LAS VEGAS — NBA Commissioner Adam Silver said Monday there is no way for sovereign wealth funds to become the majority owners of an NBA franchise “in the foreseeable future.”
“I don’t want to say what could ever happen, but there’s no consideration right now,” Silver said during a question-and-answer session at the Associated Press Sports Editors convention. “I think it’s very important for us that individuals are able to control our teams, take responsibility to the fans, take responsibility to their partners and the players when we put sovereign wealth funds aside.”
“It is very important to us that there is a person [in charge], independent of sovereign wealth funds. I think that’s about the connection to the community, the connection to the players and their other partners in the league.”
Under current NBA investment rules, the majority owner of an NBA team must own at least 15% of the franchise, and a sovereign wealth fund can only make a passive investment in a team of no more than 5%.
Last month, Qatar’s sovereign wealth fund bought a 5 percent stake in Monumental Sports & Entertainment, acquiring stakes in the NBA’s Washington Wizards, the WNBA’s Washington Mystics and the NHL’s Washington Capitals. And one of the biggest stories in North American esports in the first half of 2023 was the potential merger of LIV Golf, funded by Saudi Arabia’s Public Investment Fund, and the PGA Tour.
In recent months, both the Milwaukee Bucks and the Phoenix Suns have surpassed previous franchise valuation records in their most recent sales. Marc Lasry’s stake in the Bucks was $3.5 billion as of March, and Mat Ishbia bought the Suns from Robert Sarver for $4 billion in February.
These soaring valuations in recent years have helped the NBA open up opportunities for private equity firms and sovereign wealth funds to buy shares in teams. According to Silver, fewer and fewer people are able to write such checks. But he also argued that these ratings are not part of a bubble, saying the underlying economics of the sport and the value of live sport in general validated them.
“I think a bubble would be indicative of some kind of irrational valuations,” Silver said. “I think if you look at the revenue, at least in the NBA’s case, that’s being generated by the league, the growth opportunities, the global market that we’re addressing here, and maybe because of that, there are certain unique aspects of the NBA that are like global.” our league is.
“I don’t think there’s anything irrational about it. Part of the reason we’ve opened up investment opportunities for private equity firms and sovereign wealth funds is because, frankly, we’re running out of people who are in a crisis position to write such checks, especially if you’re not the one are the controllers of the team.
Silver added that he believes these companies see value in buying into the NBA — and buying into the value of live sports — to back his argument.
“Interestingly, these funds are making financial investments in these teams,” he said. “I think the investment community is just following this trend and saying this is a real growth opportunity.”
“So, as you’d expect, I’m still very optimistic about the opportunity here. But I think if you look at the fundamentals of our sport, if you look at all these different platforms’ huge interest in live broadcasting.” Sports programming… I think that’s why we’re seeing a very positive outlook and why these values are ultimately representative of the market.”
Silver also hit on a few other issues, including:
– Addressing National Basketball Players Association executive director Tamika Tremaglio’s criticism of his decision to suspend Ja Morant for 25 games by saying that the indefinite nature of the suspension is to come up with a plan that will allow Morant would enable us to get back on the pitch in the best possible way.
“What I didn’t want was to have any other mandatory requirements in view of a return,” Silver said. “I wanted to create a mutually acceptable program that would help him put his life in order before he returns to NBA basketball. And as I understand it, he continues to seek help. And I know there’s tremendous pressure coming on him with an NBA player, especially a Superstar player. So I totally understand the pressure he’s under.
“But I also feel like we need to take this incredibly seriously, especially around guns and the gun violence that we see among young people in our society. This is not an attempt to weigh up what the appropriate weapon restrictions should be. This is about gun safety. And since our first meeting, we seem to have agreed on how serious the problem is.”
–Silver reiterated that while expansion is not a certainty, it is at least a strong possibility.
“It’s not certain, but like I said, I think it’s normal for organizations to grow over time,” Silver said. “We’ll look at it [Las Vegas]. There is no doubt that interest in Seattle is enormous. That’s no secret. There are other markets that have expressed interest.
“And just for the people who will hear or read about this interview: We are not currently involved in this process. I mean, we’re not hosting meetings with potential groups at this time. What we all say in private is the same thing. I say publicly that by the time we are ready to consider enlargement, there will be a very open process. But that’s not the – that’s not now.”
– Silver praised the maturity of 2023 draft No. 1 Victor Wembanyama for how he’s dealt with everything that has come his way in recent weeks, adding he’s glad Wembanyama is back after a disappointing first game got back on his feet for the San Antonio Spurs on Friday with a strong performance on Sunday against the Portland Trail Blazers before being suspended by the Spurs for the remainder of the summer league.
“I had the opportunity to hang out with him in New York during the draft,” Silver said. “I also met him when we played a regular-season game in Paris in January. And my first reaction is that he’s an incredible young man. I almost don’t want to blame the young man, because he just seems to be an incredible person. [He is] mature beyond his age, cosmopolitan, cultured, thoughtful and also has the potential to do amazing things in this league.”