The NBA wants teams to be owned by individuals rather than sovereign wealth funds, but NBA Commissioner Adam Silver didn’t rule out that possibility when speaking at the Associated Press sports editors convention on Monday.
“I don’t want to say what could ever happen, but right now there’s no contemplation,” Silver said. “I mean it’s very important to us, apart from sovereign wealth funds, that individuals are able to control our teams, have responsibilities to the fans, have responsibilities to their partners and the players.”
“It is very important to us that there is a person.” [in charge], independent of sovereign wealth funds. I think that’s about the connection to the community, the connection to the players and their other partners in the league.”
Currently, the NBA prohibits sovereign wealth funds from owning more than 5 percent of franchises, and Silver said the league has no plans to change that policy “anytime soon.” Additionally, the NBA also requires controlling owners to own at least 15 percent of a club, meaning sovereign wealth funds currently have no way of governing a league team.
Silver was asked about the issue in connection with LIV Golf’s controversial merger with the PGA Tour, which critics see as Saudi Arabia’s latest attempt to whitewash its human rights record. Earlier, the country had acquired control of English football club Newcastle United through its Public Investment Fund (PIF), which was headed by fund governor Yasir Al-Rumayyan, who also negotiated the LIV-PGA merger.
Currently, NBA Commissioner Adam Silver (left) bans foreign investment funds like the PIF from owning more than 5 percent of teams. (right) Newcastle Chairman Yasir Al-Rumayyan of the PIF
LIV golf star Phil Mickelson (left) and Saudi PIF Governor Yasir Al-Rumayyan (right)
The merger has drawn the attention of the US Senate, which now plans to question several PGA officials during a subcommittee hearing Tuesday morning.
“A regime that has killed journalists, jailed and tortured dissidents, sponsored the war in Yemen and supported other terrorist activities, including 9/11.” “It’s called sportswashing,” said Sen. Richard Blumenthal (Democrat – Connecticut).
“It’s also about hypocrisy and how large sums of money can trick individuals and institutions into betraying their own values and supporters, or perhaps revealing a lack of values from the start.” could fall – if those in charge allow it to be all about the money.”
Meanwhile, Qatar’s sovereign wealth fund is buying a 5 percent stake in the company that owns the NBA’s Washington Wizards, the WNBA’s Mystics and the NHL’s Capitals.
Saudi Arabia or Qatar have not reported any interest in buying an NBA franchise, although such an opportunity could arise in the near future if the league decides to expand.
The NBA is in the process of finalizing new media rights deals after entering into a new employment contract. However, Silver said he expects the league to consider expansion in the near future.
“Once these media deals are in place, we will move on to expansion,” Silver said. “It’s not a sure thing.” But like I said before, I think it’s natural for organizations to grow over time. There is no doubt that the interest in this (Las Vegas) market is enormous.”
There is also strong support for the return to Seattle of an NBA team that lost the SuperSonics to Oklahoma City in 2008.
Should NBA franchises become available, the league’s price is likely to be high given recent sales of the Milwaukee Bucks and Phoenix Suns for $3.5 billion and $4 billion, respectively.
Silver acknowledges that few individuals can afford such a price, and the league has previously lifted restrictions on private equity firms buying shares in teams.
Senator Richard Blumenthal (Democrat – Connecticut) is reviewing the LIV-PGA merger
Phoenix Suns new owner Mat Ishbia recently bought the club for $4 billion
“Part of the reason we’ve opened up investment opportunities to private equity firms and sovereign wealth funds is because, frankly, we’re running out of people who are able to write those checks, and especially when.” not be the controller of the team,” Silver said.
“Interestingly, these funds are making financial investments in these teams,” he said. “In my opinion, the investment community is just following this trend and saying this is a real growth opportunity.”
Silver described himself as “optimistic” about the opportunity the NBA offers to potential team owners and dismissed claims that franchise valuations were inflated. In response, Silver pointed to the league’s revenue — which hit $10 billion in 2021-22 — and argued that the franchise pricing wasn’t the result of a bubble in professional sports.
“I think a bubble would be indicative of some kind of irrational valuations,” Silver said. “I think if you look at the revenue, at least in the NBA’s case, that’s being generated by the league, the growth opportunities, the global market that we’re addressing here, and maybe because of that, there are certain unique aspects of the NBA that are like global.” our league is.
“I don’t think there’s anything irrational at all.” Part of the reason we’ve opened up investment opportunities to private equity firms and sovereign wealth funds is because, frankly, we’re running out of people who are able to make them Writing checks, and especially when you are “Won’t be the controlling person of the team.”