Forbes released their annual valuations of all 30 NBA teams. Did the Chicago Bulls rise at all since the 2019 NBA team values were released?
Forbes released it’s annual valuations of the 30 NBA teams for 2020, and it didn’t show that much of a difference from last year’s list. The Chicago Bulls slotted as the fourth most valuable franchise in the NBA, at $3.2 billion. But the Bulls did fall in line behind the third place Golden State Warriors by a good margin, nearly one-billion dollars.
The top two teams in terms of franchise value on Forbes’ list this year were the New York Knicks ($4.6 billion) and the Los Angeles Lakers ($4.4 billion). And just behind the Bulls in fifth place were the Boston Celtics ($3.1 billion).
It is always intriguing to see the factors taken into consideration for these valuation lists for top professional sports leagues like the NBA.
Here’s what Kurt Badenhauser of Forbes had to say on the overarching valuations of the top teams in the NBA this year and the factors that went into figuring out the list.
Non-basketball factors are also at play. With the S&P 500 up 80% over the past five years, NBA teams remain a diversification option for those looking to pare down their stock holdings. The high stock market valuations have helped boost the prices for teams. Buying a team can also be a great tax break because tax law typically requires the amount of a purchase price of a business allocated to intangibles (often the vast majority with sports team acquisitions) to be amortized over 15 years. Such deductions can offset other taxable income.
By our scorecard, the moribund New York Knicks grab the top spot ($4.6 billion) for the fifth straight year, up 15%, followed by the Los Angeles Lakers ($4.4 billion) and the Golden State Warriors ($4.3 billion). These three teams have by far the highest revenue in the NBA. Only the Dallas Cowboys ($5.5 billion) are worth more than the Knicks among North American sports franchises, with the New York Yankees ($4.6 billion) the only other team ahead of the Lakers and the Warriors.
In addition, teams in New York and Los Angeles go for sky-high revenue multiples. Recall that Steve Ballmer paid 14 times revenue for the Los Angeles Clippers in 2014. Tsai paid 11 times revenue for the Nets. The revenue multiple that billionaire Tilman Fertitta paid for the Houston Rockets in 2017 was a relatively cheap seven.
Two of the fast risers on this list were the Brooklyn Nets ($2.5 billion) and the Los Angeles Clippers ($2.6 billion). And two of the teams that declined pretty rapidly in team value, largely thanks to the losses of big time stars like LeBron James and Kevin Durant, were the Cleveland Cavaliers ($1.51 billion) and the Oklahoma City Thunder ($1.575 billion).
The unexpected factor that went into the Bulls valuation this year is the growth despite growing impatience with the fans and poor play on the court. The Bulls were one of the NBA’s worst teams over the course of the last two seasons, but the growth of their franchise value sat at $300 million. According to the 2019 Forbes valuation of the Bulls, their value went from $2.9 billion to $3.2 in the last calendar year.
The top five most valuable teams remained the same in the NBA valuations list over the last two calendar years. The Warriors actually had the highest percentage growth among the top five teams, though, despite their bad record this season.