$10 billion or more is invested by Raptors…

$10 billion or more is invested by Raptors…

Canadians will be reminded of the Toronto Raptors’ NBA triumph come June of this year. Ultimately, it will mark the fifth anniversary of the momentous achievement.

 

This concluded an unparalleled period of achievement for a side that joined the league as an expansion squad in 1995. The club won its division six out of seven years from 2014 to 2020 in addition to the title. Numerous players were named All-Stars, and coaches Dwane Casey and Nick Nurse shared the Coach of the Year award.

 

The team’s on-court performance has been average ever since that time. For the third time in the last four years, the Raptors are expected to miss the playoffs.

Like almost every NBA team, the Raptors are a continuous champion when it comes to their financial line, even in spite of their lackluster on-court performance. The organization’s earnings is commensurate with its Hall of Fame status.

 

Sportico ranks the Raptors as the ninth-most valuable club in the National Basketball Association with a valuation of US$4.11 billion. At a whopping US$8.28 billion, the Golden State Warriors are the best. The New Orleans Pelicans, the franchise with the lowest ranking, are valued at US$2.72 billion.

What is even more incredible is that the Raptors’ value has increased by 23% in the last year alone. Revenue for the team in 2022–2023 was US$347 million (Sportico), up $32 million from the previous year. The NBA’s revenue has increased overall, and additional money-generating opportunities are on the horizon.

 

The Dallas Mavericks are among the four basketball teams that have changed ownership in the last year, bringing attention to the valuations of basketball franchises. Mark Cuban sold the team’s controlling interest for a price of US$3.5 billion, which surprised many sports analysts and was viewed as a great deal by many.

The acquisition increased the worth of other teams in spite of the assumed discount. Revenue will surely continue to soar if a new media rights agreement is completed before the 2025–2026 season begins.

 

Forbes estimates that the media generates 50.47% of the league’s revenue, which is distributed equally among the 30 teams. According to the magazine, “the expectation of a substantial growth in media rights is the reason for the spike in sale price multiples.” At the moment, ESPN (Disney) and Turner Sports (Warner Bros. Discovery) jointly own the US rights for a total of US$2.66 billion a year, with an additional $500 million coming from overseas distributors.

NBA commissioner Adam Silver said, “Sports are almost the only programming that people actually care about watching live,” during a speech at the Goldman Sachs Alternatives Summit. The National Football League earns more money annually than the NBA does, but the NBA has been able to observe and learn from how the greatest league in the world navigated the changing media landscape to acquire its current record-breaking contract.

 

Including streamers in its current broadcast package startled a lot of people. Red Zone broadcasts on YouTube every week, while Thursday Night Football is available on Amazon Prime every week. On every medium, audiences are still expanding. There are still rumors that the NBA will offer streaming.

According to reports, Silver is requesting an annual package of media rights worth US$7 billion. Recall that the amount was $2.66B the previous year. Almost tripling that might not happen, but what if it did double instead? If five billion dollars were distributed equally across thirty teams annually, each team’s earnings would increase by roughly $150–160 million annually. The NBA teams’ biggest expense, player salaries, are currently capped at US$136 million.

Who then plans to become a national broadcast partner of the NBA? Turner and ABC/ESPN are not likely to give up their ownership, but according to John Ourand of Puck News’ Marchand and Ourand Sports Media Podcast, NBC is considering a comeback to NBA coverage, maybe bringing Peacock, its streaming service. There may also be a combination of YouTube, Apple TV, and Prime. Although Ourand argues that the streamers have adopted a “disciplined” bargaining strategy, people close to the NBA are certain that big tech will be included in the next rights deal.

Furthermore, the NBA’s expansion is beginning to take shape. In the next five years, Las Vegas and Seattle are probably going to join the league. Mexico City and Vancouver are long shots. As per Sportico, the expansion fee has the potential to increase up to $5 billion, which would mean additional revenue for NBA teams. But club owners would not have to split this money with players like they would with any other basketball-related revenue.

 

Team valuations are expected to soar due to a confluence of factors including growing international interest, recent franchise transactions, impending expansion costs, and the next big television rights deal.

“NBA teams used to deal at a 3–4x revenue multiple, but today they routinely trade at a 10x revenue multiple,” according to the Huddle Up newsletter. This is a prime example of the importance of a team like the Toronto Raptors, who are currently owned by Bell (the company that owns BNN Bloomberg), Rogers, and Kilmer Sports, together as Maple Leaf Sports and Entertainment.

 

Bell and Rogers were investing CDN$1.32 billion, or $533 million apiece, to acquire 75% of MLSE, according to a 2011 CTV News report. The Toronto Maple Leafs of the NHL were incredibly valued at US$2.65 billion in November 2023, the highest amount in the league. When combined with Major League Soccer’s Toronto FC and the Raptors, estimated by Forbes to be worth US$690 million, the owners have experienced a six-fold growth in their investment in just 12 years.

There will eventually be rumors that the Raptors are being sold or that the MLSE is being reorganized. It has just been five years since the Raptors won the championship, but the team’s supporters are still ecstatic and show no signs of waning, win or lose. The Maple Leafs’ final Stanley Cup victory dates back to 1967, indicating the longitudinal nature of the thesis of irrepressible team support.

 

The current owners will always feel that the Raptors are a true accomplishment.