The NBA has distinguished itself as “the most investor-friendly league in North American professional sports,” according to forensic accountant Jesse Silvertown, as the basketball world witnesses an unprecedented wave of franchise transactions. Nearly 25 percent of NBA franchises have changed hands since 2020, with three teams in the Boston Celtics, Los Angeles Lakers and Portland Trail Blazers announcing sales this year alone with a combined valuation of more than $20 billion.
Silvertown, director of forensic accounting firm Hesperus, tells Front Office Sports that the NBA’s investor-friendly climate stems from a higher cap on private capital, limited labor disputes and a lucrative long-term media rights deal. These factors have given the league an edge over the NFL and MLB in facilitating ownership transfers.
The league’s $77 billion media rights deal with ESPN, NBC and Amazon represents a 220% increase over the previous agreement. This financial windfall has driven franchise valuations to historic levels, creating optimal conditions for existing owners to exit the business.
“I suspect this is the start of a trend,” Tripp Crews of business valuation firm Mercer Capital told FOS. “The combination of rising valuations and private equity gaining access to this new class of assets should create more of these transactions in the future.”
The NBA formalized the private equity investment pathways in January 2021, allowing individual PE funds to hold up to 20% stakes in as many as five teams. Major companies like Sixth Street, Dyal HomeCourt Partners and Arctos Partners now have stakes in multiple franchises.
The most recent sales have been driven by aging owners, estate planning or scandals, Silvertown notes. This year’s sellers include owners in their mid-60s, while new buyers like Marc Lore, Alex Rodriguez and Tom Dundon are between 50 and 56 years old.
The league has had 23 change of control sales since 2010, a dramatic increase from the 1990s, when such transactions were rare and significantly cheaper.
“Economically, the choices are whether to become a real estate company around a new or revamped arena, bring in PE money — which many who haven’t sold are doing — or both,” Mark Cuban tells FOS.
#NBA #emerges #investorfriendly #league #record #team #sales