Sports
The Most Valuable NBA Teams 2023 – Forbes
Less than four years ago, the entry price for an NBA expansion team was $2.5 billion. Once the league signs off on its next round of central media rights deals, that number will balloon to $4 billion to $5 billion.
Today, the average NBA team is worth $3.85 billion, an increase of 35% from a year ago and 75% higher than in 2019. And with the league set to rake in some $13 billion this season (before debt payments and revenue sharing), 11% more than last season, valuations are still heading skyward.
One of the NBA’s growth areas is sponsorships, which inched up last season but could see double-digit growth during the 2023-24 campaign because of the league’s new in-season tournament and more jersey patch deals, like the one recently inked by the New York Knicks.
And while the Denver Nuggets may have captured the NBA title last season, no one is close to usurping the Golden State Warriors, who are the league’s most valuable team for the second consecutive year at $7.7 billion, up 10% from a year ago. The Warriors generated $765 million in revenue (net of arena debt service and revenue sharing during the 2022-23 season), 48% more than any other team. The Knicks ($6.6 billion) and the Los Angeles Lakers ($6.4 billion) are the other teams worth more than $6 billion.
The surge in values this year was driven by the two majority stake sales of NBA teams during the past 12 months—the Phoenix Suns sold for $4 billion to Mat and Justin Ishbia in February, and in August, Michael Jordan sold the Charlotte Hornets for $3 billion to Rick Schnall and Gabe Plotkin—as well as the purchase of 25% of the Milwaukee Bucks at a $3.2 billion valuation by Jimmy and Dee Haslam in April. (Marc Lasry’s minority stake sale to the Haslams was included because the new owners will rotate with majority owner Wes Edens as governors of the team.)
The three transactions are among the top four all-time NBA sale prices and underscore the lofty multiples of revenue buyers are willing to pony up to own a team. The Suns went for 13.2 times revenue, second to the 13.7 revenue multiple that Steve Ballmer paid for the Los Angeles Clippers in 2014. Meanwhile, the deals for the Bucks and the Hornets were valued at 9.7 and 11.2 times revenue, respectively. By contrast, Robert Sarver paid 3.6 times revenue for the Suns in 2004, Edens and Lasry paid 5 times revenue for the Bucks in 2014, and Jordan paid less than twice the revenue for the Hornets (then the Bobcats) in 2010.
The escalation in sale price multiples is due to the expectations over a major increase in media rights. The league’s current deals for U.S. rights with ESPN and Turner Sports average a total of $2.66 billion a season through 2024-25 while international rights, splintered among many distributors (including DAZN and Sky Sports), bring in about $500 million annually. The consensus from media experts and sports bankers is that by bringing in new distributors such as Apple, YouTube TV and Amazon Prime, and bundling its international rights, the NBA will more than double the value of its current media rights.
Since national and international media revenue is split evenly among the 30 teams, such a scenario would benefit low-revenue teams more than high-revenue teams. For example, teams like the Warriors and the Knicks would see their overall revenue increase by roughly 15% and 23%, respectively. But low-revenue teams like the Memphis Grizzlies and the Minnesota Timberwolves would see their overall revenue increase by about 40%. That discrepancy is why the teams in the top half of the 2023 list, on average, increased in value 28% compared with a year ago while the bottom 15 teams increased 57%.
During the 2022-23 season, the NBA’s revenue rose 6% versus the previous season, to an average of $353 million per team, net of debt service and revenue sharing. But operating income (earnings before interest, taxes, depreciation and amortization) fell 22%, to an average of $71 million per team, mainly because of higher player costs (including benefits and escrow payments).
And with the expected addition of two expansion teams—most likely in Seattle and Las Vegas—the NBA math will change yet again.
The Most Valuable NBA Teams 2023
Revenue and operating income (earnings before interest, taxes, depreciation and amortization) are for the 2022-23 season and are net of revenue sharing and arena debt service and include revenue that team owners get from non-NBA events at their arena. Forbes uses revenue multiples to calculate team values (equity plus net debt) based on historical transaction multiples for controlling stakes in teams. All figures are in U.S. dollars based on the average U.S.-Canada exchange rates during the 2022-23 season. The information used to compile our valuations primarily came from interviews with teams, sports bankers and media consultants, as well as public documents, such as arena lease agreements and bond documents.
