On the latest Forbes SportsMoney we interview NBA deputy commissioner Mark Tatum and dig into the numbers and explain why you can’t buy an NBA team for less than $1 billion.
The average NBA team worth $1.65 billion, up 22% from last year and more than triple the figure of five years ago. Operating income (earnings before interest, taxes, depreciation and amortization) for the NBA averaged $52 million during the 2016-17 season, a 68% increase over the previous season. The increase was mainly due to 2016-17 being the first year of the NBA’s new national media deals with TNT and ESPN. Last season each team took in $70 million in national television revenue, more than double the previous season.
Deal multiples are rising. To wit: The Houston Rockets sale to Tillman Fertitta for $2.2 billion and the pending sale of a 49% stake of Brooklyn Nets to Joseph Tsai, which values the team at $2.3 billion, value the teams at more than seven times revenue. In contrast, NFL teams being valued at about six times revenue. The Miami Marlins sale to the Sherman-Jeter group valued the baseball team at five times revenue.
The league launched NBA China ten years ago. NBA China now worth more than $4 billion, or $133 million in value for each team. Look at the Tencent deal. The league singed a $700 million, 5-year deal with the Chinese Internet and tech company in 2015 for Tencent to carry NBA games and other content on its digital platforms. That deal has been so successful that the spend for the NBA will be over $800 million.
The players are also earning big bucks. No surprise that LeBron James is at the top of the heap with more than half of his total earnings coming from his league-high endorsement earnings of $52 million.
Check out the show below. There's lots of cool graphics.
