Las Vegas, Seattle NBA Expansion Fees May Soar As Team Values Climb

On Sunday, Bill Simmons said on his podcast that Amazon founder Jeff Bezos may explore a purchase of the Celtics, who were put on the market by owner Wyc Grousbeck and his partners last month.

According to The Information, Bezos “has no plans” to bid on the Celtics. However, lost in Simmons’s report was the price tag that the league hopes the iconic franchise will fetch, whether from the billionaire Bezos or any prospective buyer.

“The league wants $6 billion for the Celtics. Six billion dollars, [and] they don’t own their arena. It’s a crazy price, but they’re probably going to get it,” Simmons said.

Simmons added that the NBA is hoping for the sale price to hit $6 billion so it becomes the new benchmark for expansion fees. Commissioner Adam Silver has made it no secret that the league is moving toward expansion for the first time since 2004, with the prospective markets being Las Vegas and Seattle.

Bloomberg reported last month that expansion fees could be somewhere between $4 billion and $5 billion—and that’s without considering the cost of building a new arena. That fee is in line with the price tags of the three NBA teams sold last year—$3.5 billion for the Mavericks, $3 billion for the Hornets, and a league-record $4 billion for the Suns—but Simmons’s prediction for the Celtics would significantly overshoot those prices.

To the Moon

Regardless of whether Simmons’s prediction comes true, the sale of the Celtics will likely surpass the Suns’ as the largest in NBA history, as long as it comes close to their October 2023 valuation of $4.7 billion, according to Forbes. 

Franchises often overshoot their valuation when they are sold, such as the Suns who were valued at less than 70% of its eventual sale price. However, the opposite does happen, like when Mark Cuban sold the Mavericks to the Adelson family at a valuation that was around 77% of its estimated value.

Team valuations surged after the current media-rights deal began in 2016, and the prices of the sales over the past few years indicated an expectation that there would be another bump.

Some teams have also become more valuable by building and operating their own arenas. In 2010, Joe Lacob purchased the Warriors for $450 million, which was $100 million less than what Ted Leonsis paid for the Wizards. However, the Leonsis purchase included the team’s arena. The Warriors are now recognized as one of the most valuable teams in all of sports, largely due to their on-court success over the last decade, but also thanks to their decision to move to the Chase Center in 2019.