Notice Expansion Vote This Summer

[tlongII]

I don't gamble much either. But I do like craps a little. I assure you I can do math . It is just for fun. I rarely lose much money playing it.

Poker is fun too.

I go every year for the first weekend of March Madness. It’s a blast! I’m up about $500 in my BetMGM app, but it’s the only thing I gamble on. I love pool parties too!

 

[SharpesTriumph]

I honestly don't understand why anybody likes anything about Vegas. How is that place still standing? Why does anybody go there?

It's a lot of fun for all age groups, college is self explanatory, but even with young kids it's been good. We fly in there often (crazy cheap flights) stay one night then rent a car for big trips to all the Utah national parks.

Compare that to New Orleans - that's a horrible city to take young kids. We did one night there before a cruise but I sure as hell won't do that again. Even walking around at noon is sketchy.

 

[kjironman1]

I believe the past argument had something to do with 2 more teams taking a share of the TV revenue. Not sure if that is still the case.

I know it’s pretty much here nor there but wouldn’t adding two teams also add tv revenue? Not sure a completely agree with that stance though I think you are correct that is what the reverse point was.

 

[SharpesTriumph]

I can see going for a convention to see new stuff.

The food was fine. But there's no shortage of good food in Oregon or Seattle.

I was mildly interested the first day or so. Completely bored or underwhelmed the rest of the time.

It's too hot. Too flat. Too square. I don't get it. I just don't get it.

This reminds me of a grandma I met in Utah. Lived her whole life in a one stoplight small town. Told me all about the cool places to go if I drove right as there was great hiking, camping, mountains. I was slowly passing through in a month long road trip from Oregon to Texas. It was a very beautiful area.

I asked her what was instead off to the left as the map showed it was about 100 miles to another town. She said she'd never gone that direction.

 

[SlyPokerDog]

I honestly don't understand why anybody likes anything about Vegas. How is that place still standing? Why does anybody go there?

 

[SlyPokerDog]

Myself, @JfizzleBlazer @Chris Craig and bunch others on here really need to organize a forum Vegas trip.

@Phatguysrule you'll be coming with us.

 

[RR7]

I know it’s pretty much here nor there but wouldn’t adding two teams also add tv revenue? Not sure a completely agree with that stance though I think you are correct that is what the reverse point was.

Eventually...potentially. But the current deal is already signed, so it's an immediate loss on that income. Though I imagine teams will clear a nice chunk in the expansion fees to help with some of that

 

[Phatguysrule]

It's a lot of fun for all age groups, college is self explanatory, but even with young kids it's been good. We fly in there often (crazy cheap flights) stay one night then rent a car for big trips to all the Utah national parks.

Compare that to New Orleans - that's a horrible city to take young kids. We did one night there before a cruise but I sure as hell won't do that again. Even walking around at noon is sketchy.

That's the best reason I've heard yet.

 

[blazerkor]

I am in Vegas a couple times a year but I only fuck with the strip for food. Went to UNLV, have family there and if you can get past the desert of it all, it's a nice enough city. I did have my years in my 20s where it was fun when friends came into town to be down on the strip but those days are long gone.

I do see the appeal for anyone who has never lived there for a prolonged period of time. If I was never a local and didn't have family time to consider, it would be a nice vacation spot.

 

[Chris Craig]

Myself, @JfizzleBlazer @Chris Craig and bunch others on here really need to organize a forum Vegas trip.

@Phatguysrule you'll be coming with us.

Lots to do there without gambling. Had a blast with @SlyPokerDog and @KingSpeed last time we went.

I don't gamble much, though I might have to enter another blackjack tournament.

 

[BigGameDamian]

 

[wizenheimer]

Eventually...potentially. But the current deal is already signed, so it's an immediate loss on that income. Though I imagine teams will clear a nice chunk in the expansion fees to help with some of that

the estimate on the expansion fees is pretty vague....2.5B-->5B+ per team. If you assume 9B for two teams, then each owner would be pocketing 300M. And I'm assuming some advantageous tax treatment since this is supposed to compensate for future 'lost' revenue

the Media contracts were initially a 76B/11-year aggregate deal. But I read where there has already been some streaming revenue internationally added to that. So then, call it 7B/year. The owners get half of that, at least I think that's their cut in the new CBA. Call it 3.3B/year since the league office will skim some off the top (and it makes for easy math). For each of the 30 owners, that's 110M a year. If there are 32 owners, that drops it to 103M/year. A loss of about 7M/year. But this is year 3 of the new CBA and if expansion doesn't happen till 2027, there would only be 7 years left on the medial deal. So, a total dilution of around 50M vs a 300M infusion in say the 4th year of the deal

so I take back what I said about owner opposition because of dilution. Those expansion fees are pretty persuasive. That's not to say there won't be any opposition though

there's also the factor that while NBA teams get to keep most of the revenue from home games, there is still a portion that is dropped into the BRI pool. I tries to find how much or what percentage but it's all pretty vague. In any event, and maybe it's not very significant, those two expansion teams would be dropping some money into the BRI pool that would offset the dilution

 

