Remember back in October 2018, when the Warriors and Kings played an exhibition game at a sold-out and frenzied KeyArena? It was the latest NBA tease for a city that has had a huge sporting void ever since the Sonics left in 2008.
“The NBA is back in Seattle for tonight, but hopefully it’s back forever soon,” ex-Sonic Kevin Durant told the crowd when he took the mike just before tipoff.
That yearning has continued unabated — and unrequited. But now, a happy ending to this 12-year quest has never seemed more realistic. Or at least not since 2013, when the NBA voted down the Sacramento Kings’ proposed relocation to Seattle, with then-commissioner David Stern greasing the way for Chris Hansen’s purchase bid to fail.
Since then there have been rumblings here and there of teams vulnerable to a move. And there have been whispers of expansion in the offing, always shot down by Stern’s successor, Adam Silver. The timing is not right, he would say, shooting down the welling excitement before it had time to even take hold, though without Stern’s animus toward Seattle.
But now, it appears, the NBA is finally willing to take a legitimate, serious look at expansion. And for Seattle, that’s a genuine cause for excitement, because there’s not a soul associated with the NBA — directly, peripherally or from the outside looking in — who doesn’t believe that once the decision is made to move forward with expansion, that Seattle won’t be at the head of the list.
So that’s why Silver’s comments Monday in his annual preseason news conference, that the league has started to “dust off” analyses of the economic and competitive impacts of expansion, resonated so deeply here. And why his phrasing — “I think I’ve always said that it’s sort of the manifest destiny of the league that you expand at some point” — couldn’t help but set off metaphorical fireworks among the Sonics faithful.
Silver doused a little bit of the enthusiasm by saying the league is
“certainly not to the point that expansion is on the front burner.” But the fact that it’s on a burner at all is huge news.
And what makes this more than just idle chatter is the coronavirus pandemic that has wreaked havoc on the finances of the league. Silver also said that having no or limited fans for the upcoming season could cut revenues by 40%. Considering that leaguewide losses have already been pegged at $1 billion coming off the disrupted 2019-20 season, even the billionaire owners could well be feeling the pinch.
And there’s no better way for a league to get a rapid influx of cash than to expand. The league’s last expansion came in 2004, when it launched the Charlotte Bobcats (now Hornets). The expansion fee of $300 million back then seems quaint, if not laughably low, less than two decades later.
By all accounts, the starting point for the next expansion fee will be $1 billion. In 2017 an unnamed owner told The Athletic’s David Aldridge the number would be $2 billion. And last week, on The Bill Simmons Podcast, Dallas Mavericks owner Mark Cuban tossed out the number $3 billion.
Divide that 30 ways, and it’s a quick $100 million payout in the coffers of all 30 existing NBA clubs. That would get you through a lot of COVID-19 economic hardship.
Remember, there are reasons the league has resisted expanding. Probably the biggest is that the new teams start sharing in the revenue, which shrinks the pie. Silver also is concerned that the competitive balance of the league, already an issue in this era of “super teams,” would get even more pronounced with two new teams. Also, Seattle and other potential new markets, such as Las Vegas, have served the league well as a built-in relocation threat for any franchise having issues with the viability of its arena.
But with another tough year impending, the financial lure of expansion is going to get stronger. It was telling that Cuban, who has long been a foe of expansion — he was the only owner to vote against the Charlotte expansion — now says he’s for it. He added on the Simmons podcast, “I don’t think it’s the right time for it yet, because you couldn’t get momentum in those places. But there will come a time where it will be discussed.”
Here’s Cuban explaining to Simmons why he voted against the Charlotte expansion: “The $300 million we took as an expansion fee, now all of a sudden Charlotte gets one-30th of all of the shared revenue, right? If that was $30 million, just to pick a number out of the air, and they’re getting $30 million every year, well, in 10 years they get all their money back, right? So all it was was a loan to us. I tried to explain that to some of the old-school owners who were involved, and it just didn’t resonate with them. They just didn’t understand it. And now that $300 million looks like the bargain of all time.”
Then Cuban threw out the $3 billion number to Simmons as a possible expansion fee, and worked out the new math: “Well, they’ll get 1/31st of whatever income we have coming in. Let’s just say that’s $50 million. OK, is it worth it to take a $3 billion loan that we have to pay back over 60 years, right? Three billion divided by 50 million.
“OK, maybe you can make that argument that it is. But it always comes down to, is there some incremental value? Like, having somebody in Vegas, having a team in Seattle, as an example. Will we increase the pie big enough to more than compensate the money that we’re giving them?
“ … I’m not saying it’s not possible. I kind of like the idea at a lot of levels, because I think Seattle would add incremental value in different ways.”
If perpetual iconoclast Mark Cuban is on board, this idea has legs. He believes it makes particular sense as the league transitions from what he calls “traditional linear TV” to streaming and direct-to-consumer models.
And what makes Seattle so viable now is that we suddenly have a state-of-the-art arena that, as Times reporter Geoff Baker detailed on Wednesday, has been designed specifically with the NBA in mind. While the perceived deficiencies of KeyArena led to the Sonics’ departure, its opulent replacement, Climate Pledge Arena — built for hockey, but up to code for the NBA — could clinch their return.
Is there a potential owner willing to pony up $2 billion, or even $3 billion? Seattle is not short in the billionaire department, although the biggest whale of them all, Amazon’s Jeff Bezos, has not yet shown himself to be much of a sports guy. But the beauty of Tim Leiweke and the Oak View Group that is building the new arena is that they have nationwide business connections.
That’s evident in the diverse list of owners of the NHL team that will occupy the new building, along with the WNBA’s Storm. And their connections are deeply tied to the NBA as well. They could no doubt find interested parties, if they haven’t already lined them up.
Yes, NBA expansion is still on the back burner. But it’s not hard to imagine a day in the future — suddenly not so distant — when it will start boiling. And you can almost taste the feast.