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The NBA-owned D-League, once an eight-team operation playing solely out of the Southeast, is now a coast-to-coast business marked by sharply rising franchise values and enough demand from NBA teams to suggest further expansion could be ahead.
The D-League played its 2013-14 season with 17 teams. It will add one more franchise next fall, when a team bought by the New York Knicks begins play in Westchester County, near the Knicks’ training facility. The cost of entry: About $5 million, up from the $4 million the Philadelphia 76ers paid just one year ago for the nearby Delaware 87ers.
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That mission, from the NBA’s perspective, has been there from the start: Use the D-League teams as training ground not only for players but also for coaches and for team executives.
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Along with the added Knicks-owned franchise, the D-League’s Springfield, Mass., team is being relocated for next season to Grand Rapids, Mich., to serve as a direct affiliate for the Detroit Pistons. That deal, announced last week, is one of the D-League’s “hybrid ownership” agreements, where a local owner runs the business side of the team while the affiliated NBA club controls all basketball
It gives the D-League 18 teams for 2014-15, with 15 of those 18 having single affiliates. The other three D-League teams (Bakersfield, Fort Wayne and Iowa) would be shared as affiliates by the 15 NBA clubs without single-affiliation deals.
NBA Commissioner Adam Silver said the D-League has come into its own in the last few years.
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Securing nearby direct affiliates with NBA teams brings cost
“The D-League has an enormous amount of potential, because as good as Division I men’s basketball is, people in the industry and our basketball folks will always say that D-League basketball is the next best basketball in the world after the NBA,” Silver said. “Roughly 20 percent of NBA players now have had experience in the developmental league, so I think we have just begun to scratch the surface with that opportunity.”
The D-League posted its fifth consecutive season with a gate increase this year, with total attendance of 1.1 million and an average attendance up 4.6 percent to 2,838 fans per game.
That growth comes on top of what Reed points to as other factors in being elements that will shape the future of the D-League and its teams, though he refused to talk about specifics in terms of economics and profitability.
“The rush of NBA teams in the league has created big cost savings,” Reed said, “so the profitability is increasing and that is helping drive franchise values.”
Staff writer Terry Lefton contributed to this report.
The NHL Shift appears originally each Friday on SportsBusiness Journal’s On The Ground blog.
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