Why Flood of NBA Team Sales Isn’t Slowing
Often it's less about love of team, more about love of returns.
The surge of NBA team sales in recent years continues unabated, with no signs of slowing down. Since 2010, there have been 25 change-of-control sales, including the recent deals involving the Timberwolves, Hornets, Bucks, Lakers, and more. In just the past two years alone, there have been 11 sales, collectively valued at $54.1 billion.
Economist Victor Matheson suggests the market's rapid price fluctuations contribute to the high turnover. He notes that when everyone has a clear understanding of a franchise's fair value, there's less fear of being overpayed or underpaid. With such high prices, sellers are more inclined to cash out.
The influx of wealthy investors into the NBA has been a major factor. Marc Lore, who sold the Timberwolves, wants to focus on his food distribution business Wonder. Paul Allen's death led to the Trail Blazers' sale, while Mark Walter's acquisition of the Lakers is driven by his need to raise cash amid federal investigations. Investors are primarily looking at sports franchises as valuable financial assets rather than lifelong fan interests.
These investors, often from tech and finance backgrounds, view NBA teams as diverse investment opportunities, separate from their primary holdings. The NBA is seen as particularly investor-friendly due to its high cap on private capital and a lucrative media-rights deal. As a result, sports ownership has shifted from passion investments to business investments.
Written by urgent.news from Front Office Sports's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
