The “get-in” price for an NBA team has more than doubled since Sportico’s initial NBA franchise valuations three years ago. The New Orleans Pelicans, the league’s least valuable team, is worth $2.72 million, way up from its 2020 valuation of $1.35 million. And the Pelicans aren’t an outlier.
The biggest team-value spikes in recent years have been at the bottom of the rankings. The three least valuable NBA teams—the Pelicans, the Memphis Grizzlies and the Minnesota Timberwolves—are +101%, +107% and +106%, respectively, over the past three years. Those at the top—the Golden State Warriors, New York Knicks and Los Angeles Lakers—have grown considerably in value, but still much less proportionally, at +59%, +37% and +43%, respectively.
The trend is similar in the NFL, where the least valuable team (Cincinnati Bengals) is worth $4 billion, up 89% since 2020. The Detroit Lions and Buffalo Bills have each increased their value by 92% during that timespan, while the “blue bloods”—the Dallas Cowboys, New England Patriots and New York Giants—are +43%, +34% and +76%, respectively.
The story is the same in both leagues: New media rights deals and national revenue opportunities in addition to scarcity are boosting values in even the smallest markets.
The NFL’s cash cow is its collection of media agreements that will rake in more than $10 billion a year until 2033. Each team receives an equal share of that revenue on an absolute basis, which naturally benefits the lower-value teams more on a percentage basis.
Last year, all 32 teams cashed a check from the league worth nearly $375 million before selling a single ticket, hot dog or local sponsorship. It is impossible for any franchise to lose money, and the variance in local revenue among most teams isn’t particularly large when compared to the size of the national revenue haul.
It’s almost time for the NBA to secure its next round of national TV contracts, which are set to expire after the 2024-25 season. The current deal generates $2.66 billion per year for the league on average, and the expectation is that the next agreement, which could include as many as five partners, will double that number.
Expansion will provide an additional source of national revenue for NBA teams within the next decade. With several recent franchise sale prices exceeding $3 billion, each potential new team should pad the league’s accounts by at least $4 billion. Those expansion proceeds would not only be split evenly among all teams, but are also not subject to revenue sharing with the players, so they would go directly to the owners.
Scarcity has also driven franchise values higher. Only four NFL teams have sold in the past decade, and while the NBA market has been much more active, with three teams changing hands this year alone, there are still only 30 NBA teams in the world. Opportunities to buy a majority stake in a major sports league are relatively rare, and it’s intuitive that scarcity disproportionately drives up the get-in price more than the price for the premium assets.
Mat Ishbia’s purchase of the Phoenix Suns at a $4 billion valuation also reset the market, revealing what an eager, deep-pocketed buyer would be willing to pay for a non-premier franchise. Hence, the valuations for bottom rung teams are booming.
It’s worth noting that the opposite is true in MLB. Many of the lower-ranked teams are weak businesses, and most are associated with Bally Sports, whose owner Diamond Sports Group filed for bankruptcy in March. In baseball, local markets are much more important, as national revenue accounts for only 26% of the teams’ combined total, a far cry from the 64% for the NFL and 39% for the NBA.
MLB valuations across the board have stagnated. Nine of the 10 most valuable MLB teams, though, have still increased their values by at least 5% between 2021 and 2023, but that was only the case for two of the bottom 10 teams. Meanwhile, three of the bottom 10 teams lost value (Miami Marlins, Cleveland Guardians, Cincinnati Reds) and two others saw theirs stay the same (Pittsburgh Pirates, Colorado Rockies).
The NBA’s new media rights package will make the league’s business model look much closer to the NFL’s than MLB’s, with the league office distributing a huge sum of money to each team every season. That similarity is reflected in the valuations. After passing baseball in the early 2010s, the average NBA team value of $4 billion is now much closer to the NFL’s $5.14 billion average than MLB’s $2.36 billion mark.
That rising tide is indeed lifting all boats, but it’s lifting the smallest ones the most.