The PE-driven rise in NBA team valuations, average NBA team now valued at US$2.58bn

Dec 17, 2021 | News

The New York Knicks have retained their place as 2021’s most valuable NBA franchise at $6.12bn in Sportico’s annual valuations, with the league’s team average value now pegged at $2.58bn.

Golden State Warriors (US$6.03 billion) were ranked second by the US-based sports business outlet, with the Los Angeles Lakers in third with a valuation of US$5.63 billion.

Sportico also says that the average NBA team value is up nine per cent on the 2020 list.

After making their first playoff appearance in seven years, the Knicks saw their value jump up by 13 per cent over last year’s list. However, the Los Angeles Clippers, saw the most significant increase, as the franchise grew 20 per cent in value to US$3.16 billion ahead of their move to a new home in Inglewood by 2024.

The Atlanta Hawks, whose value surged by 19 per cent up to US$1.83 billion, saw the next biggest jump in valuation.

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Also seeing significant growth were the Phoenix Suns, whose valuation was up 17 per cent on last year to reach  US$1.92 billion, and the Indiana Pacers (up 16 per cent) for a valuation of US$1.8 billion.

This year, the NBA started allowing single private equity firms to acquire as much as 20 per cent of a franchise, with teams allowed to sell up to 30 per cent of total stock to institutional investors.

In the last 12 months Arctos Sports Partners has acquired a five per cent stake in the Warriors at a US$5.5 billion valuation, as well as a 17 per cent share in the Sacramento Kings, in a deal which valued the team at US$1.84 billion.

In addition, private equity firm Dyal invested in the Kings and Suns, with Sixth Street taking a stake in the San Antonio Spurs.

The rise in NBA team valuations will also have an impact on what commissioner Adam Silver sees as an “inevitable” expansion in the number of franchises. Speaking back in January, Silver said US$2.5 billion was “very low” for an entry fee at this point.

Source: Sportico

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