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In a recent announcement, NBA Commissioner Adam Silver stated there is no foreseeable pathway for sovereign wealth funds to gain controlling ownership of NBA franchises.
A Path Yet Uncharted
Speaking at the Associated Press Sports Editors convention, Silver expressed, "I don't want to say what could ever happen, but there's no contemplation right now." His comments came during an in-depth question and answer session, shedding light on the league's views regarding team ownership structures.
The Commissioner emphasized the significance of having individuals in control of the teams, underlining their responsibilities towards fans, partners, and players alike. "It's very important to us that there be a person [in charge]," Silver said.
This stance, he added, is independent of the specific source of funds, including those from sovereign wealth funds. The fundamental goal is to maintain and cultivate a profound connection with the community, the players, and the NBA's partners.
No Bubble in Sight
When questioned about the potential inflation of franchise valuations, Silver dismissed the idea. He pointed to the robust revenue generation and growth opportunities in the league, along with its global market appeal, as reasons for the continuing high valuations. "I think a bubble would be indicative of sort of irrational valuations," Silver said, adding, "I don't think there's anything irrational at all." The Commissioner also provided an insight into why investment opportunities have been opened up to private equity firms and sovereign wealth funds.
He explained, "In part, the reason why we've opened up investment opportunities to private equity firms, sovereign wealth funds, is because we're running out of individuals, frankly, who are in a position to write those kinds of checks, and especially when you're not going to be the control owner of the team." Silver's comments provide a clear picture of the league's current stance on team ownership.
While the financial landscape is always evolving, it is clear the NBA remains committed to ensuring that franchises remain connected with their communities and accountable to their stakeholders.
