,000 to cover any expenses the request may incur for the league; attorney’s fees for example. Once all affected parties and the commissioner agree, 75% of the NBA’s Board of Governors will vote to approve the transfer before completing the deal and bringing a new owner into the fold. 

The NBA has also openly discussed expanding the league in the future. Different rules exist for this endeavor. To start a team, you must submit a $1 million application fee and write an application that the commissioner is under no obligation to review. The written application has to state where your franchise will be located and any other pertinent information.

If your application catches the commissioner’s eye, they will forward your request to the Board of Governors who must reach a 75% majority to add the new franchise. If you are let in, whatever is left of your application fee will be put toward your membership fees. The NBA will deduct expenses and return the rest to you if you are barred from moving forward.

How much do NBA teams cost?

The days of businessmen like Herbert Simon buying the Indiana Pacers for $10.5 million are long gone. The prices of NBA franchises are only going up. Three teams, the Utah Jazz, Houston Rockets, and Brooklyn Nets, have been sold in the past five years. All of them cost well over a billion dollars.

Trends are slightly harder to parse on a longer timeline; each owner sells for unique reasons. But it’s safe to say location has a big impact on negotiations. Nothing about the Clippers or Nets’ histories suggest that they would be objects of intense desire.

But Steve Ballmer and Joe Tsai paid $2 billion and $2.35 billion for their respective teams in part because they were buying into America’s biggest markets. Those prices are likely to increase even more in the near future. The NBA’s broadcasting contract expires in three years.

According to Forbes, the league will look for a deal worth $75 billion over a nine-year span. (Their current deal is “only” worth $24 billion.) Forbes also compiled a list of the 50 most valuable sports teams in 2021. Here are the most valuable NBA teams included in the rundown:

• 47. Dallas Mavericks ($2.45 billion)
• 43. Houston Rockets ($2.5 billion)
• 40. Brooklyn Nets ($2.65 billion)
• 39. Los Angeles Clippers ($2.75 billion)
• 25. Boston Celtics ($3.2 billion)
• 23. Chicago Bulls (3.3 billion)
• 7. Los Angeles Lakers ($4.6 billion)
• 6. Golden State Warriors ($4.7 billion)
• 3. New York Knicks ($5 billion)

If only James Dolan were as good at running a basketball team as he is at accruing money. 

Not every rich person makes sense as an owner

Giannis & the Milwaukee Bucks are still unbeaten to start this season. Here's a key to his success ? pic.twitter.com/PGmFvOhdbv

— NBA UK (@NBAUK) October 29, 2018

Ownership is the biggest advantage a franchise can have. Their decision-making filters down throughout every department in an organization. It’s the main reason why some teams can maintain a high level of play or rebuild quickly on the fly and some struggle to put out a competent product even with several top draft picks to bring in talent.

The most egregious offenders are the Cleveland Cavaliers, Minnesota Timberwolves, and New Orleans Pelicans. All three experience near-constant mediocrity even though they are near the top of the NBA draft each year. Every few years, these teams hire new general managers, coaches, and players — only for the results to stay the same. The only constants are the people at the top. 

On the flip side, the Toronto Raptors and Milwaukee Bucks were savvy enough to create championship teams in relatively unglamorous markets. The Miami Heat and Lakers are similarly intelligent with leveraging their statuses as free-agent destinations to attract and retain talent even when they don’t appear to have the cap space to do so.

The skillsets to become wealthy and run a good team are different disciplines. The people who can do both are hard to find. 

RELATED: How Much Did Mark Cuban Pay for the Dallas Mavericks?

Forbes named the most expensive NBA clubs ahead of the new season

October 18, 2021

• Business

• Andrey Zlobin Editorial Forbes

American Forbes has named the most expensive NBA clubs before the start of the new season, starting on October 19th. For the first time, three teams at once were valued at more than $5 billionOctober regular season of the National Basketball Association (NBA). For the first time, the assessment of three clubs in the ranking at once exceeded $ 5 billion, the newspaper notes.