Storyline: NBA Expansion

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The NHL confirmed what had been rumored for months at its Board of Governors meeting — Seattle is a definite target for hockey, which has 31 teams and needs a 32nd to balance out both its conferences and its schedules. The NHL will allow members of the Oak View Group, which successfully lobbied the Seattle City Council to approve its plan to spend $660 million to renovate both the Arena and the nearby Seattle Center, to begin a season ticket drive for the potential expansion team. Hockey’s timetable for expansion is thus clearly and substantially ahead of the NBA’s.

Though NBA Commissioner Adam Silver said earlier this year that he believes expansion is “inevitable,” there is no indication among league owners and other sources that there’s any current appetite among NBA owners to add one or two new teams. The obvious reason why is there is no appetite among them to further split the $24 billion from the new national TV deal, which runs through 2024. (As ever, in the interests of full disclosure: Turner Sports, one of the NBA’s national television partners along with ESPN/ABC, runs NBA.com.) “I don’t see expansion,” one owner said this weekend. “A move is the only way.”

However, longtime Seattle sport columnist Art Thiel wrote last week that a source “with knowledge of the league’s long-range thinking” believes the NBA could expand when the current TV deal expires, meaning 2025 at the absolute earliest. Several owners told me a few weeks ago: that while there is strong support for Seattle, there’s just no desire to expand. Thiel’s source said that Seattle and Mexico City were the two current favorites among owners, and the league has done nothing to dissuade the idea that it’s zeroed in on Mexico City as a potential expansion target.

But another said Sunday that talk of adding anyone to the current 30-team mix is premature. Owners remain unenthusiastic when there are still several teams who are losing money in their current markets, even with significant increases in revenues, a new Collective Bargaining Agreement that ensures labor peace through at least 2023 (2024 if neither the players nor owners opt out) and enhanced revenue sharing. “We haven’t discussed expansion,” the owner said. “However, Seattle is a market that I believe the majority of owners would want to be in.”

Establishing a G League franchise on Mexican soil would be the latest serious step by the N.B.A. to gain a foothold in Mexico and gauge the viability of putting an N.B.A. team in the largest market in Latin America. While stressing that his league is not actively pursuing expansion or relocation for any of its 30 current franchises, Commissioner Adam Silver has described Mexico City as a natural contender for an eventual N.B.A. team on numerous occasions this year.
3 months ago via ESPN

At least one owner raised the idea of expansion in a recent Board of Governors session, citing the massive expansion fee the 30 current teams would split, sources say. The concept of an expansion fee of potentially more than $1 billion can be tempting because it is not subject to splitting 50/50 with the players. Adam Silver, the league’s commissioner, has repeatedly said the league has no short-term plans to expand, though he labeled expansion at some point “inevitable” during a recent interview in The Players Tribune.

Silver was reluctant to put a specific timeline on potential expansion for the NBA or Seattle, but said it was inevitable. Via The Players’ Tribune: I think it’s just a question of when the right time is to seriously start thinking about expansion. Think about the state we’re in the league right now where [it is] amazing to me that, coming off of these Finals, you have some fans saying, “There’s only one good team in the league” And I’m thinking, well, if people really believe that even though we have 450 of the best players in the world, and 450 players can only form one really good team, probably doesn’t make sense to expand in terms of dilution of talent. Now I don’t really believe that, and I think these things correct themselves. And I don’t want to put a precise timeline on it, but it’s inevitable at some point we’ll start looking at growth of franchises, that’s always been the case in this league, and Seattle will no doubt be on a short list of cities we’ll look at.

Adam Silver: “And I’m thinking, well, if people really believe that even though we have 450 of the best players in the world, and 450 players can only form one really good team, probably doesn’t make sense to expand in terms of dilution of talent. Now I don’t really believe that, and I think these things correct themselves. And I don’t want to put a precise timeline on it, but it’s inevitable at some point we’ll start looking at growth of franchises, that’s always been the case in this league, and Seattle will no doubt be on a short list of cities we’ll look at.”

Three separate groups of investors who are interested in financing a professional basketball franchise based in Louisville are reportedly expressing a willingness to help pay to bring Freedom Hall up to NBA standards. That cost may be around $150 million, said Jason Rittenberry, president and CEO of Kentucky Venues, the newly rebranded Kentucky State Fair Board. It oversees the state-owned, 60-year-old Freedom Hall situated in the center of the Kentucky Exposition Center.

Investor Chris Hansen stressed patience and optimism Thursday in his ongoing effort to build an arena to house a possible NBA or NHL franchise in Seattle’s stadium district. Hansen’s interview with The Associated Press represented his first public comments in nearly two years about the efforts. Hansen acknowledged his investment group was surprised by the City Council’s decision last May to deny a proposed street closure that would have moved the project forward with some public investment.

