The Data Behind Surging NBA Team Valuations

At the beginning of this decade, the NBA was not on firm footing. More than half of the league’s teams were losing money, and negotiations on a new collective bargaining agreement were looming.

Today, however, the NBA has undeniable momentum, buoyed by hefty broadcast agreements and superstars like LeBron James and Steph Curry. With interest in the NFL flagging in the U.S., professional basketball appears to be seizing the opportunity to win over sports fans and grow the popularity of the league.

This momentum has pushed team valuations to new heights, with the median team now being worth a solid $1.56 billion.

What are the exact valuations of individual franchises in the league, and how are these values derived? Let’s dig into Forbes’ annual NBA Valuations Ranking to learn more.

Breaking down team value

Forbes has broken down the value of an NBA team valuations into four components:

Sport: The revenue shared equally among all teams in the league
Market: City and market size
Arena: Revenues from sources such as attendance and premium seating
Brand: The actual value of the team’s brand

Every single team in the NBA is now valued at over $1 billion, and all but one team (the Cavaliers) were profitable last year.

For teams like the Knicks and Lakers, it’s easy to see how their huge market size contributes to their sky-high valuations. The former is currently the second-most-valuable sports franchise in America, tied with the New York Yankees.

While the biggest teams are worth more than double the NBA median value, the rising tide appears to be lifting all boats. The median team value has risen steadily and is up nearly 200% since 2014.

Gold Rush

The biggest story in basketball over recent years has been the ascension of the Golden State Warriors.

Making the NBA finals four seasons in a row – and winning three of those match-ups – has had a massive impact on the team’s value, which has shot up 367% over the last five years. As the team moves to the brand new Chase Center next season, Golden State may even have a shot at surpassing the Knicks or Lakers in overall valuation.

Here are the top five gainers over the past five years:

Fan Power

The teams with the highest revenue-per-fan are typically in smaller markets like Salt Lake City and Oklahoma City, though both cities are unique in that an NBA franchise is their only professional sports team.

The struggling Chicago Bulls comes in near the bottom by revenue-per-fan, despite being the fourth most valuable team in the league.

Shifting Gravity

In recent years, LeBron James has been one of the most electrifying personalities in professional sports, however, his influence on the NBA is now proving to be a double-edged sword. Since LeBron moved time zones from Cleveland to Los Angeles, NBA viewership is down – a dip that is particularly pronounced during the earlier Eastern Conference time slot.

Despite the slight dip in viewership, NBA teams are more profitable than they’ve ever been, and as the NBA turns its sights eastward to China, today’s valuations may seem modest in a few years time.