Expanding the NBA

The National Basketball Association turns 68 this year. For most guys that age, expansion in all the wrong places seems inevitable. But the league has kept its trim, 30-team figure throughout its sixties, with the last new franchise having arrived in 2004. A recent discussion on the Phil Naessens Radio Show got us thinking about whether the NBA should add teams again, and, if so, where.

This summer, David Stern said : “I keep a little green book with a list of all the cities interested in NBA teams and could respond pretty quickly. There’s all kinds of stuff going on in Pittsburgh, Columbus, Louisville, Virginia Beach, Las Vegas, Vancouver, Mexico City, Kansas City.”⁽¹⁾

Of course, there were also rumors of contraction around the last labor negotiations ⁽²⁾ and the decision on what teams are in the league soon won't be Stern's. But the commissioner's list was specific enough that we can safely assume the league has not ruled out adding more members.

G. Scott Thomas wrote an article a couple years back at bizjournals.com where he cited On Numbers’ analysis of viable NBA expansion markets.⁽³⁾ The research used income available (factoring in money already conceivably spent on existing major pro teams in the market) to determine viability. It's a helpful, though not comprehensive, tool to use when evaluating cities.

Let's create some categories for cities that might be set up to host a franchise more successful than the Fort Wayne Pistons or Kansas City-Omaha Kings.

Big Media Market

Number one TV market New York City has the population base to sustain two teams even with competition from multiple franchises in every other sport and Kinky Boots on Broadway. National TV partners love big U.S. metro areas and the NBA has teams in 20 of the top 25.

Seattle is the clear front-runner for a team. It's the biggest market (#13) without a team, its NBA tradition runs from Jack Sikma through Shawn Kemp through Kevin Durant, and it has potential ownership in place. It faces competition for sponsorship dollars from three big teams (including the ultra-buzzworthy Sounders), but has only Major Junior hockey to compete with through a quarter of the year. Ok, this year it's a sixth of the year, but the Seahawks don't make the Super Bowl every season.

Tampa- St. Pete is the 14th biggest TV market, but On Numbers ranked it only 56th in available income due to competition. Top-30 competitive markets St. Louis, Pittsburgh, Baltimore, San Diego, Raleigh, and Kansas City also fared poorly on the available income index. Most of those markets do have suitable arenas available, but other than in Kansas City, the NBA team likely wouldn’t control important sponsorship revenue streams associated with them.

The top three areas on the On Numbers index don't add big markets for ESPN and TNT. Riverside-San Bernardino (1) and Bridgeport-Stamford, Connecticut (3) already occupy parts of the LA and NYC TV markets respectively.  Montreal (2) isn't a US TV market at all, being located in Canada, at least until the next Quebec independence referendum. Montreal could fit into category number three on this list, but how much might its francophonic hassles and frigid weather doom it as a destination for both free agents and league officials?

One-Team Cities

"Look at us, we've got a big league team which boosts our self-image!" say San Antonio/Portland/Oklahoma City. They may not be top-20 TV markets, but they love and support their lone big-league team, perhaps in part because it makes many residents of their city feel significant. With most large markets already in the league or out of the equation, most of the hopefuls probably need to convince the league that they're the next Spurs, sans the conspiracy theories about market-size-related playoff favoritism.

Louisville actually already has a hoops team that draws 20,000 fans a night⁽⁴⁾ and might beat the Bucks. In fact, the prospect of an NBA arrival has created controversy about a potential negative impact on the local scholar-athletes.⁽⁵⁾ When you're only the 49th biggest TV market, you might need to be more of a slam dunk.

The 42nd market ranked fourth on the income survey, but has, as Phil Naessens pointed out recently, a high population turnover. That perhaps mutes the one-team effect. Oh, and then there's the gambling. As long as the U.S. retains its schizophrenic wagering laws and its leagues maintain their healthy skepticisms of sports books, it's hard to imagine that what stays in Las Vegas could possibly be a major-league pro sports franchise.

Hartford made the income availability top ten and ranks as the biggest TV market (30) with no major league sports team. Connecticut has good college basketball tradition, but the market has a bit of an albatross. Or, to be more specific, a whale. The NHL's Hartford Whalers never averaged as many as 15,000 fans in a season.

Virginia Beach-Norfolk, ranking as the 45th TV market, has long been considered a potential target for pro leagues. With the closest teams in Washington (200 miles) and Charlotte (300 miles), it had the potential for regional rivalries without cannibalizing fans. It has ACC basketball tradition, and the closest franchise in the four top leagues is the NHL Hurricanes 185 miles away in Raleigh. Neither the International League's Tides nor the American Hockey League's Admirals have set any attendance records (like Oklahoma City did for CHL hockey pre-Thunder), so backers would have to show basketball would be different.

Austin, Texas placed well in income availability, has the 40th TV market, and profiles as a young, growing city. On the other hand, it's Spurs country, a UT Longhorn town, and the D-League doesn’t draw especially well there. There are no other major pro teams, though, so maybe the NBA would work in a northern suburb like Round Rock or Cedar Park. Those municipalities host, and built stadiums for, Triple-A baseball and hockey respectively. It's no sure thing, however.

Sexy Geography Market

This means somewhere the league wants to go to expand its marketing footprint. Another way to phrase it would be "a country whose initials are not "U" followed by "S" followed by "A."