Economists have said it would cost at least $1 billion for an individual or groups of investors to buy an NBA franchise. Those experts also said that the KFC Yum! Center’s lease agreement — which has the University of Louisville as the main tenant — would be another obstacle. Daniel Bauer, director of Bellarmine University’s Sports Administration program, said it would cost more than $300 million to convert Freedom Hall out at the Fairground into an NBA-caliber facility.

Lunsford said that he’d heard rumblings recently about local interest in an NBA team, but he’s heard nothing credible about serious investors. Only a handful of people could handle the price tag. More than that, it would be difficult to make a case for Louisville having the per capita income and size to sustain a franchise. “This is not a game for anybody with short pants,” Lunsford said. “It would take the kind of” cash that only a few in town have – the likes of Papa John Schnatter or W. Kent Taylor, who founded Texas Roadhouse.

Louisville Metro Councilman Dan Johnson submitted a revised version of his NBA resolution on Thursday after fellow members and other groups abandoned the initial proposal because it was based on anonymous sources. The new measure says Louisville has a longstanding love affair with basketball that would greatly benefit from a professional franchise. Johnson’s original proposal had said the league was preparing to proceed with expansion based on unnamed sources.

Despite assurances from the National Basketball Association that there are no plans to expand or relocate to Louisville, a Metro Council resolution filed Monday claims the professional basketball league is preparing to do so. Councilman Dan Johnson sponsored the non-binding measure, which says the city has KFC Yum! Center is able to accommodate a franchise and that residents would welcome such a decision. Johnson’s proposal also says the NBA “has indicated they are prepared to proceed with expansion teams.”

To the extent that a Louisville franchise would encroach on the territory of the Indiana Pacers and their league-approved 150-mile marketing radius, that risk might seem excessive to Herbert Simon, the NBA’s longest-tenured owner. An NBA source said Thursday that Simon would surely fight expansion in Louisville or Cincinnati, and that his influence on his fellow owners could be hard to overcome. A Pacers spokesman referred questions along those lines to the league.

Benton Strong, a spokesman for Murray, emphatically denied a widely circulated online basketball website posting Monday that stated Murray had been “ducking” calls from NBA Commissioner Adam Silver over much of the past year. “There is absolutely no truth to that whatsoever,’’ said Strong, who, with Murray, was en route to a mayors’ conference in Washington, D.C. when informed of the post. “If anything, we are trying to get together on a call with both commissioners to keep the lines of communication open.’’

For example, the Memphis Grizzlies were a tremendous money loser up until a few years ago. They were not alone. Most insiders that talk about this topic say it takes a franchise roughly ten years to really get on solid footing in a new market, and neither the new labor deal or the current TV deal will be around in ten years. Many of the more frugal owners understand that taking in an expansion fee, even one that could cross the billion-dollar mark, is basically a loan against future earnings. That does not mean there are not some owners that would have interest in a cash infusion while the game is growing and revenue is pouring in. Expansion fees would be divided among the current owners, so a billion-dollar fee would equate to more than $33 million to each owner. That’s not an insignificant number.

“In terms of a franchise in Mexico City, it’s something that we’re going to look at,” Silver said. “This is a competitive market, well over 20 million people. While we have no immediate plans to expand the NBA, one of the things that we look at is whether expanding would be additive to the league as a whole. Clearly coming to Mexico City just because of the huge population here in Mexico but in essence as a gateway to the rest of Latin America could potentially be very important to the league. You clearly have a beautiful state-of-the-art arena here, and you can tell by ticket sales that we have the interest. So that’s something that we will continue to look at.”

Silver mentioned that one of the most important factors in bringing the NBA abroad is whether the host city’s venue can support the teams. Silver pointed to Arena Monterrey in Monterrey, Mexico as being a “state-of-the-art facility” that could host a D-League team in the future. Raul Zarraga, managing director of NBA Mexico said Thursday that it’s time for the country to start developing NBA-caliber players and the league needs “to work more closely with local authorities to see how we can grow the basketball professionally to find new players that in the future can play in the NBA. Silver agreed, saying the plan now is to start an NBA development academy in Mexico.

For Seattle, the only realistic choice is expansion. The reasons for not expanding now are varied, and logical. There’s no reason for owners to split an exploding financial pie further. The NBA is in a boom period, with market size not nearly as important as it used to be. The league does not need to have a team in Seattle, the country’s 14th largest TV market. (The success of the Thunder in Oklahoma City, ironically — and, sadly for Seattle — only magnifies the point.)

Seattle was a strong NBA market for many years, going crazy for the Sonics of Gary Payton and Shawn Kemp, which reached The Finals in 1996. From 1995-99, the Sonics basically sold out Key Arena, and they never averaged less than 14,300 fans from 1991-2007, their next-to-last season in town. The city and surrounding area has a rich tradition of producing NBA talent, including current players Isaiah Thomas, Jamal Crawford, Jason Terry, Marvin Williams, Spencer Hawes, Rodney Stuckey and Aaron Brooks. “Seattle is a far better market than at least 10 NBA cities,” said a very high ranking executive of one of the league’s 29 teams last week.

