For the past few years, the NBA‘s looming expansion has been discussed in league circles as the final step in a series of specific milestones, namely securing labor peace and locking in long-term national TV deals.
Commissioner Adam Silver said exactly that in a press conference at 2023 All-Star Weekend. He reiterated it after owners meetings last April, then again at the NBA Finals in June, and again after owners meetings in July.
“I have been saying for the last several years: Let’s let collective bargaining finish up, then the media deals,” Silver told reporters at the time. Once that happens, “we will turn to consideration around expansion.”
Now that both are done, however, Silver has added a new possible roadblock: uncertainty in local TV deals. Speaking to reporters Thursday after NBA owners meetings, Silver twice mentioned the volatility at regional sports networks (RSNs) as an unexpected new consideration.
“I’d just add the last component, which also is giving me just a bit of pause, is that we’d like to have a better sense of where we’re going with local media,” Silver said. “It’s well known that we’ve seen some significant declines there. Virtually two-thirds of our teams are now dealing with RSNs that recently experienced bankruptcies or have shut down.”
He added, “I think while we understand the national media landscape now, to the extent we’re looking at expansion domestically, I think we’d really like to understand what that opportunity for local media is, because it’s a pretty critical component of our teams’ economics.”
It’s likely not an insurmountable hurdle. Potential bidders are already preparing to make multibillion-dollar offers to add teams in cities such as Seattle and Las Vegas, the two most discussed locations. Silver said previously that expansion would likely be at least two teams and that the process would begin in earnest at some point this season. On Thursday, Silver said there was no firm update to that timeline.
Amid the contractions and shifts in RSNs, some NBA franchises have ditched cable entirely to distribute games via over-the-air broadcasts and a companion streaming service. One of those teams, the Utah Jazz, replaced a roughly $35 million deal with its RSN to dramatically increase the size of its potential audience. Sportico estimated last March that the new setup could produce around $20.8 million in its first season—including $2.4 million from the streaming component and a possible $15 million in ad revenue from the broadcast partnership.
Other teams are sticking with cable, hoping to preserve the revenue for as long as it lasts. A resolution in the bankruptcy proceedings for Main Street Sports, formerly Diamond Sports Group, has given 13 NBA teams at least temporary clarity on their local media status. That said, consumption changes continue to plague cable. The fourth quarter of 2024 saw 12% of all bundled subscribers cut the cord, bringing the total penetration of the legacy cable/direct broadcast satellite/telco-TV bundle down to 46.9 million households, or just 37% of all U.S. TV homes.
Expansion isn’t the only major project the NBA may embark on in the coming years. Silver also confirmed Thursday that the league was looking into building its own league in Europe, a blended structure that would include permanent franchises—with slots to be sold akin to domestic expansion—and space for a few EuroLeague teams to join the competition annually.
NBA owners also received welcome news earlier this month that will raise expectations for future expansion fees. The pending sale of the Boston Celtics for $6.1 billion, which would be the highest price ever paid for a sports team, would likely elevate the amount new owners will pay get new NBA franchises, Sportico previously reported.
“In terms of looking at [expansion] this year, I think we’re still in the process of digesting the Celtics’ transaction,” Silver said Thursday. “There’s no doubt that a major transaction like that becomes relevant to expansion. That deal has just been presented to us, so we’re still analyzing it. My sense is once we’ve been through that process that we’ll turn to [expansion] in a more serious way.”
