NBA Europe’s format revealed as Adam Silver targets $7bn windfall

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The NBA is coming to Europe – and for the 30 existing team owners, it promises to be extraordinarily lucrative.

The average NBA side in the United States is worth well over $5bn, the team owners – around half of whom have been in situ for at least a decade – only see that kind of return upon selling.

But NBA Europe promises to return some of that value to the shareholders while simultaneously allowing them to retain ownership of their beloved franchises and spread the basketball gospel across the world.

Currently, NBA commissioner Adam Silver is courting permanent franchises in 12 European cities: London, Manchester, Paris, Lyon, Berlin, Munich, Rome, Milan, Barcelona, Madrid, Athens and Istanbul.

At least two of those will see investors pay $1bn-plus, while $500m is the minimum franchise fee at this stage. That implies a total of $7bn, which the NBA is free to distribute as it likes.

Clearly, much of that cash will go towards creating the infrastructure and marketing needed to launch a continent-hopping basketball league. But an equally healthy chunk will line the pockets of the NBA’s existing ownership class.

There are a number of hurdles left to clear yet, however.

For starters, Europe already has a basketball league, EuroLeague. There is politics to iron out there, especially given that the NBA realistically needs names like Real Madrid – which acted as a creche for Luka Doncic among others – to give it the cachet it needs to succeed in Europe.

There’s also the matter of getting the right kind of owners on board. Private equity, naturally, is being touted, as are soccer club owners on the old continent and sovereign wealth funds. Existing owners of NBA franchises, it seems, won’t be partaking.

But probably the most important wet cement is the competition’s format, both in terms of the sport itself and the financial system underpinning it.

A report from Sportico has outlined in the clearest terms yet what prospective franchise owners can now expect.

NBA Europe will borrow certain ideas from its older brother in the US, including a salary cap and localised media rights.

But it will also have a more performance-indexed financial distribution system than the NBA itself, as well as bespoke kit deals for franchises, as opposed to the NBA’s league-wide Nike deal.

In terms of the ownership breakdown between teams and leagues, the league will reportedly be split evenly between new franchise owners and existing team owners.

Revenue will be largely retained by the new franchises, while the NBA mothership is committed to absorbing losses in the first few years. In the first six years, the projected distribution among teams is $1.5bn.

Meanwhile, the league – which the NBA says can be profitable within a decade – will encompass 12 permanent franchises and four more who will earn promotion from associated FIBA leagues.