NBA Franchise Net Revenue Lag Behind Soaring Valuations
Editor
NBA Franchise Net Revenue Lag Behind Soaring Valuations League and ownership sources do not expect the recent surge in NBA franchise valuations to slow down anytime soon, suggesting the wave of team sales and ownership changes could continue at a similar pace going forward. The Los Angeles Lakers, Minnesota Timberwolves, Boston Celtics and Portland Trail Blazers have each been sold since the start of 2025.
"In any business where valuations rise at that level, there will be people who are attracted to the price and return," said one ownership source.
Sources described a challenging financial reality facing many franchise owners despite soaring valuations. One ownership source in a smaller market characterized the disconnect between a team's valuation on paper and its actual profitability.
"The problem with owning a team is you have something that's worth an [expletive], and you don't understand why it is, and it makes you little to no money all the time," said one source. "And you've got to spend money, because if you don't spend, the fans won't come."
The Lakers highlight the complicated math involved in team ownership. One source told The Ringer that the Lakers' recent $12.5 billion valuation amounts to a price roughly 125 times the team's approximate $100 million in annual profit, a return of less than 1 percent.
"You could put it in treasury bills and make 5 percent," the source said.
While not referenced by The Ringer, sports owners significantly benefit from writing off the contracts of players as depreciating assets.
Profit margins are considerably tighter in smaller NBA markets, according to ownership sources. Under the league's collective bargaining agreement, 51 percent of all basketball-related income is allocated to players. In some markets, sources said, the dollar amount spent on player salaries to meet that threshold actually exceeds 51 percent of the team's total revenue.
Mark Cuban, who sold his controlling stake in the Dallas Mavericks in 2023 at a $3.5 billion valuation, said the day-to-day experience of NBA ownership has shifted dramatically as valuations have climbed.
"Running a team is a completely different beast now," said Cuban. "Like I told Adam when I sold, the board of governors meetings went from being all about basketball and me bitching about the officiating to everything being about team valuations. It's just different than it was. When I came in, it was like: All I care about is winning."
League and ownership sources do not expect the recent surge in NBA franchise valuations to slow down anytime soon, suggesting the wave of team sales and ownership changes could continue at a similar pace going forward. The Los Angeles Lakers, Minnesota Timberwolves, Boston Celtics and Portland Trail Blazers have each been sold since the start of 2025.
“In any business where valuations rise at that level, there will be people who are attracted to the price and return,” said one ownership source.
Sources described a challenging financial reality facing many franchise owners despite soaring valuations. One ownership source in a smaller market characterized the disconnect between a team’s valuation on paper and its actual profitability.
“The problem with owning a team is you have something that’s worth an [expletive], and you don’t understand why it is, and it makes you little to no money all the time,” said one source. “And you’ve got to spend money, because if you don’t spend, the fans won’t come.”
The Lakers highlight the complicated math involved in team ownership. One source told The Ringer that the Lakers’ recent $12.5 billion valuation amounts to a price roughly 125 times the team’s approximate $100 million in annual profit, a return of less than 1 percent.
“You could put it in treasury bills and make 5 percent,” the source said.
While not referenced by The Ringer, sports owners significantly benefit from writing off the contracts of players as depreciating assets.
Profit margins are considerably tighter in smaller NBA markets, according to ownership sources. Under the league’s collective bargaining agreement, 51 percent of all basketball-related income is allocated to players. In some markets, sources said, the dollar amount spent on player salaries to meet that threshold actually exceeds 51 percent of the team’s total revenue.
Mark Cuban, who sold his controlling stake in the Dallas Mavericks in 2023 at a $3.5 billion valuation, said the day-to-day experience of NBA ownership has shifted dramatically as valuations have climbed.
“Running a team is a completely different beast now,” said Cuban. “Like I told Adam when I sold, the board of governors meetings went from being all about basketball and me bitching about the officiating to everything being about team valuations. It’s just different than it was. When I came in, it was like: All I care about is winning.”
