In recent years, the NBA has been seeing some great growth, especially on the money side. League-wide revenue is breaking records, team valuations are through the roof, and players are getting bigger paychecks every season. To see an organization with such financial success must be great for ownership and everyone with a stake in the league – but what exactly is the ownership scheme of the NBA?
What company owns the NBA? The NBA is not owned by a company or some other private, separate entity – instead, it is owned by the team franchise owners as part of a consortium. Currently, there are 30 owners (reflecting the current number of NBA franchises). Each team owner holds an equal share, and they all sit on the Board of Governors. The team owners appoint a commissioner (a CEO of sorts) to manage league affairs. The current NBA commissioner is Adam Silver.
What do team owners do?
The owners are essentially a team’s pockets. Any sort of investment into a franchise, such as investing in the stadium, the staff, the salaries, comes from the owner. Investment into a team and its operations can yield a huge improvement in organizational performance, and if the results reflect positively on the court, the owner can see a solid return on investment. Other owners (much to the fury of fans) may choose to invest in areas, such as branding and sponsorships, that will net them a monetary return, leaving the basketball operations unfulfilled and potentially worsened.
Owners are often a face of a franchise, and can be heralded as the harbinger of success or criticized by media and fans for their incompetence and greed. Some owners like to be hands-on, a famous example being Mark Cuban, owner of the Dallas Mavericks. Other owners like to sit back and let executives and GMs handle everything. Just as degree of involvement varies between owners, so does degree of association: some owners like Cuban and Steve Ballmer (owner of the Los Angeles Clippers) can often be found courtside at games. Other owners appear to be mysterious to the public due to their lack of association, verbal or physical, with the team.
The team owners make their money based on the performance of the organization. If a franchise is profitable after all expenses are cut from the basketball-related income, owners are entitled to their dividends (some owners may take a cut of the money despite losses). Moreso, owners can sell percentages of their stake, or the whole of it, for a big sum of money. Owners can also make money if they have extra revenue sources related to the franchise (for example, owning the arena the team plays in or the parking areas in the area).
List of NBA Team Franchise Majority Owners
|NBA Franchise||Majority Owner||Operating Entities||Owned Since|
|Atlanta Hawks||Tony Ressler||Hawks Basketball, Inc.||2015|
|Boston Celtics||Wyc Grousbeck||Boston Basketball Partners||2002|
|Brooklyn Nets||Joseph Tsai||J Tsai Sports||2019|
|Charlotte Hornets||Michael Jordan||Hornets Sports & Entertainment, Hornets Basketball Holdings, LLC||2010|
|Chicago Bulls||Jerry Reinsdorf||Chicago Professional Sports Limited Partnership||1985|
|Cleveland Cavaliers||Dan Gilbert||Cavaliers Entertainment LLC||2005|
|Dallas Mavericks||Mark Cuban||Dallas Basketball Limited||2000|
|Denver Nuggets||Ann Walton Kroenke||Kroenke Sports & Entertainment, Denver Nuggets Limited Partnership||2000|
|Detroit Pistons||Tom Gores||Palace Sports & Entertainment, Detroit Pistons Basketball Company||2011|
|Golden State Warriors||Joe Lacob||GSW Sports LLC||2010|
|Houston Rockets||Tilman Fertitta||Fertitta Entertainment||2017|
|Indiana Pacers||Herbert Simon||Pacers Sports & Entertainment, Pacers Basketball, LLC||1983|
|Los Angeles Clippers||Steve Ballmer||LAC Basketball Club, Inc.||2014|
|Los Angeles Lakers||Jeanie Buss||The Los Angeles Lakers, Inc.||1979|
|Memphis Grizzlies||Robert J. Pera||Memphis Basketball LLC||2012|
|Miami Heat||Micky Arison||Miami Heat Limited Partnership||1995|
|Milwaukee Bucks||Marc Lasry||Milwaukee Bucks, Inc.||2014|
|Minnesota Timberwolves||Glen Taylor||Minnesota Timberwolves Basketball Limited Partnership||1995|
|New Orleans Pelicans||Gayle Benson||New Orleans Pelicans NBA Limited Partnership||2012|
