SBJ/May 9-15, 2016/Finance

Warriors valued at $1.6B

Sale of small stake shows strong market

The Golden State Warriors were valued at $1.6 billion as part of a limited partnership sale in the team earlier this year, according to financial sources.

The stake that was sold is small, around 1 percent to 2 percent, so the transaction itself was only a low-eight-figure exchange. Still, it offers the latest evidence of the soaring value of professional sports teams and places a real value on the reigning NBA champions.

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The Warriors declined to comment, as did Bob Caporale of Game Plan, the investment bank that brokered the sale.

The Golden State valuation compares to the record-setting $2 billion price paid by Steve Ballmer in 2014 to buy the Los Angeles Clippers. That price was viewed at the time as widely overinflated, drawing largely from the Microsoft leader’s willingness to spend to enter the NBA. Now, that Clippers’ price, while still very high, is not such a spectacular outlier.

Last year, the Atlanta Hawks sold at a valuation of around $840 million. The Brooklyn Nets in December were valued at $845 million as part of controlling owner Mikhail Prokhorov’s purchase of a large minority share.

INSIDE THE NUMBERS
Joe Lacob and Peter Guber bought the Warriors in 2010 for $450 million.
The higher valuation compares to a $2 billion price for the Clippers in 2014.
“The Warriors are obviously a great brand, and people are willing to pay up for that,” said sports investment banker Sal Galatioto, who represented Chris Cohan in 2010 when he sold the team for an at-the-time record $450 million. Game Plan advised the buyers and current owners, Joe Lacob and Peter Guber.

There may soon be another chance for a higher value on the Warriors, as well. The same sources said a larger, 7.36 percent stake in the team held by a voting member of the executive committee was quietly shopped before the NBA playoffs began and may be again once the postseason ends.

It’s not hard to figure out why the Warriors’ value increased nearly fourfold in just over six years. The defending NBA champs this season broke the all-time regular-season wins record, going 73-9, and are led by one of the league’s top players, reigning MVP Stephen Curry, making the team perhaps the hottest brand in sports. The Warriors led the NBA in local TV ratings this season, with an all-time team best 9.76 average rating on Comcast SportsNet Bay Area. The club, which has a 175-game sellout streak, also has been a pacesetter with technology, becoming the first U.S. professional sports team to use virtual reality in-game. It recently became the first team to use a smart court system, as well.

And there’s more ahead. The team this year signed a massive naming-rights deal with JPMorgan Chase to bolster its investment in a privately financed $1 billion, 18,500-seat arena and commercial development planned in San Francisco. That venue is slated to open in 2019.

It could not be determined who sold the limited partnership stake, though one source said the seller bought a similar-sized position in another NBA team and so had to sell under NBA rules.

Staff writer John Lombardo contributed to this report.

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