The Warriors have been on an incredible run since the start of the 2014-15 season, winning 85% of their games. They won an NBA title, made it back to the finals with an NBA-record 73 regular season wins and once again have the best record in the NBA this season after adding four-time scoring champ Kevin Durant in free agency over the summer.
The club posted the highest average cable TV rating (9.8) during the 2015-16 season, more than double the previous year. The season ticket wait list is at 32,000 with a renewal rate of 99.5%. No wonder the team felt comfortable sending out season ticket invoices last week for next season with price hikes of 15-25%.
The Warriors and their NBA Finals opponent, the Cleveland Cavaliers, both benefited from a reduction last year to the share of playoff ticket revenue going to the league office from 45% to 25%. The move incentivized teams to jack up playoff ticket prices with more of the spoils staying with the teams. The Warriors hosted 14 playoff games and during the NBA Finals grossed $10 million per game, before the NBA took their cut. After the exorbitant playoff ticket price hikes last year, the Warriors are taking a breather, not increasing prices for the first three rounds of the 2017 playoffs.
But the team is ready to cash in more in other areas. The Warriors broke ground in January on their new privately financed $1 billion arena in San Francisco’s Mission Bay neighborhood, which is set to open for the 2019-20 season. They’ve already secured a 20-year naming right agreement with Chase worth an estimated $300 million that is the richest ever for a U.S. arena. The Warriors could challenge the Knicks and Lakers for the NBA’s highest revenues when the building opens.
It is a golden age for basketball owners and investors are clamoring to get involved. “There are a lot of prospective buyers for NBA franchises, but no sellers right now,” says Sal Galatioto, who runs an investment bank focused on the sports industry.
Operating profits are at a record high—an average of $31 million per team. Owners, meanwhile, are salivating at what’s on the immediate horizon: a new seven-year collective bargaining agreement that secures labor peace through the 2023–24 season, and the start of a nine-year, $24 billion national TV deal this season with ESPN and TNT worth triple the previous annual amount. Operating profits could double this season.
While no majority stakes in teams are up for bid (Mikhail Prokhorov is shopping a minority stake in the Brooklyn Nets), investors are getting into the NBA any way they can. The league recently refinanced $300 million of its $3.5 billion credit facility.
Demand was 10 times the offering at a 3.6% interest rate thanks to the strength of the league’s financial prospects.
Rounding out the five most valuable franchises are the Chicago Bulls ($2.5 billion) and Boston Celtics ($2.2 billion).
Other big movers besides the Warriors were the Sacramento Kings ($1.075 billion) and Milwaukee Bucks ($785 million), both up 16%. The Kings opened their new arena, Golden 1 Center, this season to rave reviews, while the Bucks are set to open their new building in 2018.