NBA Europe bids fall short of $500m mark for some city franchises
Some of the 12 permanent franchises in the NBA’s planned European basketball league have not yet attracted bids in excess of $500m, the mooted base price for teams.
The latest round of bidding from seasoned sport owners, institutional investors and existing football and basketball clubs closed on Monday, with the most sought-after locations – believed to be London and Paris – said to have attracted offers of more than $1bn.
It is also understood that there were multiple bids for each franchise location, including Berlin, Munich, Milan and Rome, but that, contrary to some reports, not every team drew offers above the $500m mark – widely touted as the minimum entry price for NBA Europe, which is due to launch next year.
The NBA could yet achieve that price tag for the less popular franchises, however, as the teams are set to be sold one-by-one, allowing unsuccessful bidders to offer on other teams and creating competition that drives up the price.
NBA commissioner Adam Silver has sought to sell the opportunity by dubbing it a “once in forever opportunity” for investors. The Raine Group, one of its advisors, used a similar auction strategy in the sale of The Hundred teams which banked English cricket £520m last year.
Entry price is one of the main hurdles the NBA needs to clear to move ahead with its plans, and in particular with existing European basketball powerhouses such as Real Madrid and Barcelona, who are said to believe the NBA needs them more than they need it.
NBA and EuroLeague pushing competing visions
EuroLeague, the incumbent competition which features the Spanish giants and well-supported teams from Greece, Turkey and Balkans, has signed its teams up to new 10-year contracts after pledging to raise and share €3bn in new investment with them.
The NBA wants Real Madrid, Barca and others to defect and is understood to see their EuroLeague contracts as, effectively, rolling one-year deals which allow them to leave for a €10m penalty. EuroLeague believes the teams would also have to pay compensation that would take the sum to nearer €100m.
Talks between the NBA and EuroLeague are yet to make any meaningful progress but are set to continue this month.
Bidders have been told that NBA Europe will distribute more than €10bn to teams in its first decade, and that all franchises will break even by year three. Further details of the mechanisms for this have not been made public.
“We’re extremely encouraged by the final bids we received for permanent franchises in a new NBA and Fiba-backed league in Europe, which reflect the tremendous interest and momentum around this project,” said NBA deputy commissioner Mark Tatum.
“This will be the biggest influx of capital European basketball has ever seen, and we have clear frontrunners in each of our 12 target cities including many existing basketball and football clubs. We will now work with the NBA and Fiba Boards to finalize the long-form agreements.”