Why expansion is tough sell to NBA
The NBA’s stance on expansion has been consistent throughout the ups and downs of Chris Hansen’s efforts to secure a team for Seattle – mostly a “no.”
It seems like such an easy solution to a complex and increasingly contentious problem: Why not let Sacramento keep the Kings and give Seattle an expansion franchise?
That way, each of the cities offering to pay what would be the most ever for an NBA team would go home happy, and the league would avoid making one city or the other potentially turn against its product forever.
But while the way the NBA has handled the Seattle/Sacramento battle has veered all over the map, with ever-changing deadlines and committee makeups, the league’s stance on expansion has been consistent throughout – it’s not on the table right now.
Commissioner David Stern and deputy commissioner Adam Silver – who takes over for Stern next Feb. 1 – have said on several occasions in the last few months that they just don’t think the time is right for expansion.
Slicing up the TV money
One of the main reasons is the NBA’s TV contract, which runs through the 2015-16 season. The teams get equal shares from it (the deal is worth $930 million), and adding a franchise would split that pie a little more.
“You get a lot of money in, and in return for that you cut the new team in for a large and growing source of revenue from national TV, national licensing, and all things international and digital,” Stern said in February.
An expansion team could mean a hefty one-time fee for the league – Charlotte, the last city to get an expansion team, paid $300 million in 2002. The NBA could theoretically ask the Seattle group to pay the $550 million it has valued the Kings at, giving each of the existing teams a nice, big check. But, that might be offset by the longer term of the total pie being split. (There is some thought that there could be an escalator clause in the contract should the NBA add a team, increasing the total value, but that has not been confirmed, nor how much it would be.)
Stern also mentioned the impact adding a team might have on the negotiations for the next TV deal.
Are the owners even talking about it?
Asked last month in New York if expansion had been discussed as a way out of the Seattle/Sacramento imbroglio, Stern said: “I haven’t heard that in any shape or form, particularly when we don’t know at this time what the next television network contract would be.”
Silver also mentioned the impact adding a team might have on diluting talent, though in an interesting exchange at the All-Star Game, that was quickly countered by Stern.
Said Silver: “Just to add to the competitive issue, too, whether there are 15 more of the world’s greatest players available without diluting the league. And we think we’re at the right point now in terms of numbers of teams and numbers of players. There are only so many of the world’s greatest players that can perform at the highest level.”
Countered Stern: “I disagree with that. I think it’s an unlimited number. But that’s a separate issue. As I said, you know that we’ve had 30 players from Africa in the last 20 years? Unthinkable 20 years ago, unthinkable. And we don’t know where the next ones are coming from.”
Other cities might want in, too
Sports law expert Michael McCann, who is also an on-air legal analyst for NBA TV, says another factor in the reluctance to solve this issue with expansion is the historical precedent of the expansion process itself.
The NBA has not really had true expansion since the 1995-96 season, when Vancouver (which has since moved to Memphis) and Toronto were added. The Charlotte Bobcats came aboard for the 2004-05 season solely as a replacement for the Charlotte Hornets, who had left for New Orleans two years earlier, and after an arena was approved.
McCann says for open expansion, the NBA would allow cities to bid. Going against that might not only run counter to NBA precedent but might also invite possible legal issues for the league.
“I think part of the reluctance on approving expansion now is that there would not have been a bidding process among potential cities for NBA teams,” McCann said. “Those cities would include, I believe, Seattle, Vancouver, Kansas City, St. Louis, Pittsburgh and Las Vegas. The league and Stern value process, and the league may want more economic data on the merits of each potential location before they commit to one of them.”
Stern has also mentioned two other negatives against expansion:
• That solving this issue by adding a team might set a bad precedent for similar city-vs.-city tangles in the future – the NBA wouldn’t want to just add a team every time something like this came up.
• Attempting to see how the league operates at its current number under the terms of the new collective bargaining agreement reached last season. “We’ve just come through an intriguing collective-bargaining negotiation and coupled it with specific revenue-sharing, over $200 million, I think the sentiment is to let it all settle and assess how we are doing and what the projections are for how we’ll do,” Stern said in February.
Sometimes mentioned as a factor, but one that few close to the process think really is, is the fact that the NBA has 30 teams and adding one would mean an uneven number.
The NBA actually has had an uneven number of teams on numerous occasions – in fact, it had an uneven number every year from the 1980-81 season to 2004-05, adding two teams each in 1988-89, 1989-90 and 1995-96.
Closed door?
Despite the NBA’s repeated statements that expansion is not on the table right now, rumors that it could be in the offing have persisted throughout this process. However, one league source said Friday there did not appear to be any substance at the moment to expansion rumblings when related to the Seattle/Sacramento issue.
Stern himself seemed to leave the door just slightly ajar that expansion could happen at some point when asked after the April 19 Board of Governors meeting if expansion was “a complete non-starter.”
“I don’t want to say a ‘complete non-starter,’ ” he said. But just as quickly as he opened the door, Stern shut it. “If the question is: Was there any discussion of expansion? The answer is no.”