The other night I reached out to a lot of media and league people in my contact list and simply asked, “Is expansion on the table?” I had 57 people respond, 14 of those either did not comment or said they didn’t know. That leaves 43 other responses. Some that really jumped out were: “With no arena, you’d get 14, maybe 16, votes toward expansion.” “I’ve heard there are 14 definitely for it.” “It [expansion] is definitely on the table and being discussed.” “There are two who are fully no, everyone else can have their mind changed.”

I’ve heard that once the CBA is finished, the expansion bidding could be announced as soon as December or as late as the All-Star Game in February. There are going to be numerous other cities competing with Seattle to get the expansion franchises as well. I do not know if there is just going to be one slot or two. Other cities I’ve heard that are going to be making a play for expansion are Louisville (they have all their affairs in order and ready to go), Pittsburgh, Omaha, Las Vegas, Vancouver, BC, and Mexico City. Kansas City and St. Louis have been brought up as well, but I can’t confirm the validity of their interest.

The topic of expansion was brought up by a questioner, who was wondering about the viability of a team ever returning to Seattle, which was the home of the Supersonics from 1967 until 2008 before moving to Oklahoma City and changing the name to the Thunder. Silver was quite candid in his response, quickly shutting down the thought of expansion due to financial reasons for the league’s owners as well as from a business standpoint concerning the NBA as a whole. “The issue with the NBA right now, is every team in essence, can have a global following,” Silver said. “The need to expand the footprint by physically putting another team in a market becomes less important from a league standpoint. And therefore, the way the owners see expansion at the moment is really the equivalent of selling equity in the (league).

“We are 30 partners right now. Thirty teams. Each of those teams own 1/30th of all the global opportunities of the NBA. So the issue becomes, if you expand, do you want to sell one of those interests off to a new group of partners? One reason to do it of course, is that if its additive. And no doubt, Seattle is a great market. At the moment, like for me as successful as the league is right now, we (are) not in the position, putting even aside profitability, where all 30 teams are must-see experiences. That’s not a secret.”

There had been speculation that when Silver took over in February 2014, his primary goal was to expand the NBA into Europe, likely London or Paris. “We are not actively taking steps to bring a franchise to Europe or to expand to Europe. It’s something that we’ve looked at over the years,” Silver said. “It just doesn’t feel like the time is ripe right now, especially given what’s going on . . . with the Euroleague and FIBA. We think the best place for the NBA right now is to showcase an NBA game here in London, to play our preseason games here, and to work on a grass-roots level to develop the game. But at the current time, we are not looking at franchises in Europe.”

Q: It’s no secret that the NBA want a franchise in Europe, how do the players feel about that? Nikola Vucevic: Obviously it would be nice for us European players if you had a franchise in Europe but I think it would be hard to do because of the travel. It takes a long time to get from Europe to the US and also the time difference would really affect the players as well so I don’t know if it’s doable. Obviously it would be great for the NBA to have a European franchise but I don’t know how it would work out but I don’t know if it’s doable for geography reasons.

Nobody is throwing around the E word yet. “We don’t have specific plans to expand to Mexico City in the near future,” says NBA commissioner Adam Silver. Security is a concern. In 1997, the Houston Rockets traveled to Mexico City for a regular season game. When they arrived, they were warned: Be wary of traveling to certain areas because kidnappings were rampant. In a briefing, Rockets players were told that the U.S. had recently set up an office in Mexico to deal with the kidnapping of U.S. citizens. That day the top official from that office was kidnapped. Things haven’t improved much. There were more than 100,000 kidnappings in 2012, according to the U.S. State Department, and a recent survey found that total crimes in 2014 (33.1) were up nearly 50% from 2011.
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December 15, 2017 | 3:59 pm EST Update

The man who accused Ray Allen of making violent threats against him after their alleged relationship went sour is backing off — he’s dropped his case against the NBA star, TMZ Sports has learned. As we previously reported, Bryant Coleman got a temporary restraining order against Allen in Florida after telling the court Ray sent men after him and made violent threats over the phone. Coleman had previously told TMZ Sports he believed his life was in danger.
Ray Allen had always maintained the allegations were B.S. — and that Coleman is the real bad guy … who catfished him in a scheme to get private information from the NBA star. Now, we’ve obtained court documents which show Coleman has voluntarily dropped his restraining order — though he doesn’t explain why the change of heart. Ray’s attorney, David Markus, tells us, “We are pleased Coleman voluntarily dismissed the injunction and false claims he made against Ray Allen.” “Ray has never met Coleman, has never spoken with him or threatened him in any way. He wants nothing to do with him and is looking forward to putting this matter behind him.”
December 15, 2017 | 2:56 pm EST Update