Rovell: Sports Betting Will Skyrocket NBA Franchise Valuations Even Higher

Rovell: Sports Betting Will Skyrocket NBA Franchise Valuations Even Higher article feature image
Credit:

Kyle Terada-USA TODAY Sports. Pictured: NBA commissioner Adam Silver

  • Forbes recently released its updated list of NBA franchise values, but failed to factor in the growth of legalized sports betting.
  • Darren Rovell explains why NBA franchises are in the perfect spot to take advantage of sports betting going forward.

There was one surprise in Forbes’ newest NBA franchise valuations that were released on Wednesday: No mention of what sports betting has done or will do to values.

NBA team values have gone up 13% year-over-year, according to Forbes, nearly doubling the next-fastest growing league, Major League Baseball (7%).

But there’s reason to think the NBA is just getting started.

The NBA, more than other leagues, is also well positioned to make the most money off betting — at least at this time.

That’s because NBA commissioner Adam Silver has been at the forefront of the space, which means that the league has the best odds to cash in on legalized sports betting.

Sure, the NFL has a much stronger betting product, but the NFL hasn’t accepted gambling yet. Hockey might make itself more relevant, but the NHL knows it will be challenged to make a significant dent.

And Major League Baseball knows that the time of the game is actually on its side for once, but that things must be simplified to entice a casual bettor.

Betting the NBA is relatively easy and self-explanatory, and the league is simply more progressive. It signed the first data and sponsorship deal with MGM before baseball and hockey did copycat deals. And it has signed two other data/sponsor partnerships, proving that the data business — which some have doubted as a real business — could lead to a boon of hundreds of millions of dollars.

The NBA has done the most testing with the future. The league authorized NBC Sports Washington to have eight alternate broadcasts in which fans can predict outcomes for money.

It’s also allowed the Sacramento Kings to update a predictive gaming app that includes placing hypothetical bets on points and rebounds and other elements of the game. Since no purchase is necessary and prizes, not cash, come back, it’s allowed in California.

But the big money for these franchises is what gambling does to the television bidding.

Talks with ESPN/ABC and Turner/TNT will begin in earnest in 2022, two years before the deals are up. By 2022, betting be out of its nascency, and it’s likely that more than half of the United States will have legalized it.

Broadcasts will automatically become more valuable, not only because there will be more eyeballs, but because the rights-holders can easily find a way to get a cut of the betting action.

Then there are new competitors that would be better at seamlessly weaving betting into the broadcast. Amazon and Apple have free cash floating around and they’re the experts in one-click (Amazon) and micro payments (Apple).

So not only is there more return, as the cable model is dying, but there are more real competitors for the product.

While it’s not clear if betting can bring more fans into arenas — being there live and in person is not necessarily seen as essential to the bettor — and how gambling related revenues will have to be split with the players, there’s no debate that the economics will be even better.

Being the league that embraced gambling with open arms from the very beginning will make the NBA and its franchises big winners moving forward.