The National Basketball Association (NBA) held its league meeting last week in Manhattan with its board of governors. Commissioner Adam Silver and the league’s 30 owners discussed several relevant items — media deals, the upcoming 2024-25 season, private equity, etc. — but one thing that wasn’t addressed was expansion.

Here’s what Adam Silver had to say after the meeting was over:

“There was not a lot of discussion in this meeting about expansion, but only largely not for lack of interest, it was that we had said to them that we’re not quite ready…It was something that we told our board we plan to address this season, and we’re not quite ready yet. But I think there’s certainly interest in the process, and I think that we’re not there yet in terms of having made any specific decisions about markets or even frankly to expand. I’ve said this before, I think over time organizations should grow. It is appropriate. But it gets a bit complicated in terms of selling equity in the league, what that means for the existing television relationships, etc. What we’ve told interested parties is thank you for your interest, we’ll be back to you.”

This is a hot topic primarily because the NBA’s desire to expand is the worst-kept secret in sports. In fact, Commissioner Adam Silver and some of the NBA’s owners have openly talked about how they 1) want to expand from 30 to 32 teams and 2) plan to figure out the details (think: city, team, owners, etc.) after the new media rights deal.

However, that media rights deal is now finalized, with the NBA landing an 11-year agreement worth $76 billion with three partners: Disney (ABC and ESPN), Comcast (NBC and Peacock), and Amazon (Prime Video). And many NBA fans now want to know if their city might potentially be considered for an NBA expansion team.

So, let’s run through it. This topic can be broken down into three parts:

1. The (financial) case for NBA expansion

2. The NBA’s criteria for an expansion city

3. Potential owners of expansion teams

Many people make the expansion argument more complex than it needs to be, but the easiest way to think about it is that all 30 NBA teams evenly split league revenue.

So, if you want to add new expansion teams, they not only need to pay a high enough entry fee to warrant access into that revenue-sharing agreement (because that fee is evenly split between the league’s other owners), but these expansion teams also need to prove that their addition can help significantly grow top line revenue in the future.

The common argument is that more teams mean more games, leading to higher ticket sales, bigger sponsorship deals, more merchandise purchases, and increased TV rights.

But that is a projection-based argument, which is why the expansion fee is essential.

For example, I’ve seen many reports over the last few years that say NBA expansion teams would have to pay $2.5 billion to join the league. However, Adam Silver has said that number is too low, which I agree with because the math doesn’t work, and my guess is that the expansion fee ends up being significantly higher, like $5 billion-plus.

This would easily be the highest price for an expansion team in history. The talent level wouldn’t get diluted because the NBA has increasingly attracted international talent — the NBA had 29 international players in 1997, but that number increased to 125 last season — and private equity capital has widened the league’s investor base.

But after we agree that adding two expansion teams makes financial sense — it does! — it’s time to decide on potential locations, including the city, owners, and arena.

The most important factor when considering an NBA expansion franchise is the size of that city’s media market. Nearly all of the league’s teams currently operate in the country’s top 50 media markets, except the New Orleans Pelicans (but I don’t count that because New Orleans is the country’s 51st-largest media market).

From there, we can eliminate some potential options for various reasons — Raleigh is a college town, Pittsburgh currently has three professional sports teams, the NFL and NBA have already left San Diego, etc. — and we are left with a handful of markets.

Potential NBA Expansion Markets By TV Audience

• Seattle: #13 with 2.071 million homes

• Las Vegas: #40 with 889,000 homes

• St. Louis: #24 with 1.285 million homes

• Louisville: #48 with 708,000 homes

• Tampa: #12 with 2.143 million homes

These markets all have viable international airports, so that’s not a problem.

However, Tampa is only 85 miles from Orlando, and Louisville is only 115 miles from Indianapolis, so the Magic and Pacers would raise concerns with those two cities due to the potential impact of an expansion franchise on a neighboring team’s market.

The arena in St. Louis is also 30 years old, whereas Climate Pledge Arena in Seattle already hosts NHL and WNBA games, and T-Mobile Arena in Las Vegas was used for the finals and semifinals of the NBA’s new In-Season Tournament (IST) last year.

There are some other positive factors — Seattle has existing brand equity through the Supersonics, and Las Vegas has proven its market value with the Golden Knights (NHL) and Raiders (NFL) consistently selling out games — but this is ultimately why many people expect the NBA’s two expansion teams to land in Seattle and Las Vegas.

That brings me to ownership, as expansion markets are only viable if the NBA can find someone willing to pay the potential $5 billion-plus expansion fee.

Amazon’s Jeff Bezos has been associated in some way, shape, or form with multiple sports franchise sales over the past few years — from the Commanders (NFL) $6 billion sale last year to the Celtics (NBA) ongoing sale right now. Bezos also has plenty of money and wouldn’t need any limited partners, and many people assume that he would be interested in the Seattle team, given Amazon’s headquarters in the city.

However, I don’t think Bezos is interested in ownership. Not only would Amazon’s relationship with the NBA cause a conflict of interest, but Bezos is already in a great spot, as Amazon’s broadcasting deal provides him with financial upside tied to the league’s overall success without dealing with the day-to-day minutia of owning a team.

Instead, the frontrunners for the Las Vegas team have to be Fenway Sports Group (and LeBron James) and David Bonderman and Samantha Holloway for the Seattle team.

FSG already owns a handful of sports assets — the Boston Red Sox, Pittsburgh Penguins, and Liverpool FC. After recent fundraising efforts, they have enough cash to make it happen and have made it clear to the NBA that this is their intention.

Seattle’s potential ownership group is equally as qualified. For starters, the Seattle Kraken, which Bonderman and Holloway own, is a recent expansion team in the NHL. Bonderman also currently has a minority stake in the Celtics, which he will sell through the upcoming bidding process (but also provides him with a leg up because of his familiarity with the NBA).

So while Adam Silver continues to keep his cards close to his chest, the NBA will expand at some point over the next few years, and the winning markets (and owners) might already have been decided.

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