It’s been a pretty good year for Joe & Clara Wu Tsai. Their New York Liberty won an WNBA championship and Barclays Center is the top grossing arena and even the Nets are doing well … financially.
It was only a year ago that Sportico reported that while the valuation of the Brooklyn Nets was rising, it wasn’t rising as fast as other NBA franchises. Blame the Big Three for that as well!
“The valuation probably got a little bit ahead of itself,” the author of the Sportico report, Kurt Badenhausen. said on a podcast last December, “All the excitement around the superstars coming to Brooklyn. Tickets were going crazy, the sponsors were beating down the door seeking sponsorships. Revenue is going through the roof … and then the bottom fell out.”
So, he tagged the team’s value at $3.98 million up from the $3.2 billion the Tsais reportedly paid in 2019. That put them at No. 13 on the Sportico list, down from No. 6 in 2021 when dreams of Kevin Durant, Kyrie Irving and James Harden dominating the NBA were at their peak. Sportico contended that of all 30 NBA teams, the Nets increase of 17% since 2020 — roughly three percent per year — ranked as the lowest and was well off the league average of 70%.
Not exactly woe is me, but certainly, it seemed, a hard lesson. Fast forward to February, two months later, when news broke that Julia Koch and her three children, heirs to the Koch Industries fortune built by the late David Koch and brother Charles, were buying a chunk of BSE Global, the Nets parent company. The deal, completed in June, quickly changed perceptions. The purchase, ultimately of a 15% stake in the Nets, New York Liberty and Barclays Center, for $688 million, jumped the valuation significantly.
And so, when the Sportico NBA valuation rankings were released Wednesday, there sat the Nets at No. 4 — a jump of nine spots — at $5.7 billion. So much for slow growth. As it turns out, a New York address is more important than three players who after all had played just 16 games together.
Only three teams — the Golden State Warriors, the New York Knicks and Los Angeles Lakers — rank higher, way higher as it turns out. The top ten:
You’ll note that the Nets have a slightly higher valuation than the NBA champion Boston Celtics or the Los Angeles Clippers who just opened their $2 billion Intuit Dome. As Badenhausen writes, Joe and Clara Tsai’s investment also had the biggest increase among the league’s 30 teams over the past year.an NBA-high of 43%.
Of course, there is some apples and oranges to the valuations. Sportico notes that that it values the teams to include real estate held by owners and team-related businesses, such as WNBA franchises. The Nets for example control Barclays Center and the WNBA champion New York Liberty, valued at $200 million in the Koch deal, while the Celtics are tenants at TD Garden and don’t own a WNBA club. On the other hand, the Celtics own a 20% share in NBC Sports Boston, per Badenhausen who got a look at the team’s prospectus for its upcoming sale.
Badenhausen notes that the banner year at Barclays Center was a big help to the Tsai’s fortunes.
The value of owning an arena was on display in the recent investment by Julia Koch and her family to buy 15% of BSE Global at a $6 billion valuation. BSE is the parent company of the Nets, New York Liberty and Barclays Center. In April, the Barclays Center was the highest-grossing arena in the world, according to Billboard, and it finished the year ranked sixth overall.
Indeed, per Sportico, NBA owners operated 10 of the world’s 20 highest-grossing concert venues in 2024, according to Billboard and can add more than $25 million to the bottom line of teams at top arenas, (Per Norman Oder, critic and chronicler of the Atlantic Yards/Pacific Park development project, things are good at Barclays, just not that good.)
With the valuation approaching $6 billion, Joe and Clara Wu Tsai have seen their faith in New York basketball, seen by many as too frothy, justified. Many thought what they paid Mikhail Prokhorov was too much.
Joe Tsai and Clara Wu Tsai bought the Nets and rights to the Barclays Center in stages, starting in 2018. The following year they consolidated ownership at a $3.3 billion valuation. It was the highest price ever paid for control of a U.S. sports team.
The valuation may jump again once the Celtics ownership completes its sale.
All eyes are on the auction of the Boston Celtics, which has bankers, investors and team executives speculating on price tags ranging from $4.5 billion to $6.5 billion. The final value will be influenced by how many people show up at the bidding and how much of the team they have to buy. The sale will give a window into what an elite brand that does not control its building is worth fresh off a championship. It is a unique setup. The Celtics and Lakers are the only teams among the top 10 in each of the four biggest U.S. sports leagues that don’t run their venues.
The Celtic ownership group, led by principal owner Wyc Grousbeck, purchased the franchise 22 year ago for $360 million, There is some quiet concern in the NBA, a league source told ND, that franchise valuations which have skyrocketed may bottom out in the near future with the Celtics sale seen as a litmus test. However, the underlying numbers keep getting better.
Citing three NBA executives, Sportico also reports the league’s new media rights deals will start pumping out new revenue streams next season. Each of the 30 teams will have their annual payout in Year 1 of the deal — 2025-26 — increase by 33% to $137 million, then another 13.5% in Year 2 followed by annual 7%increases for the remainder of the TV and streaming rights contracts. By the final season of the contract in 2035-36, each team will receive $297 million from the media rights deals.
So much for the concerns about declining ratings as well.
Also, as we and others have reported, the Tsai’s and BSE Global’s CEO Sam Zussman have ambitious plans for the area around Barclays, one modeled on LA Live!, the hugely successful entertainment district around Crypto Center in downtown Los Angeles. It could include a wide range of businesses from a hotel and conference center to a wine club and a media business, starting as early as next year.
Under estimating the couple’s ambitions seems like a bad investment.
- NBA Team Values 2024: Warriors, Knicks Lead as Average Hits $4.6B – Kurt Badenhausen – Sportico
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