Mexico City is a huge city that fits into this category. There's a lot to like, including an accessible time zone and some of the features of category 2. Smog, perceived crime, and language differences might make it tough to attract free agents. The failure to stage one game there this year might also be held as a negative when the league considers whether to award the market 41+.

Europe/Asia/Other Continents/Arctic Circle/Guam and any other non-North American aspirants would have to figure out how to deal with scheduling, travel, and a host of other issues. We opined on what the league should do in those markets in a whole nother blog post (spoiler alert : not promising in the near term).

Really Rich Dude Market

Mark Cuban said in November : “I just think the price of the expansion fee has to be so high that the NBA owners think, ‘OK, we’re crazy not to do it.' What that number is, I don’t know. But I’m open to it."⁽⁶⁾

Being open to receiving a large influx of cash has proven a sound financial strategy for Mr. Cuban. While we don't have a specific municipality in mind for this strategy, a buyer who leads with his wallet could overcome a lot of resistance. The structure of the deal matters as much as the dollar amount, however. You don't want to take crazy money upfront only to give it back through revenue-sharing because the Bentonville Walleyes couldn't draw or add to the value of the national TV and radio packages.

Politicians With Panache Market

If you can find a group of elected officials who either believe they're doing something civic-minded or just want free tickets, they can redistribute their way into becoming a viable choice for you. Free arenas, free development, free parades when you win the 2045 Dave Stern Trophy : who wouldn't want that? Maybe someday one of the other former NBA Johnsons (Ervin, Earvin, or one of the Eddies) gets elected mayor of Anderson, Indiana and makes a push for the return of the Packers, following Kevin's lead in Sacramento.

As with the previous category, you still have study the market. The NHL's Coyotes gladly accepted stacks of taxpayer cash to move to Glendale without remembering that their fan base lived and worked at the other end of Phoenix's traffic jams. If you expand and the team declares bankruptcy, you've done it wrong.

Does the Association need to expand? It's hard to say that it does. Unlike the NFL the NBA's national TV carrier have plenty of product to air.

The perfect storm might be a combination of an owner with the crazy money Cuban wants in a big market. Maybe it happens right about the time the league is negotiating a new national TV deal and needs that market to justify rate increases. Maybe it happens during a labor negotiation when the league can trade another team or two worth of jobs for player concessions on testing for the latest drug scare. Or maybe it happens because Amir, Vinnie, or Avery Johnson got elected to the Rochester city council and restarted the Royals. In any case, the NBA can afford to wait for its preferred scenario.

Like any business, a sports league wants to grow. That doesn't necessarily mean it has to add more teams. It can also mean adding more revenue streams from other sources. New media and international outreach might provide those without having to dilute the product, because while the world produces a lot of good ballplayers, adding roster spots can't help but thin the talent base.

Which brings us to a final potential market : Harrisburg, Pennsylvania. It ranks as TV market number 43, higher than Louisville or Hampton Roads. We mention it not so much because we consider it a viable candidate for a team, but rather because of what happened in a town in its DMA on March 2, 1962. On that night, playing for the Philadelphia Warriors before they moved to California, Wilt Chamberlain scored 100 points in a game in Hershey.  If expansion adds two or more teams worth of D-league and Euroleague defenders to the NBA, that record will drop like a 68-year-old's hairline.

Rush Olson has spent two decades directing creative efforts for sports teams and broadcasters. He currently creates ad campaigns and related creative projects for sports entities through his company, Rush Olson Creative & Sports.

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Footnotes

(1) “Stern includes Pittsburgh on short list of possible NBA expansion cities,” Pittsburgh Sporting News. http://www.pittsburghsportingnews.com/stern-include-pittsburgh-on-short-list-of-possible-nba-expansion-cities/ (accessed January 22, 2014).

(2) David Steele, “Is NBA contraction a legitimate possibility?” Sporting News. http://www.sportingnews.com/nba/story/2011-08-15/is-nba-contraction-a-legitimate-possibility (accessed January 25, 2014).

(3) G. Scott Thomas, “22 markets meet the NBA’s financial threshold,” The Business Journals. http://www.bizjournals.com/bizjournals/on-numbers/scott-thomas/2011/08/22-markets-have-nba-potential.html?appSession=300822721061063&RecordID=&PageID=2&PrevPageID (accessed January 22, 2014).

(4) Mike Rutherford, “Louisville Leads The Nation In Overall Basketball Attendance,” Card Chronicle. http://www.cardchronicle.com/2012/5/11/3014634/louisville-leads-the-nation-in-overall-basketball-attendance-cardinals (accessed January 25, 2014).

(5) Darren Heitner, “Why Louisville Should Top The List For An NBA Franchise,” Forbes. http://www.forbes.com/sites/darrenheitner/2012/12/18/why-louisville-should-top-the-list-for-an-nba-franchise/ (accessed January 22, 2014).

(6) Eddie Sefko, “Mark Cuban: NBA expansion will happen before relocation, if the price is right,” Dallas Morning News. http://mavsblog.dallasnews.com/2013/11/mark-cuban-nba-expansion-will-happen-before-relocation-if-the-price-is-right.html/?utm_source=twitterfeed&utm_medium=twitter&nclick_check=1 (accessed January 25, 2014).