The NBA has distinguished itself as “the most investor-friendly league in North American pro sports,” according to forensic accounting expert Jesse Silvertown, as the basketball world witnesses an unprecedented wave of franchise transactions. Nearly 25 percent of NBA franchises have changed hands since 2020, with three teams in the Boston Celtics, Los Angeles Lakers, and Portland Trail Blazers announcing sales this year alone at a collective valuation exceeding $20 billion.
Silvertown, principal at forensic accounting firm Hesperus, tells Front Office Sports the NBA’s investor-friendly environment stems from a higher cap on private capital, limited labor strife, and a lucrative long-term media-rights deal. These factors have positioned the league ahead of the NFL and MLB in facilitating ownership transitions.
The league’s $77 billion media-rights deal with ESPN, NBC, and Amazon represents a 220% increase from the prior agreement. This financial windfall has driven franchise valuations to historic levels, creating optimal conditions for legacy owners to exit.
“My guess is that this is the start of a trend,” Tripp Crews of business valuation firm Mercer Capital tells FOS. “The combination of soaring valuations and private equity gaining access to this new class of assets should create more of these transactions in the future.”
The NBA formalized private equity investment pathways in January 2021, allowing single PE funds to hold up to 20% stakes in as many as five teams. Major firms like Sixth Street, Dyal HomeCourt Partners, and Arctos Partners now hold stakes across multiple franchises.
Most recent sales have been driven by aging owners, estate planning, or scandals, Silvertown notes. The sellers this year include owners in their mid-60s, while new buyers like Marc Lore, Alex Rodriguez, and Tom Dundon range from 50 to 56 years old.
The league has seen 23 change-of-control sales since 2010, a dramatic increase from the 1990s when such transactions were rare and significantly less expensive.
“Economically, the choices are to become a real estate company around a new or updated arena, bring in PE money-which many who have not sold are doing-or both,” Mark Cuban tells FOS.