|New York Knicks||James Dolan||The Madison Square Garden Company, New York Knicks, Inc.||1997|
|Oklahoma City Thunder||Clay Bennett||Professional Basketball Club LLC||2006|
|Orlando Magic||Dan DeVos||RDV Sports, Inc., Orlando Magic, Ltd.||1991|
|Philadelphia 76ers||Joshua Harris||Philadelphia 76ers, Inc.||2011|
|Phoenix Suns||Robert Sarver||Suns Legacy Partners, LLC||2004|
|Portland Trail Blazers||Jody Allen||Vulcan Inc., Trail Blazers, Inc.||1988|
|Sacramento Kings||Vivek Ranadivé||Sacramento Kings Partnership Group||2013|
|San Antonio Spurs||Peter Holt||Spurs Sports & Entertainment, San Antonio Spurs LLC||1993|
|Toronto Raptors||Larry Tanenbaum||Maple Leaf Sports & Entertainment, Toronto Raptors Basketball Club||1998|
|Utah Jazz||Ryan Smith||Jazz Basketball Investors, Inc.||2021|
|Washington Wizards||Ted Leonsis||Monumental Sports & Entertainment||2010|
Why do people decide to become team owners?
Many owners have little to no interest in actively owning an NBA team or being publicly associated with their team either. Furthermore, NBA teams aren’t inherently profitable, so they aren’t always a sound investment for profit generation. So, why do these owners end up spending what could be a small fortune on buying an organization they aren’t particularly interested in running, and for what could very well end up being an unprofitable venture?
There are two reasons, the first one being the value of the franchise. Many franchise owners have bought their franchises anywhere from a few years to even decades ago. The growth of the NBA, and the increase in the team’s value, means that owners are sitting on a valuable asset. If the owners were to sell, they could make a fortune from just the sale; more than enough to cover any losses they incurred over the years.
A great example is Jerry Reinsdorf, owner of the Chicago Bulls, who bought a majority stake in 1985 for $9.2 million. The Chicago Bulls are currently valued at north of $4.1 billion. That is an extremely incredible return, and should the NBA and the Bulls continue to grow, that valuation will grow. Having such a valuable asset, and with many potential buyers in the market, is why owners decide to hold on for as long as they need.
The second reason is slightly controversial but true nonetheless: sports team owners get big tax breaks. While the depths of tax laws and the workings of the IRS are not worth getting into now, the point remains: team owners can use sports teams to get sizable tax write-offs, according to an in-depth report from ProPublica. One (perfectly legal, to be clear) method is that when buying a team, owners can use amortization (because a franchise consists of “assets”, they are considered to depreciate). Therefore, many teams who are profitable record losses for tax purposes to get big tax breaks.
For the people who do choose to become active and involved team owners, it’s because they have a personal interest in the franchise or the sport itself, beyond just monetary gains. Owners like Cuban and Ballmer have an undeniable love for basketball; so does Joe Lacob, owner of the Golden State Warriors. Most owners also understand that investing in basketball operations should end up yielding better returns, so they involve themselves in decision making that could get them as much money as possible.
This is often a mixed success, as some owners try and fail, but nonetheless try. Sometimes they are even successful in a different way; a classic example is James Dolan owns the New York Knicks, who have been a poor performer on the court for several years now. However, they are consistently valued as one of the top franchises in the NBA. So while Dolan gets his money, he remains involved in basketball decisions, which hasn’t gone so well for Knicks basketball.
The NBA is one of the biggest sporting organizations in the whole world. Team owners can get their piece of the ever-growing pie by just holding a stake in the team, without holding any sort of interest or association with the team. While it is frustrating for fans, it’s still true that owners are still instrumental to a team’s long-term success or failure.