SEATTLE — The record-setting sale of the Los Angeles Lakers may not delay the NBA’s expansion process, but it has injected a new variable into Seattle’s long-running effort to bring back the SuperSonics: price.
Josh Kushner and former Disney CEO Bob Iger agreed this week to buy the Lakers at a $12.5 billion valuation, the highest price ever attached to the sale of a professional sports franchise. The two had been pursuing a potential NBA expansion franchise in Las Vegas before abruptly pivoting to Los Angeles.
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The deal came just months after NBA owners formally voted to explore expansion in Seattle and Las Vegas. On March 25, the league announced it had hired PJT Partners to evaluate the two markets, prospective ownership groups and arenas. It represented the strongest formal step toward a return of the Sonics since the franchise left Seattle in 2008.
“The news was a stunner,” said longtime sports business reporter Kurt Badenhausen of Sportico. “Thirty years of doing this, covering the business of sports, and this one is top five in terms of coming out of nowhere.”
Badenhausen said the 25% jump from the Lakers’ roughly $10 billion valuation last year underscores how rapidly the price of elite sports franchises continues to rise. Sportico’s NBA valuations last year showed the average team climbing about 20% year over year, he said.
But Badenhausen said he does not believe the Lakers deal changes the league’s expansion timetable.
“I don’t think it changes much in terms of the timeline,” he said, noting that the NBA is simultaneously pursuing domestic expansion and a separate NBA Europe project. “Adam Silver’s been very clear. This is something that we will have a decision on by the end of the year, and I don’t think this Laker sale changes that timeline at all.”
Badenhausen said Iger and Kushner had been viewed as one of the strongest prospective ownership groups in Las Vegas. Their departure takes a major bidder out of what has been a significantly more crowded field than Seattle’s. He now views Walmart heiress Nancy Walton Laurie and her husband, Bill Laurie, as a leading contender in Las Vegas. The couple has previously explored purchasing other NBA franchises and has emerged as one of several publicly identified Vegas groups. They live nearby in Henderson, Nevada.
ESPN reported Thursday that a league source said: “The NBA is prioritizing a Vegas sale before a Seattle sale to lock in a premium franchise fee.” The apparent goal would be to establish the price in the more competitive Las Vegas bidding process before completing a deal in Seattle.
The same source cautioned that the expansion process is far from complete.
“If they took a vote today, it wouldn’t pass. … It’s all about the [fee price],” the source told ESPN.
Seattle is not the only Pacific Northwest city making major decisions about its NBA future.
On Wednesday, the Portland City Council voted 8-4 to advance a proposed agreement for major renovations to the Moda Center, part of an effort to keep the Trail Blazers in Portland for another 20 years. The plan still requires additional negotiations and final votes.
The numbers are significant. Portland’s term sheet includes up to $120 million for renovations and another $275 million in ongoing capital funding. KATU reports that, when commitments from the city, Multnomah County and Oregon are combined, the public contribution could total $573 million toward the original renovation, with nearly $300 million more for continuing capital expenses.
It underscores the scale of the money now surrounding NBA teams at the same moment Seattle is trying to get back into the league.
Badenhausen said an especially aggressive Las Vegas offer could force NBA owners to compare the economics of adding one team with adding two.
“If you get an over-the-top bid in Las Vegas, where it’s eight or nine (billion), and maybe the bid in Seattle is only six, owners might say, ‘I don’t want to be diluted for only a $200 million check for expansion in Seattle. I need $300 million to dilute myself 1/30.’
It’s crazy money considering Clay Bennett’s ownership group bought the Seattle Supersonics franchise for $350 million in 2006, before moving them to Oklahoma City two years later.
That does not mean Badenhausen believes Seattle will be left out.
“I think all cards are on the table,” he said, while adding it would be a “public relations disaster” for the NBA to expand only into Las Vegas after years of anticipation in Seattle.
Seattle’s most established prospective ownership effort continues to be led by Kraken majority owner Samantha Holloway. Holloway has retained JPMorgan Chase and Moelis & Co. to help advise and structure a potential NBA bid. She also controls Climate Pledge Arena through One Roof Sports and Entertainment.
And the list of groups publicly expressing interest in Seattle may now be growing.
This week, BlackSun Private Equity and Native World Sports sent a press release out on a massive news distribution list to say it had formed an ownership group and made a formal proposal to the NBA to pursue the return of the SuperSonics.
The NBA did not immediately confirm the bid, and a spokesperson for BlackSun also could not provide more details except that the group was working with a local tribe and a location 20 miles outside Seattle to be part of a combined entertainment district. The spokesperson said more details could be released next week.