The higher the ante, the more money that goes into NBA owners’ pockets.
The people who are doing the reporting on the National Basketball Association’s possible expansion into Las Vegas and Seattle are pointing out that the owners’ committee doing market research wants to award Las Vegas a franchise before Seattle. According to the reports, there is a bidding war underway in Las Vegas and the 30 NBA owners could end up splitting far more money from the expansion fee from the winning bid in Las Vegas than previously thought. Maybe as much as $10 billion. The notion of why finishing the work on the Las Vegas bidders first seems to be this. There seems to be one bona fide Seattle bidder, the owners of the National Hockey League’s Seattle Kraken franchise who run the Seattle state-of-the-art arena. The theory is that the also rans in the Las Vegas bidding might turn to Seattle and express an interest in running a franchise in the city.
In an auction, the goal is to get bidders to up the ante. The more the eventual owner pays for a franchise, the more money that goes into the NBA owners’ pockets. The NBA owners keep all of the expansion money. If NBA owners end up with $16 or $17 billion in expansion fees, they split that 30 ways which means each owner might end up with between $533 million and $566 million for doing nothing but adding two businesses. Ticket and gate receipts count for maybe 15-20 percent of total team revenue. How expensive will it be for customers to watch games? In 2008, the last year Seattle had a team, the average ticket price was $35 or $54 today. It is around $326 today. It is really expensive to attend a game and could be much more when Las Vegas and Seattle start hosting games.
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