Adam Silver discusses franchise valuations and the NBA’s next TV contract, cements his bargaining position

Eric Freeman

When current NBA deputy commissioner succeeds long-time head honcho David Stern as the league's top executive next February, he will immediately be handed the fairly serious responsibility of negotiating a new television contract with various media companies. The TV deal serves as a primary source of revenue for the league and also acts as a marker of status, with the payout communicating the NBA's relative popularity and sway over the American sporting landscape. The resolution could be the first indication of Silver's ability to thrive as commissioner.

In advance of negotiations, the league will need to present itself in as flattering a manner as possible. One way to do that is by having NBA teams valued at the highest possible dollar amount, or at least making it seem like any franchise would sell for a record figure if put on the market. The recent $535 million sale of the Sacramento Kings and subsequent $800 million valuation of the Golden State Warriors certainly create that impression. However, sales of other, less coveted franchises could change that image.

So, although he didn't come right out and say it, Silver suggested that several teams were recently taken off the market because of the next TV deal. From Brian Windhorst for ESPN.com:

With franchise values soaring and a lucrative TV rights deal on the horizon, incoming NBA commissioner Adam Silver said Tuesday that currently no teams are for sale.

Several teams, including the Minnesota Timberwolves, have been pulled off the market recently. The Milwaukee Bucks and Toronto Raptors had also been rumored to be available.

"As we look at the coming domestic television deal and a great playoffs and Finals, there's a great buzz around the league right now," Silver said at the Bloomberg Sports Business Summit. "There aren't any teams for sale but if there were [the price] would be robust."

This is a significant departure from the last three-plus years, when teams were selling both cheaply and quickly as nine franchises sold, many at reduced values. It may have reached its nadir in 2011 when Michael Jordan purchased a controlling interest in the Charlotte Bobcats for less than $200 million and the big market Philadelphia 76ers changed hands for a reported $280 million.

It's in Silver and the NBA's interest to avoid any low-figure sales, because as of now the Kings and Warriors figures present an amazingly rich future for franchise valuations. It's possible that those were outliers dependent on unique circumstances — the fight to save the franchise from owners who would move them to Seattle for the Kings, the fact that the Bay Area has an uncommon number of extremely rich people willing to pay an exorbitant sum for a minority stake in the Warriors. We won't know for sure until the next team is sold, and it may not be a good idea for the league to take that risk.

On the other hand, it's important to note that waiting could also be a good idea for the owners looking to sell their teams. If the new TV deal reaches stratospheric levels, then each NBA franchise automatically becomes more valuable simply because of increased revenue. That situation could be complicated by a number of teams going on the market at the same team following the conclusion of negotiations, but waiting is worth the potential windfall. Some owners may even decide to hold onto their franchises if the financial picture becomes more attractive.

It's important to note that we have no idea how the NBA guided these owners in deciding to take their franchises off the market. If they did play a major part in that decision, then it says a lot about the league's optimism for the future. Perhaps Silver has even proven that he has the foresight to improve upon the last few years of Stern's reign.