The announced finalization of the NBA’s $76 billion, 11-year national media rights deals with ESPN, Amazon and NBC cleared the league’s last stated hurdle before announcing an expansion process that is expected to revive the Sonics.
Last year, NBA Commissioner Adam Silver hinted that the league would consider expanding its two-team base once the nine-year, $24 billion contract negotiated a decade ago expires and is replaced. The new deal, for nearly three times the previous annual amount, gives the league’s 30 team owners a fuller picture of the revenue pie that will be split between two additional expansion franchises.
Seattle and Las Vegas are considered the most promising cities to host clubs. The timing of the expansion process remains uncertain.
“There’s been talk about a return to Seattle, potentially,” Silver said in an interview with NBC Sports Boston last month. “Las Vegas, without a doubt, is very interested in a team. Mexico City one day.
“But there are a lot of other American and Canadian cities, frankly, that have contacted us and said they would be interested.”
Seattle and Las Vegas remain the favorites, thanks in part to the involvement of Tim Leiweke, a longtime Silver and NBA associate who co-founded the Los Angeles-based Oak View Group (OVG). It was Leiweke’s company that transformed KeyArena into what is now Climate Pledge Arena for $1.15 billion, including $50 million in exclusive NBA improvements that the league was privy to.
Leiweke, brother of Kraken CEO Tod Leiweke, is also leading a $10 billion private development project on 66 acres three miles south of the Las Vegas Strip that would include hotels, gaming and a 20,000-seat NBA arena.
That project has yet to come to fruition and faced competition last month from a group planning an NBA-sized arena on the Las Vegas Strip, led by real estate developer LVXP. LeBron James and Shaquille O’Neal have expressed interest in owning a team in Las Vegas.
Now that NBA owners know they’re guaranteed $6.9 billion a year from national television alone, they can set an expansion fee. The fee, expected to top $4 billion, would generate immediate cash for each of the 30 teams that wouldn’t be subject to player revenue sharing. That would allow owners to offset pandemic-related deficits and future loss of broadcast revenue from the new TV package, since they’d have to share it among 32 teams instead of 30.
Leagues also have to decide on the schedule: whether to add two franchises at once or to stagger them. While leagues prefer to expand in pairs to balance conferences and schedules, some potential cities, such as Seattle, have arenas already built, while Las Vegas and others do not.
Seattle’s bid for a team that would revive the Sonics’ traditional name, logo and colors would be led by the family of Kraken majority owner David Bonderman, primarily through his daughter, Kraken co-owner Samantha Holloway.
“I think the Kraken is a new brand and it’s incredibly important to this city and our family. We need to grow that brand and make everybody here a hockey fan,” Holloway said in a December 2022 interview, after he and Bonderman assumed equal control of the Kraken. “On another level, we think this city also needs a basketball team — or an NBA team, because they already have a great WNBA team. And our family is willing to work to make that a reality, because we built the arena to be able to do that as well.”
Two months ago, Holloway told season-ticket holders that the NHL team was creating a separate company that would serve as “an umbrella brand that will oversee the Kraken brand and prepare for other major opportunities.” A team spokesperson said the company’s primary focus for now will be overseeing projects such as the Kraken’s $150 million Memorial Stadium renovation and Tim Leiweke’s OVG.
The spokesperson added: “When the (NBA) commissioner (Adam Silver) is ready, this ownership group will be ready, but they will be careful not to get ahead of that process.”
The timing of the parent company and the resolution of the NBA’s television broadcast negotiations does not appear to be a coincidence. Holloway promised that more information about the company would be released in mid-summer, about the expected timeline for announcing finalized television deals and the league’s move toward expansion.
Another step toward preparing a bid to Seattle was the need for Holloway’s father to divest his minority stake in the Boston Celtics, as NBA bylaws prohibit owning two teams at once. That also appears imminent after the Celtics announced last month that Boston Basketball Partners LLC, the team’s ownership group of which Bonderman is a part, has put the franchise up for sale.
Managing partner Wyc Grousbeck said this week that 51% will be sold fairly soon and another 49% by 2028.
Bonderman won’t be the only one looking to buy a Seattle expansion team, especially since the price tag is expected to exceed $4 billion. Forbes recently estimated the average price of an NBA team at $3.85 billion, but the magazine’s valuations often fall short of teams’ actual prices.
A decade ago, expansion teams were expected to sell for $1 billion to $2 billion at most. The NBA’s latest television deal and its lucrative revenues, along with the increased sponsorship opportunities generated by new, state-of-the-art arenas, have pushed sales prices to record levels: the Phoenix Suns fetched $4 billion in 2022 and the Milwaukee Bucks fetched $3.5 billion last year.
Bonderman, chairman and founding partner of private equity group TPG, is worth $6.2 billion, according to Forbes. Unless he’s willing to spend two-thirds of that on a basketball team, he’ll need help from his partners.
Beyond the financial aspects, there will also be public relations benefits from involving local owners such as the Ackerley Sports Group, which hails from the family that ran more successful versions of the old Sonics teams and counts brothers Ted and Chris Ackerley among the Kraken’s current local owners. The brothers formed the sports company last year and this year made their first investment in British football club Leeds United, becoming owners and partners.
Their father, Barry Ackerley, owned the Sonics for 18 years while he and his wife, Ginger, founded the WNBA’s Storm.
Another Kraken owner expected to be part of any ownership group led by Bonderman would be Amazon CEO Andy Jassy, whose reported net worth is just north of $500 million.
Hollywood producer Jerry Bruckheimer, who led the Kraken’s expansion alongside Bonderman and remains an owner of the team, also expressed interest in owning a Sonics team in a February 2018 interview.
“I love sports, period,” said Bruckheimer, who reportedly became a billionaire in 2019. “And I would be involved in anything we could do in that space. Because we’re very excited about the design perspectives and the fan experience that could be offered for both sports.”
There are also a handful of former Sonics stars that the Kraken owners are reportedly keen to court as minority investors, with Gary Payton leading the list.
Former Storm star Sue Bird is another possibility, having already invested as a minority partner in the WNBA team. Payton and Bird are featured prominently in fan billboards at Kraken games. Former Seahawks star Marshawn Lynch is already a minority investor in the Kraken and has been making increasingly frequent public appearances on behalf of the team.