Five Owners Capitalizing On the NBA's Valuation Boom

Everett CookTop Lists
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The co-executive chairman of the Golden State Warriors, Joe Lacob and Peter Guber, at a 2017 championship ring ceremony. Courtesy of nba.com.

According to a recent Axios report, the average NBA team is now worth $2.4 billion. Even the league’s least valuable team, the New Orleans Pelicans, is still valued at $1.35B. Remarkable numbers even without context, but consider that in July 2010, the Golden State Warriors were purchased for a then-record $450 million. In the 11 years since, the Warriors have won three championships, the Sports Business Journal’s pro sports Franchise of the Decade, and are now the second-most valuable team in basketball at an incredible $5.21B.

The value of the investment stake in the Warriors has increased substantially because of the team and organization itself, but also because of the timing in which they were bought. Since the early 2010s, things like social media omnipresence (basketball players are the second-most followed professional athletes in the world) and a massive new TV deal (more than $2.6B per year through 2024-25) have blown up the valuations of NBA franchises. And Golden State’s ownership group weren’t the only ones who capitalized on this at the turn of the decade.

Between March 2010 and October 2011, six NBA franchises were sold to new ownership groups. All six of those teams are now worth at least five times what they initially invested. That includes the Brooklyn Nets, whose majority ownership stake was bought in May 2010 by Russian billionaire Mikhail Prokhorov for $200M and then sold to Chinese billionaire Joseph Tsai for a record $2.35B in 2019.

The other five owners remain in place, still earning a massive profit on what is now a decade-old investment. Read on to learn more about the Warrior’s ownership group and others who have all made between 5x and 12x on their initial investments.

Charlotte Hornets: $275m, March 2010 → $1.51B, 2021

Michael Jordan went from the greatest basketball player of all time to one of the smartest businessmen in the league in less than a decade. After retiring from basketball in 2003, Jordan bought a minority stake in the Charlotte Hornets in 2006, an expansion team that had only been in the league for two years at that point. That minority stake grew over the years, as did his power in the front office, and in 2010, Jordan became the only ex-player to own an NBA team when he bought the majority stake in the franchise for $275M.

In fairness, the Hornets under Jordan have been objectively awful. Charlotte has finished above .500 twice since 2010 and has never made the second round of the playoffs under Jordan. Plus, the Hornets are the fourth-least valuable franchise in the NBA, in part because Charlotte remains one of the smallest markets in the league.

Despite all that, Jordan can now count a more-than 5x return on his initial investment. If the Hornets can string together a few winning seasons, that multiplier will only continue to grow.

Washington Wizards: $310m, June 2010 → $2.05B

The owner of the Washington Wizards, Ted Leonis, is one of a few true professional sports tycoons in NBA ownership circles. His company, Monumental Sports & Entertainment, not only owns the Wizards and the arena they play in, the Verizon Center, but also the NHL's Washington Capitals, the NBA G League's Capital City Go-Go, the WNBA's Washington Mystics, and before the Arena Football League folded, the Washington Valor. While the Valor were still in operation, MSE was the only privately held company in a top-10 market to own and operate five professional sports teams as well as a major arena.

Leonis made his money through AOL (now owned by Verizon), after he sold a communications company to the conglomerate in the mid-90s and then stayed on as a senior executive. He already owned the Capitals by the time he got involved with the Wizards, buying his $310m stake from Abe and Irene Polian, a couple who owned the team for an NBA-record 46 years. Leonis has made a killing on most of his pro sports involvements, but the 6.5x return on the Wizards remains his flagship investment.

Golden State Warriors: $450m, July 2010 → $5.21B

People forget, but the Golden State Warriors were fairly mediocre throughout the 90s and 2000s. Things started to change in 2010, when an ownership group led by Joe Lacob and Peter Guber spent a then-record $450m on the team and decided to bring Silicon Valley growth techniques to the new basketball business. The team invested heavily in things like analytics and nutritionists and have been climbing the league’s value rankings ever since. Last year, Golden State surpassed the Los Angeles Lakers and now sit just behind the New York Knicks, valued at $5.4B.

A big part of that climb is the Chase Center, the Warriors new arena that opened in San Francisco in late 2019. The venue placed a big emphasis on cutting-edge game and concert experiences in the arena itself, but was also built alongside the Chase Center Towers, 580k square feet of office and lab space and 100k square feet of retail space. So far, Uber is the main tenant, with more to come after the pandemic opens up office and retail space again.

Lacob, the CEO, started his career at venture capital firm Kleiner Perkins and has led investment in over 50 startups. The Lacob family tree now runs concurrently to the Warriors org chart, as Joe's two sons both work for the team, the older as EVP of Basketball Operations (Kirk Lacob) and the younger as Director of Team Development (Kent Lacob).

Detroit Pistons: $325m, June 2011 → $1.74B

The Detroit Pistons needed new ownership only because Bill Davidson died in 2009 after almost 40 years at the helm. After several years of internal turmoil, the family decided to sell the team and its arena, The Palace of Auburn Hills, to local businessman Tom Gores in 2011. A graduate of Michigan State, Gores is the founder of Platinum Equity, a private equity investment firm that has approximately $23B of assets under management. Platinum Equity owned 49% of the Pistons to Gores’ 51% until 2015, when he purchased the remaining stake to make himself the sole owner.

Not much is publicly known about Gores’ personal life outside of his business endeavors and the recent controversy surrounding Platinum Equity’s role in the rates that prison telecom companies charge its prisoners. His biggest impact as owner has been moving the Pistons home arena to Little Caesars Arena in downtown Detroit, where the NHL’s Red Wings play, and subsequently demolishing the Palace. Other than that, the Pistons have had one season above .500 since he took over.

Philadelphia 76ers: $280m, October 2011 → $2.50B

One of the oldest franchises in the league, the Philadelphia 76ers also now have one of the strongest ownership groups in the NBA. The group of investors that bought the team in 2011 was led by businessman Josh Harris as well as David Blitzer’s group, which includes AMC Theatres CEO Adam Aron, Fanatics founder Michael Rubin, actors Jada and Will Smith, and others.

Similarly to the Warriors, the 76ers were bought with the goal of turning the franchise into a strong business as much as a strong team. Harris is the co-founder of Apollo Global Management, one of the largest alternative investment managers in the world, and is also the principal owner of the NHL’s New Jersey Devils and a general partner of Crystal Palace in the English Premier League. Blitzer, meanwhile, holds the same titles in the Devils and Crystal Palace, but made his name at private equity firm Blackstone, where he is now the Global Head of Tactical Opportunities.

Since the ownership change, Philadelphia has gone from mediocre to one of the worst teams in the league to a perennial contender, having made the playoffs for three consecutive years. They also run one of the most interesting non-basketball avenues for revenue in the NBA -- The Sixers Innovation Lab. Located on the ground floor of the Sixers new training complex in Camden, NJ, the incubator invests and assists startups and entrepreneurs in many verticals, most of them outside the world of sports.

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