In recent years there has been continuous conversations surrounding the potential expansion of the NBA.
The NBA’s expansion and relocation discussions often circle back to two prime markets: Seattle and Vegas.
Both cities offer unique financial opportunities and challenges.
Here’s a breakdown of how the league can make these markets viable NBA destinations from a financial perspective.
How can Seattle and Las Vegas get teams and if they are truly the most likely landing spots for the NBA if the league does decide to add teams.
🌲Reclaiming a Basketball Hotbed
Market Potential
Seattle ranks 15th in U.S. media markets with a strong sports culture and now a top economy in the entire USA, primarily fueled by tech giants like Amazon and Microsoft.
The city’s passionate fan base still yearns for NBA basketball after the SuperSonics were grossly and forcibly relocated in 2008.
Hopefully teams and leagues see how the Bengals went about ensuring they got a new stadium deal done and were able to keep the beloved Ohio franchise right where it is.
Ownership Investment
Securing ownership groups with deep pockets willing to invest aggressively in team payroll, arena upgrades, and marketing is essential.
Seattle’s existing venues, like Climate Pledge Arena, already provide a modern, fan-friendly home. The issue of the past was that the Key Arena (now Climate Pledge) was in need of a demolition and complete rebuild.
The city and the Sonics ownership could not get a deal done, primarily due to greed, and thus the team was moved to OKC.
Corporate Sponsorships & Local Partnerships
Seattle’s corporate ecosystem presents ample opportunity for lucrative sponsorships, but the NBA would need to help teams engage local businesses and integrate marketing efforts.
This however, would not seemingly be an issue as Seattle and its metro area have seen a substantial increase in average income and wealth throughout the last two decades the team has been gone.
The average income for an individual in the Seattle metro is just over 6-figures (~$105k).
For reference, this poverty line is 2x the minimum wage of most states in the country and anywhere who’s minimum wage stays below $15.
Media Rights
Negotiating regional sports network deals or streaming partnerships with strong local presence will generate significant revenue streams.
This was seen recently when the Mariners decided to do a Root Sports only deal. Locking many fans out of being able to view the Mariners without the broadcast channel, but ensured the team was being paid for every broadcast a set amount rather than based on viewership.
Unlike the NFL where the season is short and every game matters, the NBA has a harder time filling seats during their regular seasons.
Public-Private Arena Deals
Working with the city and state to finance upgrades or build basketball-specific facilities can ease upfront capital expenditures and improve fan experience.
This is what caused the relocation in the past, but with new voters and new money in the region, it is likely that a stadium upgrade could be done much easier than in the past.
🎰Untapped Markets Potential
Market Growth
Las Vegas is one of the fastest-growing cities in the U.S., with a booming hospitality industry and increasing population diversity.
The success of the NHL’s Vegas Golden Knights and NFL’s Raiders proves the market can support professional sports.
Even when there has not been a historical fanbase in “Sin City”, it is the gambling capital of the world.
With the legalization of sports betting, the attraction to Vegas teams lies more in the potential to bet and not the teams themselves.
However, revenue is revenue and the teams have shown they can run it up with other markets.
Gaming and Sponsorship Synergies
Las Vegas offers unique opportunities for partnerships with gaming and entertainment companies, creating innovative sponsorship opportunities and fan engagement models.
While sports betting has many regulations and is not allowed in some states still, Vegas is the most wide open state in the country when it comes to gambling.
Thus, a majority of sports betting companies and partnerships reside in the Las Vegas area, making teams from the city instinctively easier to make deals with and sponsor.
Arena Facilities
The state-of-the-art T-Mobile Arena in Vegas is NBA-ready, providing a prime venue with excellent amenities and capacity.
With an influx of capital from a new ownership, plus the potential for huge ROI, housing an NBA team in the Las Vegas area is not an issue.
Tourism Revenue
NBA teams in Vegas could capitalize on high tourism traffic, generating strong ticket sales, merchandising, and hospitality income.
People literally visit Las Vegas everyday, year round.
Currently their is not an MLB team or NBA team in the region, which are two leagues with the longest regular seasons and fan interest.
Getting teams from these leagues to the city would mean year-round revenue generation potential for not just the new franchises but the city and its economy as well.
Legal and Regulatory Environment
The NBA can benefit from Nevada’s favorable tax policies and legal frameworks that support sports betting integration.
Aligning with league-wide digital monetization strategies.
The state of Nevada is one of just 9 remaining in the USA that has no income tax.
This means players, coaches, ownership and franchises as a whole earn/save anywhere from 4%-12% more of their annual income compared to other sports cities.
💡Financial Strategies for NBA Expansion
- Revenue Sharing Models: Adjusting league revenue sharing to support new market teams initially can help stabilize finances as they build fan bases.
- Incentivizing Local Investment: Offering financial incentives or reduced league fees to ownership groups committed to community engagement and market development.
- Leveraging Tech and Data: Using advanced analytics and fan engagement tech to optimize marketing, ticket pricing, and merchandise sales.
- Maximizing Media Exposure: National broadcasting deals combined with localized content creation to boost team and market visibility.
🔮The Future
Bringing NBA teams back to Seattle and introducing a new franchise in Las Vegas requires strategic financial planning and investment.
Both cities possess the demographics, infrastructure, and enthusiasm to support NBA franchises. It’s now about aligning league incentives, ownership willingness, and local partnerships to make it happen.
If the NBA were in fact to expand by 2030 when media rights are in need to be renegotiated for most pro sport leagues, Seattle and Las Vegas make the most sense due to city populations, economy, and the ability to generate revenue for both the new teams and the league itself.
At the end of the day, the NBA and all pro sports leagues are corporations that focus on their bottom lines.
If expansion is inevitable, then adding teams in markets with the most growth and wealth potential is simply a no brainer.
Or the NBA could attempt to experiment and throw a couple of teams in Alabama and Missouri…
Take your pick.
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Credits
Written by: Aidan Anderson
Research and Analysis: Apostle Sports Media LLC
Sources: NBA.com, Forbes Sports Money, Sports Business Journal, Bloomberg Sports Finance, Various, APSM Proprietary Analysis.
Featured Image: Public Domain / Wiki Commons
Disclaimer: This article contains general financial information for educational purposes and does not constitute as professional advice.