[RR7]

the estimate on the expansion fees is pretty vague....2.5B-->5B+ per team. If you assume 9B for two teams, then each owner would be pocketing 300M. And I'm assuming some advantageous tax treatment since this is supposed to compensate for future 'lost' revenue

the Media contracts were initially a 76B/11-year aggregate deal. But I read where there has already been some streaming revenue internationally added to that. So then, call it 7B/year. The owners get half of that, at least I think that's their cut in the new CBA. Call it 3.3B/year since the league office will skim some off the top (and it makes for easy math). For each of the 30 owners, that's 110M a year. If there are 32 owners, that drops it to 103M/year. A loss of about 7M/year. But this is year 3 of the new CBA and if expansion doesn't happen till 2027, there would only be 7 years left on the medial deal. So, a total dilution of around 50M vs a 300M infusion in say the 4th year of the deal

so I take back what I said about owner opposition because of dilution. Those expansion fees are pretty persuasive. That's not to say there won't be any opposition though

there's also the factor that while NBA teams get to keep most of the revenue from home games, there is still a portion that is dropped into the BRI pool. I tries to find how much or what percentage but it's all pretty vague. In any event, and maybe it's not very significant, those two expansion teams would be dropping some money into the BRI pool that would offset the dilution

Thanks for the math on it! Was roughly what I was thinking, while being too lazy to do the leg work.
I'm sure there's some factors for owners to vote against. 32 teams instead of 30 means if they were ever to sell, maybe the value is dinged ever so slightly, because there's more supply. (hardly) Maybe a Portland owner really feels they can tap in to the Seattle market(we can't) and so would be opposed to a Seattle franchise. Maybe LA and Phoenix worry about a Vegas franchise, etc.
But overall, as you illustrated, it does appear that it's financially beneficial to the owners as a whole. And new markets could lead to new revenue sources.

 

[TYDame]

What would they call the Vegas NBA team? Las Vegas High Rollers? Las Vegas Strip?

 

[wizenheimer]

What would they call the Vegas NBA team? Las Vegas High Rollers? Las Vegas Strip?

LV Stacked Odds?

 

[inconceivable]

Myself, @JfizzleBlazer @Chris Craig and bunch others on here really need to organize a forum Vegas trip.

@Phatguysrule you'll be coming with us.

Go on the X-Scream at the strat at night. Front seat is the best. Sober.

 

[GoZers]

Ok? It is actually brilliant. Lots of the stuff is paid by tourists because of taxes on the strip.

Vegas is a legit city that isn't just associated with the strip too.

like i said, its a money grab. i get it. I just think teams in vegas feel cheap. i think its more fun to see a game full of Green Bay Packer or Portland Trailblazer fans vs a generic stadium on the strip with visitors in the stands. I know why they do it. It sucks.

 

[SharpesTriumph]

the estimate on the expansion fees is pretty vague....2.5B-->5B+ per team. If you assume 9B for two teams, then each owner would be pocketing 300M. And I'm assuming some advantageous tax treatment since this is supposed to compensate for future 'lost' revenue

the Media contracts were initially a 76B/11-year aggregate deal. But I read where there has already been some streaming revenue internationally added to that. So then, call it 7B/year. The owners get half of that, at least I think that's their cut in the new CBA. Call it 3.3B/year since the league office will skim some off the top (and it makes for easy math). For each of the 30 owners, that's 110M a year. If there are 32 owners, that drops it to 103M/year. A loss of about 7M/year. But this is year 3 of the new CBA and if expansion doesn't happen till 2027, there would only be 7 years left on the medial deal. So, a total dilution of around 50M vs a 300M infusion in say the 4th year of the deal

so I take back what I said about owner opposition because of dilution. Those expansion fees are pretty persuasive. That's not to say there won't be any opposition though

there's also the factor that while NBA teams get to keep most of the revenue from home games, there is still a portion that is dropped into the BRI pool. I tries to find how much or what percentage but it's all pretty vague. In any event, and maybe it's not very significant, those two expansion teams would be dropping some money into the BRI pool that would offset the dilution

The cost to the owners isnt primarily what's on the current NBA media deal - that's nearly irrelevant as you detail.

The cost that dwarfs that is the next media deal, and one after that, etc for 50+ years. They would be dividing all those future pies 32 ways instead of 30. Look at the %media deals have increased the last three decades. Three decades from now it might be 30 billion a year in the deal. That is what owners would object to or have concerns with.

The expansion fee influx is a one time cash grab. Take it now and the NBA can't add those 31/32 teams in the future. In other words waiting 10-20 years might have the expansion fee be worth 20 billion or more per team vs the 5 billion today. Again that would be a reason to delay expansion.

But on the other side there is the potential additional revenue Seattle and Vegas would add. Would that be more than what each team now is contributing to NBA revenue? If so that's a reason to do expansion now.

These are all the types of estimates each franchise has to do to see if expansion makes sense for them. My guess is smaller markets will be more likely to support expansion, and owners that have held for longer, thus having less wealth and less capital tied up in the team, would be more likely to support expansion.

Now if Silver is saying there will be a vote - my guess is expansion will happen. He can count votes. If they don't have the votes they wouldn't go through the trouble to even explore the possibility.

 

[SharpesTriumph]

like i said, its a money grab. i get it. I just think teams in vegas feel cheap. i think its more fun to see a game full of Green Bay Packer or Portland Trailblazer fans vs a generic stadium on the strip with visitors in the stands. I know why they do it. It sucks.

Do you love having teams in New Orleans and Memphis?

Personally I would much rather be able to catch an NBA game while in Vegas, than those cities where it's a waste.

 

[inconceivable]

What would they call the Vegas NBA team? Las Vegas High Rollers? Las Vegas Strip?

Sin City Gambits