For The First Time In Two Decades, The Top Spot Goes To A Franchise That’s Not The Knicks Or Lakers

Led by the eye-popping $7 billion Golden State Warriors, the average NBA team is now worth $2.86 billion, 15% more than a year ago, an impressive feat considering the stock market is down more than 15% over the same span.

The NBA is Golden.

For the first time in more than two decades, when Forbes began valuing National Basketball Association teams, a team other than the New York Knicks or the Los Angeles Lakers is the league’s most valuable. This year, the Golden State Warriors take the top spot, worth $7 billion, 25% more than last year. (The full list of NBA team valuations can be found here.) During the 2021-22 season, the Warriors generated the most revenue ($765 million after paying their revenue-sharing check) and the most operating income ($206 million) in NBA history as they won their fourth title in eight years and played their first full season with fans in the new Chase Center.

The Warriors made league financial history by raking in $150 million from arena sponsorships and advertising, double any other team, and by pulling in more than $250 million from premium seating, by far the most in the league.

The Knicks, the league’s most valuable team the past seven times Forbes has compiled the list, finished second ($6.1 billion), followed by the Lakers ($5.9 billion), the Chicago Bulls ($4.1 billion) and the Boston Celtics ($4 billion).

The average NBA team is now worth $2.86 billion, 15% more than a year ago, an impressive feat considering the stock market is down more than 15% over the same span. After arena debt service, league-wide revenue and operating income for the 2021-22 season were $10 billion and $2.7 billion, respectively—both record highs. The NBA is back on its pre-Covid growth trajectory, led by aggregate record sponsorship and advertising revenue at the team and league level, which totaled $1.35 billion last season, also an all-time high.

Another reason values rose: Valuation multiples (enterprise value/revenue) are up thanks to the league’s growth, profitability and pristine balance sheets. The average multiple for the 30 teams is 8.6, versus 7 pre-Covid. Only one team, the Brooklyn Nets, lost money last year, and the average debt/enterprise value of the 30 teams is just 10%. In other words, buying a team today means an owner can quickly begin to pocket cash and never have to put in another dime. For example, since buying the Houston Rockets in 2017, Tilman Fertitta has pulled out at least $62 million a year, except for the 2020-21 season (when the pandemic shortened the regular season to 72 games and greatly reduced attendance at games), according to sources.

Contrast that with Steve Ballmer’s purchase of the Los Angeles Clippers for $2 billion in 2014. A couple of years after buying the team, the former Microsoft CEO quipped: “I’m a new owner, and I’ve heard this is the golden age of basketball economics. You should tell our finance people that. We’re sitting there looking at red ink, and it’s real red ink. I know, it shows up on my tax returns. So it is real red ink.” Ballmer is no longer complaining. The Clippers finished handily in the black last season, and Ballmer is building a new arena that has a $500 million naming-rights deal. The Clippers are now worth $3.9 billion, almost doubling in value over the eight years of his ownership.

The league’s revenue-sharing formula and salary cap help ensure the financial health of the league. The formula had low-revenue teams split nearly $500 million that was pooled from funds that came from a combination of high-revenue teams and luxury-tax payments last season. Meanwhile, the soft cap limits player salaries to 44.74% of the league’s basketball-related income.

Future growth will come from the league’s next national media deal, which would begin with the 2025-26 season and should be worth at least double its current $2.66 billion-a-year agreement with ESPN and Turner Sports. In addition, there’s the fledgling NBA Equity, a new initiative akin to 32 Equity, the NFL’s venture capital arm, which is worth over $100 million per team. NBA Equity was created in order for the league to invest in existing or potential partners, from early-stage to growth-stage startups, that will help drive innovation and expand the NBA’s business. Among its investments: Sportradar, a publicly listed data company for gaming, media and sports leagues; Nextiles, a participant in the NBA Launchpad program that is a smart fabrics company, capturing data with technology built into clothing; Sorare, a premier NFT-based fantasy gaming company; and New Era, a lifestyle and apparel brand. Sources familiar with NBA Equity say its portfolio has about 20 investments that are closing in on an aggregate value of $1 billion. Given the tremendous value and reach of the NBA’s intellectual property and brand, NBA Equity will eventually be a much more valuable asset.

2022 NBA VALUES

#1. $7 bil

GOLDEN STATE WARRIORS

^{1-YEAR CHANGE: 25% | OPERATING INCOME: $206 mil}

^{OWNERS: Joe Lacob, Peter Guber}

#2. $6.1 bil

NEW YORK KNICKS

^{1-YEAR CHANGE: 5% | OPERATING INCOME: $155 mil}

^{OWNER: Madison Square Garden Sports}

#3. $5.9 bil

LOS ANGELES LAKERS

^{1-YEAR CHANGE: 7% | OPERATING INCOME: $115 mil}

^{OWNERS: Jerry Buss Family Trusts, Mark Walter, Todd Boehly}