NBA team values keep soaring, should bode well for stake in Nets now on block
The jaw-dropping, record-setting $2.2 billion sale of the Houston Rockets that eclipses Steve Ballmer’s 2014 purchase of the Los Angeles Clippers for $2 billion signals a soaring of team values in the NBA that shows no sign of a slowdown.
“The Rockets sale validates the Clippers price and raises the bar for every franchise in the NBA,” said George Postolos, former president of the Rockets who now runs The Postolos Group, a sports advisory firm.
The Rockets sale to billionaire Tilman Fertitta announced last week comes as revenue continues to pour into the league from its nine-year, $24 billion television deal that began last season, its new $1 billion apparel deal with Nike, and steady growth in international revenue.
“What the Rockets deal tells me is that the Clippers were not an aberration,” said one sports investment banker familiar with current team deals. “Everyone was wondering if it was Ballmer or the Los Angeles market. The answer is that it is the NBA. If you buy the Rockets, you get one-thirtieth of NBA International, which will be a giant business.”
The next indicator of the NBA’s franchise values will be measured by the Brooklyn Nets, which last year announced plans to sell a minority stake in the team. Allen & Co. has been hired to bring in buyers and sources said the strategy has shifted to include a path to control of the team, a move that could spur the sales effort.
“What is a team in New York City worth?” said a banker familiar with league finances. “These are scarce properties.”