The reported finalizing of the NBA’s national media-rights contracts worth $76 billion over 11 years with ESPN, Amazon and NBC has cleared the league’s final stated obstacle before announcing an expansion process that should revive the Sonics anew.
NBA commissioner Adam Silver has been dropping not so subtle hints the past year that the league would look into expanding by two teams once the nine-year, $24 billion deal negotiated a decade ago ran its course and was replaced. This new deal, for nearly three times the prior annual rate, gives the league’s 30 team owners a more complete picture of the revenue pie that will need to be split with two additional expansion franchises.
Seattle and Las Vegas are widely considered the front-running cities to land clubs. The time frame for the expansion process remains unclear.
“There’s been some discussion about going back to Seattle, potentially,” Silver said in an interview with NBC Sports Boston last month. “Las Vegas, no doubt, is very interested in a team. Mexico City one day.
“But there’s lots of other U.S. cities and Canadian cities, frankly, that have reached out to us to tell us they’d be interested.”
Seattle and Las Vegas remain favorites, partly because of the involvement of longtime Silver and NBA associate Tim Leiweke, co-founder of the Los Angeles-based Oak View Group (OVG). It was Leiweke’s company that overhauled KeyArena into what’s now Climate Pledge Arena for $1.15 billion that included $50 million in exclusive NBA enhancements the league was kept apprised of.
Leiweke — brother of Kraken CEO Tod Leiweke — is also spearheading plans for an all-private $10 billion, 66-acre development three miles south of the Las Vegas Strip that would include hotels, gaming and a 20,000-seat NBA arena.
That project has yet to break ground and got competition last month from a group planning an NBA-ready arena on the Vegas Strip itself, headed by real estate developer LVXP. LeBron James and Shaquille O’Neal have expressed interest in owning a Las Vegas team.
Now that NBA owners know they are guaranteed $6.9 billion annually from national TV alone, they can go about setting an expansion fee. That fee, expected to top $4 billion, would generate immediate cash for each of the 30 teams that wouldn’t be subject to revenue sharing with players. It would enable owners to offset pandemic-related shortfalls and the future loss of broadcast revenue from the new TV package because they would need to share it among 32 teams instead of 30.
They must also decide on timing — whether to add two franchises at the same time or stagger them. Though leagues prefer expanding in pairs to balance conferences and scheduling, some potential cities, such as Seattle, have ready-built arenas while Vegas and others do not.
The Seattle bid for a squad that would revive the Sonics name and traditional logo and colors would be headed by the family of Kraken majority owner David Bonderman — chiefly through his daughter, Kraken co-owner Samantha Holloway.
“I think that the Kraken is a new brand and extremely important to this city and our family, and we need to grow this brand and make a hockey fan out of everybody here,” Holloway said in a December 2022 interview upon ascending to equal ownership control of the Kraken with Bonderman. “As a separate endeavor, we believe this town needs a basketball team as well — or an NBA team, as it has a great WNBA team already. And our family is prepared to work on making that a reality as we built the arena to be able to do that as well.”
Two months ago, Holloway announced to season-ticket holders that the NHL team was creating a separate company to serve as “a parent brand that will umbrella the Kraken brand and prepare for other big opportunities.” A team spokesperson clarified that the company’s main goal for now will be overseeing projects such as the $150 million Memorial Stadium overhaul undertaken by the Kraken and Tim Leiweke’s OVG.
The spokesperson added: “When [NBA] commissioner [Adam Silver] is ready, so is this ownership group, but they’ll be careful not to get before this process.”
The timing of the umbrella company and resolution of the NBA’s TV negotiations hardly appears coincidental. Holloway pledged more information about the company would be made midsummer, about the expected time frame for the completed TV deals to be announced and the league to move on to expansion.
Another step toward preparing a Seattle bid was the need for Holloway’s father to divest his minority stake in the Boston Celtics — as NBA bylaws prohibit owning two teams at once. That also appears imminent after the Celtics announced last month that Boston Basketball Partners LLC — the team ownership group Bonderman is part of — put the franchise up for sale.
Managing partner Wyc Grousbeck clarified this week that 51% will be sold fairly soon and an additional 49% by 2028.
It won’t be Bonderman alone bidding for any Seattle expansion team, especially with the price expected to exceed $4 billion. Forbes recently pegged the average price of an NBA squad at $3.85 billion, but the magazine’s valuations often lag behind what teams actually go on to fetch.
A decade ago, expansion teams were expected to go for $1 billion or maybe $2 billion at most. The last NBA TV deal and its lucrative revenues, along with greater sponsorship opportunities generated by new state-of-the-art arenas drove sale prices to record levels — with the Phoenix Suns fetching $4 billion in 2022 and the Milwaukee Bucks going for $3.5 billion last year.
Bonderman, chairperson and founding partner of the TPG private-equity group, has a net worth pegged by Forbes at $6.2 billion. So unless he’s prepared to spend two-thirds of that on a basketball team, he’ll need help from partners.
Beyond finances, there will also be the public-relations benefits of involving local ownership such as the Ackerley Sports Group — from the family that headed up more successful versions of past Sonics teams and counts brothers Ted and Chris Ackerley as current Kraken local owners. The brothers formed the sports company last year, and this year made an initial investment in England’s Leeds United soccer club, becoming owners and partners.
Their father, Barry Ackerley, owned the Sonics for 18 years while he and his wife, Ginger, founded the WNBA’s Storm.
Another Kraken owner expected to be a part of any Bonderman-led ownership group would be Amazon CEO Andy Jassy, who has a reported net worth just north of $500 million.
Hollywood producer Jerry Bruckheimer, who headed the Kraken expansion bid alongside Bonderman and remains a team owner, also expressed interest in owning any Sonics team during an interview in February 2018.
“I love sports, period,” said Bruckheimer, who reportedly became a billionaire in 2019. “And I would be involved in anything we can get done in this arena. Because we’re so excited about the prospects of what the design is, what the fan experience could be for both sports.”
Also, there are a handful of former Sonics stars the Kraken owners would be certain to court as minority investors, Gary Payton foremost among those.
Former Storm star Sue Bird is another possibility, having already invested as a minority partner in the WNBA team. Payton and Bird are featured prominently in scoreboard messages to fans at Kraken games. Former Seahawks star Marshawn Lynch is already a Kraken minority investor who has made increasingly frequent public appearances on behalf of the team.