Anyone who follows the NBA rumor mill knows that league expansion is a topic that just won’t go away. There has been speculation that the league is interested in expanding from 30 to 32 teams, with Las Vegas and Seattle being the two cities mentioned as the leading candidates to land a new franchise.
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Not long ago, it seemed that expansion was inevitable, but that idea has cooled recently as commissioner Adam Silver has expressed an interest in creating a league in Europe to expand the NBA’s global brand. That doesn’t necessarily mean that expansion stateside is off the table, though.
Former Dallas Mavericks owner Mark Cuban believes expansion is going to be a hard sell for a couple of reasons, as he recently told the DLLS Mavs podcast. In his opinion, the math just doesn’t work for the teams or the players.
“One, the expansion fees just alone — you loan me let’s say $6 billion, and to pay back that loan, I give you 1/31,” Cuban said. “There are 30 teams now, so there’ll be 31. I get 1/31 of the TV money. And then it’s only a question of how long it takes.”
Cuban reasoned that the expansion ownership group would eventually recoup their costs just from the TV money alone, after which they’d be cutting into the profits of the other owners. “Why split up the pie any further?” he wondered.
He also isn’t sure the player’s union would be on board with effectively lowering each player’s potential max salary just to create 15 more roster spots on a new team. “When you calculate the CBA, and when you calculate the cap, now you’re divided by 32 teams,” he explained (now assuming two expansion teams).
“Now if the cap is $170 million but basketball-related income hasn’t really increased by the team that you added, so now if it’s one or two teams, you’re reducing the cap. So literally in a second apron era, the cap goes down and the second apron goes down, and teams are f*****, you know? It just doesn’t work.”
Teams are already struggling with how to navigate the second apron, as the current cap rules make it more difficult than ever to keep a strong team together. Going into the luxury tax becomes more punitive every year a team does it, so if, like Cuban says, that number is reduced because of an added team or two, players will lose out because teams will have to offer them lower contracts to stay compliant.
Even when taking into account that the NBA recently signed a record-setting 11-year deal for its upcoming media rights with a variety of partners (including newcomers NBC and Amazon), NBA owners wouldn’t be wise to accept a short-term windfall from expansion fees unless they also believed that adding teams would also increase the league’s overall revenue, preventing them from losing money long-term.
Expansion is a tricky question to tackle, not only for financial reasons, but competitive ones, also. If Las Vegas and Seattle both became expansion sites, they’d have to go in the West, which would necessitate a corresponding move of one team to the East. How would the league determine which team should move? Would it go strictly by geography, or would there be any wiggle room to find the best fit?
Adam Silver has a lot on his plate as it is, but this will be one of the biggest dilemmas he faces as NBA commissioner.
