NBA team owners on Tuesday authorized league officials to begin an in-depth analysis regarding expansion, but NBA commissioner Adam Silver said there was no timetable for any changes.
The NBA board of governors meeting in Las Vegas marked the first time team owners officially discussed expanding the league beyond 30 teams, but Silver said they went no deeper than requesting more research into the possibility.
“There is a significant step now in that we’re now engaging in this in-depth analysis,” Silver said. “It’s something we weren’t prepared to do before, but beyond that, it’s really day one of that analysis. In terms of price, potential timing, it’s too early to say.”
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“That also assumes the outcome of this analysis,” he said. “It’s truly a complicated issue.”
Silver said that the NBA advisory finance committee “would have primary jurisdiction over this issue,” while the league’s audit and strategy committee “would be looking at the economics around it,” with “roughly half the principal governors in the league” on those committees.
“We have the focus and attention of our board members on this issue,” he said. “You have the right people involved in the process.”
That will be little consolation to cities such as Las Vegas or Seattle, who are most often mentioned when there is talk of adding NBA clubs.
There was no indication of how many owners would be in favor of expansion, Silver said.
“There was no sense in the room that people were taking sides,” he said. “There was no straw poll. There was no requesting people to indicate pro or con in terms of expansion.”
“There was a consensus that quickly formed that the league office should do the work,” he said, adding: “The appetite in the room I would define more as curiosity.”
Prior work toward adding teams by the league was more “obvious data” about potential markets rather than the issues they must now confront, Silver said.
“The league office was tasked by our board with doing an in-depth analysis of all the issues around expansion, both economic and non-economic,” he said.
“Non-economic issues include dilution of talent, how it could potentially affect competition around the league if we were to expand, how you would stock those teams,” he said. “Economic issues ... they are very complex ... how you would potentially value the opportunity has a lot to do with your projections on the future growth of the league, as you are selling equity.”
“For every additional team you add, you are diluting the economics of the current league,” he added.
With NBA clubs selling recently for record sums, knowing what price to charge for buying into the NBA is an issue.
“Had we expanded five years ago, we would have underpriced the market,” Silver said. “Those are all things we’re in the process of talking about. A lot of analysis still needs to be done.”
“Nothing has been predetermined one way or another. And without any specific timeline. We also have this obligation to expand, if we do so, in a very deliberate fashion,” he said.
NBA owners received a presentation on starting an NBA-backed European league, not ruling out such a move with NBA expansion or vice versa, but talent dilution was again a concern.
“There’s an expansion of another kind which is the European opportunity,” Silver said. “It would be an independent league, what we’re contemplating operating in Europe, but the fact we would be creating new basketball teams in Europe is related.”
Silver said a concern for NBA team owners is a drop in local and regional television viewership, and the league would want to solve that matter before expanding.
“We would be malpracticing if we didn’t figure out how local and regional television is going to work before expanding,” he said.
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