Sports teams have become the shiny new car for the richest of the rich to buy.
The likes of former Microsoft CEO Steve Ballmer, celebrities like Ryan Reynolds, and even former athletes like Tom Brady have dipped their toes into team ownership over the last decade. Unlike real estate or the stock market, owning a sports team has the added benefit of being able to go to an arena to support the team.
And unlike a shiny new McLaren, teams don't lose value the moment they're rolled out of the garage. In fact, sports teams are becoming one of the best investments of the last few years, and teams in the National Basketball Association are the perfect example.
Sportico released its 2023 valuations for NBA franchises, and it revealed that the average NBA team is valued at $3.85 billion, a massive 35% increase from just a year ago.
One team led the pack by breaking the $8 billion valuation mark for the first time for an NBA franchise. That's the Golden State Warriors, who despite growing a relatively low 10% year-on-year, are now valued at $8.2 billion on Sportico.
The only other sports franchise Sportico projects to be more valuable than the Warriors are the National Football League's Dallas Cowboys at $9.2 billion.
Behind the Warriors and breaching the $7 billion barrier are the New York Knicks and Los Angeles Lakers, at $7.43 billion and $7.34 billion respectively.
The top three teams are the same as last year, so it's no surprise to see them at the top. The Lakers hold an over $2 billion gap over the fourth team, the Boston Celtics, who are worth $5.12 billion.
The Chicago Bulls round out the top five at $4.83 billion.
The top five of Sportico's list is similar to the list released by Forbes in October, except Forbes had the Los Angeles Clippers over the Bulls in the top five. Forbes also valued the Warriors at $7.7 billion, over a billion dollars ahead of the Knicks at $6.6 billion and Lakers at $6.4 billion.
But while the big name teams will make the headlines, the bottom of the list is what is driving up the overall percentage growth. Of the 15 least valuable teams — or the bottom half of the list — 12 of them saw at least 50% year-on-year growth.
The biggest year-on-year gains come from the Oklahoma City Thunder, which grew 76%, and the Minnesota Timberwolves, which grew 73%.
Related: NBA player contracts are skyrocketing — here's how high they can go
The NBA valuation growth can be attributed to several things, including the anticipation for the upcoming media rights deal starting the 2025 season that could significantly increase the league's revenue.
There's also the influx of institutional capital that has entered the NBA after the league allowed private equity to begin minority investments in teams in 2020. The ability to gain minority ownership in a franchise through private equity has increased the pool of investors.
At large, sports teams have become valuable not just because of the appeal, but also because live sports have become a staple in the media landscape despite the massive evolution of the space. The cord-cutting era has made it difficult for linear television to stay afloat and many media companies are shifting to streaming, but the viewership and interest in sports has remained firm during the transition.
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