NBA commissioner Adam Silver finally put an end date Tuesday to what has only been one of the biggest discussions about the NBA for at least a half-decade. In 2026, we will know if the league will move forward with expansion.
“We’re in the process of working with our teams and gauging the level of interest and having a better understanding of what the economics would be on the ground for those particular teams and what a pro forma would look like for them,” Silver said before the NBA Cup final in Las Vegas. “And then sometime in 2026, we’ll make a determination.”
That determination is what NBA teams and executives, sports financiers and interested bidders have been waiting on for a long time. The league has been open to expansion but also not definitive as to whether it would actually do it.
While expansion seems like a simple and binary choice, it’s way more complicated. A lot of dollars are at stake, and a lot of cities could get their hearts broken. Here are a few things to consider as the NBA goes down this path.
Is everyone willing to share?
Expansion is actually about sharing, not just adding. If the NBA adds two teams, that means that all of its national revenue would be split among 32 teams instead of 30. Every team and ownership group would have its share diluted as a percentage of the whole pie that it receives. Some owners are OK with just taking their cut of the 11-year $76 billion media rights deal that began this season and kicking their feet up. The hope would be that, by adding two more teams, the pie gets even bigger. Get your discounted cash flow model ready.
“It’s a much more difficult economic analysis,” Silver said. “In many ways, it requires predicting the future.”
Some money would likely come in, too. Each new team would also require a hefty expansion fee. Two years ago, the assumption was that an expansion team would cost somewhere around $4 billion to $5 billion. Then the Boston Celtics sold at a $6.1 billion valuation, and the Los Angeles Lakers sold at a $10 billion valuation. The Estate of Paul G. Allen has an agreement in place to sell the Portland Trail Blazers for $4.25 billion. It’s hard to peg where expectations are now, but an expansion fee is likely higher than it used to be.
That would be a lot of money coming into the league. Would that be enough to offset the annual dilution that teams would receive from more franchises? That’s a question for every owner to answer. The hard part is that not everyone has the same incentives and interests. Some owners just got to the NBA, some have been there a while, some might want to get out. Expansion is a question of what’s best for the NBA, but what’s best for the NBA is decided by 30 team governors who want to know what’s best for them.
Where would the NBA go?
Las Vegas and Seattle are two obvious answers. They have been for a while.
Seattle once had the SuperSonics before Clay Bennett moved the franchise to Oklahoma City. That took a team from a city that loved it and has mourned it ever since. Seattle is also the second-largest media market in the country without an NBA team. It has several major corporations — Amazon and Microsoft, for example — and the wealth to support ticket and suite sales.
Las Vegas is Las Vegas.
Mexico City has been a consideration, and Silver has spoken about the city in the past. Perhaps the NBA could put a second team in Canada, maybe in Montreal or Vancouver. Other options in the United States come with complications. Tampa is the largest media market without an NBA team, but there are already teams in Orlando and Miami. Nashville is the No. 25 media market in the country, but could Tennessee support two franchises? Is St. Louis or Austin an alluring option? The possibilities seem to get narrower the wider you go.
A look at Climate Pledge Arena in Seattle during a Jazz-Clippers preseason game in 2023. (Steph Chambers / Getty Images)
Is Las Vegas still a good option?
While Vegas has always seemed like an eventual NBA home, things seem to be a little more complicated now. If the NBA moved to Vegas a decade ago, it could have been a first mover among major pro sports teams. If it goes there at the end of this decade, the NBA would be the fifth pro sports league to put a team there after the MLB’s A’s arrive in 2028.
Then there are the general economic tailwinds in the city. Las Vegas is a destination that actually isn’t that large on its own. It’s the 40th-biggest media market and depends heavily on tourism, which has dwindled lately. As of October, it had an 11 percent decline in visitors compared to the previous year, according to The New York Times. The local health of any franchise will go beyond just ticket sales, though a smaller number of people vying for tickets among a greater number of pro sports teams likely wouldn’t be ideal. There are also sponsorships, local TV revenue and a slew of other factors to consider.
The NBA also has a strong presence in the city already. There is Las Vegas Summer League and, for now, the NBA Cup. Perhaps it would make more sense to go elsewhere.
What about relocation?
One interesting thing about what Silver said Tuesday is that he did not rule out relocation. Expansion or relocation might not be a binary choice, but they would possibly be competing for the same markets and cities to move into.
“We live in a big country, so I think if we were to relocate teams, I don’t think the right way to do it would be to rank the teams 1 to 30 in terms of market size or economic opportunity in those markets and then just take the two teams at the bottom and say let’s take them to markets where they could be more prosperous,” Silver said. “At least, again, I look at the potential to relocate teams as sort of independent as to whether it makes sense to expand to markets we’re not currently in.”
He also made the point that the NBA doesn’t get to decide whether to move a team; an owner does. But allowing a team to relocate could be a more palatable option in some ways than expansion. For instance, it would solve the dilution problem.
Some franchises have potential hiccups on the horizon. Arenas are always a friction point and a reason that owners threaten to move or do so.
The New Orleans Pelicans’ lease with the Smoothie King Center is up in the summer of 2029. Population in the metro area has fallen by 24 percent since 2020 based on data from the St. Louis Fed. The Memphis Grizzlies’ lease with the FedEx Forum also runs out after the 2028-29 season, and there has been no new deal yet. The Memphis metro area hasn’t lost population, but it has stayed relatively stagnant over the last decade.
They are the league’s two smallest media markets. New Orleans came in at No. 50 nationally this year, according to the Sports Business Journal, while Memphis falls just below it.
There are also costs that go along with relocation. According to the NBA’s own bylaws, it costs a team owner a minimum of $250,000 just to apply for relocation if the proposed new city is outside of its current territory. A relocation committee formed by the NBA would consider the request and weigh “the support of the member’s team in the existing location by fans, telecasters, broadcasters and sponsors. In evaluating this factor, the relocation committee shall consider the member’s past performance in the management and operation of its team in the existing location.”
The bylaws say that the committee would also weigh the ability of the team’s current city to support the team. It would need to consider: “existing and projected population, income levels and age distribution; existing and projected markets for radio, broadcast television, cable television and other forms of audio-visual transmission of Association games; existing and projected business environment; the size, quality and location of the Member’s existing arena and any other arena in the existing location, and the terms, if any, on which that other arena would be available to the Member; and the presence, history and popularity in the existing location of other professional sports teams and other forms of entertainment.”
The committee would, of course, have to think about the new city that ownership wants to move a team to. But it’s already likely doing that as it considers expansion. And we’ll know where the NBA stands with that next year.
