Nearly 25% of NBA franchises have changed hands since 2020. This year alone, three franchises announced sales—the Celtics, Lakers, and Trail Blazers—at a collective valuation of more than $20 billion.
Zooming out, there have been 23 change-of-control sales since 2010—including the Hornets and Bucks being sold twice during that time period. Compare that with the 1990s, when such deals happened less often and at much lower valuations; notable examples from that era include the reported $85 million purchase of the Magic by Richard DeVos and Glen Taylor’s $88 million deal for the Timberwolves.
Today, the pace and price tags of team sales are staggering.
“The record sale prices demonstrate the strong interest in NBA team ownership,” NBA spokesman Mike Bass tells Front Office Sports.
Looking at each deal individually shows there are unique drivers for why teams are getting sold. That can include sudden scandals (the Suns sale in 2022 happened after owner Robert Sarver was pushed out amid controversy over his use of racially insensitive language and unequal treatment of female employees), as well as patriarch mandates (this year’s Blazers sale was in line with the wishes of the late Microsoft cofounder Paul Allen).
But there are some commonalities.
Mark Cuban—who stunned the basketball world in 2023 when he sold a controlling interest in the Mavericks after nearly 25 years at a $3.5 billion valuation—says that many owners who have recently sold their teams view the current moment as a good time to step aside, especially given the high valuations. The owners who have recently sold include Jeanie Buss (64), Jody Allen (66), and Wyc Grousbeck (64). Cuban is 67.
“We all are around the same age and at some point you have to consider what comes next for the team and your family and estate,” Cuban tells FOS.
Compare that to some of the recent team buyers and it’s clear Cuban has a point: New Timberwolves owners Marc Lore and Alex Rodriguez are 54 and 50, respectively; new Celtics owner Bill Chisholm is 56, and incoming Blazers owner Tom Dundon is 54.
But age isn’t the only factor at play. Cuban has been vocal in the past about the glaring fact that, in the modern era, teams need to create additional revenue streams, like big real estate developments around their arenas. He has also been critical of the rise in private-equity investors getting in the game—nearly two-thirds of NBA teams entered this season with at least some connection to private-equity money.
“Economically, the choices are to become a real estate company around a new or updated arena, bring in [private-equity] money—which many who have not sold are doing—or both,” Cuban tells FOS.
The league formalized a pathway for PE and other institutional investors to take minority stakes in teams in January 2021, although the rules remain strict. A single PE fund is allowed to hold up to a 20% stake in as many as five teams, but the fund is not allowed to have any governance rights, and cannot have any say in team management matters. No more than 30% of a given team, in total, can be owned by private equity.
Still, private-equity firms are increasingly involved: Sixth Street was part of the group that bought the Celtics and also owns a stake in the Spurs; Dyal HomeCourt Partners owns pieces of the Hawks and Timberwolves; and Arctos Partners holds stakes in the Warriors, Kings, and Jazz.
Tripp Crews of business valuation and advisory firm Mercer Capital tells FOS the league’s decision to open up its doors to private-equity money is “one key driver” of the trend of recent sales: “Backed by institutional capital, these groups can give legacy owners, whose wealth may be heavily concentrated within a franchise, liquidity options not previously feasible under the old structures.”
Additionally, Crews says capital injections from private-equity and other institutional investors could “in turn create a more attractive product for television [and] streaming platforms, leading to even more lucrative media-rights deals.”
To that end, the NBA’s new $77 billion media-rights deal with ESPN, NBC, and Amazon that kicked in this year represents a 220% increase from the prior deal, reached in 2016 and valued at $24 billion. That deal had been a 180% increase from the prior 2007 agreement.
Jesse Silvertown, principal at forensic accounting firm Hesperus, agrees the majority of recent team sales could be attributed to “aging owners, estate planning or scandals, which are unpredictable by nature.”
He tells FOS part of the reason there have been more change-of-control sales recently in the NBA compared with the NFL and MLB is that the NBA is “the most investor-friendly league in North American pro sports,” thanks to a higher cap on private capital, limited labor strife, and a big-money, long-term media-rights deal.
Taken collectively, the current NBA environment is a likely catalyst for more imminent team sales.
“My guess is that this is the start of a trend,” Crews of Mercer Capital tells FOS. “The combination of soaring valuations and private equity gaining access to this new class of assets should create more of these transactions in the future.”
