Back in 2008, the Seattle Supersonics left for Oklahoma City because of the failure to secure a funding deal for Key Arena, which was not up to NBA standards. Now, the renovated Climate Pledge Arena, where both the NHL's Krakens and the WNBA's Storms are set to call home this fall, you guessed it, is designed to fit all NBA Standards from a design, revenue, and organizational perspective. There is no doubt that Seattle is prepared for an NBA team, but the question is why & when an NBA expansion could happen.
1. Revenue Growth & Economic Relief
Let's look at NHL's expansion to the Las Vegas Golden Knights. In 2017-2018, the Golden Knights played their inaugural season and immediately reached the Stanley Cup Finals. The incredible success of the Golden Knights generated significant revenue, and the NHL Collective Bargaining Agreement ensures players receive 50% of the total revenue generated by the league at the end of a season. For the next season, the salary cap raised by 6%.
Therefore, picking the right expansion team for the NBA, with both Seattle and Las Vegas in consideration, could bring significant boost to revenue and player salaries for the league.
Also, the expansion fee for a new NBA team could help relief short-term losses caused by the Covid-19 pandemic. Recently, NBA commissioner Adam Silver acknowledged the possibility of expanding beyond 30 teams, something he did not do before the pandemic began. During the 2019-2020 season, the NBA's revenue loss is evident, and an NBA expansion would mean the new team ownership could pay an expansion fee that is reportedly around $2.5 billion. Then, the money would be equally distributed among all teams.
Everything sounds appealing, but Silver himself also mentioned the competitive impacts of expansion as to perhaps why the NBA has not had an expansion team since 2004.
2. When could it happen? Why has it not happened?
The NBA makes significant revenue from TV media-rights deals. In 2014, the NBA made a nine-year, 24 billion deal with ESPN and Turner Sports that expires after the 2024-2025 season. An expansion to Seattle could occur sometime before the end of the deal, because the NBA can then negotiate their biggest media-rights deal ever.
According to CNBC, NBA is seeking a $75 billion media-rights package, and an exciting expansion team could help in negotiations. On a side note, Seattle is ranked 12th on the News Generation's Top 100 Media Markets list, and you guessed it, every city that is ranked in front of Seattle has an NBA team.
While Adam Silver discussed the possibilities of an NBA expansion and multiple team owners reportedly advocated for Seattle, he also pointed out their ongoing efforts in analyzing potential competition issues. Basically, not all 30 teams in the NBA are competitive and let along adding one or two new teams. The NBA playoffs were exciting this year in terms of the similar strengths among teams, but it has not been determined whether expanding beyond 30 could tick the competitive balance.
In short, not every expansion team will be as successful as the NHL Golden Knights was. An NBA expansion could make Seattle fans excited yet again, but it might not be in the league's best interest considering potential competitive issues, pending research and analysis. It is already reflected in significant drop in TV ratings, while also caused by shutdowns during the pandemic. TV Ratings will be crucial in negotiating the next media-rights deal, and so will the decision of expansion. A new deal could be made in the next four years because the current deal ends after the 2024-2025 season, which means it is possible the NBA determines its expansion plans before then. So, keep an eye on any news of an NBA expansion to Seattle, because personally, I would love to see Seattle's new NBA team when I graduate from college in four years.
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