NBA expansion may be too lucrative for owners to pass up

NBA owners are still accepting bids for potential expansion teams in Las Vegas and Seattle. The reported skyrocketing values of those bids could make a vote to approve two new teams a foregone conclusion.

The price tag for the Las Vegas franchise is reportedly above $10M, while bids for a Seattle team could exceed $7M. That's a one-time windfall of over half a billion dollars for each of the 30 NBA teams.

NBA expansion prices are staggeringly high

Perhaps this shouldn't be a surprise when the Los Angeles Lakers sold for a $10B valuation in 2025, and again for $12.5B this summer. However, $10B for a franchise that doesn't exist yet seems wildly expensive, given that the NBA was estimating expansion fees of $4B to $5B two years ago.

That should make expanding to 32 teams irresistible to the owners. Franchise values are exploding while the league's revenue growth hasn't been as fast as anticipated, even after the NBA struck a media deal worth $7B per season. Despite predictions of a 10 percent annual increase in the salary cap, the most allowed by rule, slowing revenues meant the salary cap went up just 6.67 percent this season and only 3.36 percent in 2024.

Not only are expansion fees a huge injection of capital for teams, they don't count as basketball-related income for the purposes of revenue sharing. Players get 51 percent of BRI, but they don't get to share expansion money — or relocation fees.

NBA may delay plans to help arena wishes

While expansion looks inevitable, the NBA may still drag its feet to get more lucrative returns in the form on new arenas. Commissioner Adam Silver has suggested Las Vegas needs a "modern entertainment palace" for its proposed NBA franchise, despite the T-Mobile Arena being just 10 years old.

Seattle has the newer and fancier Climate Pledge Arena, which Silver says could let the NBA move a team in within "five weeks." But choosing expansion cities does remove leverage for teams like the Portland Trail Blazers, who have already threatened relocation if their demands for a publicly-funded arena aren't met.

Still, owners who are set with their own arenas may not want to wait on the big expansion windfall. The timing may still be up in the air, but the NBA is inexorably moving to 32 teams.