The Phoenix Suns
© Mark J. Rebilas – USA TODAY Sports
After a lot of pressure from all sides, most importantly the sponsors, Robert Sarver decided to sell the Phoenix Suns (and Mercury). Ramona Shelbourne already mentioned the biggest names possible as potential bidders – Jeff Bezos, Larry Ellison, and Laurene Jobs, to name a few. The first predictions that came out had the Suns around $2.5 to $3 billion. The Ringer’s Bill Simmons thinks it’s gonna be a lot more than that.
Only 8 franchises
The NBA expansion is only a matter of when at this point. We will soon have 32 teams in the league, and it seems that Seattle and Las Vegas are going to be very happy. So in the near future, there are going to be 32 teams to own and a lot more billionaires that would like to have them. That’s why the combination of a lot of people making absurd amounts of money in the last decade and not a lot of teams being up for sale, dramatically increased the price tag for an NBA team.
- The Rockets went for $2.2. billion in 2017
- The Nets went for $2.35 billion; with the arena, it went up to around $3.4 billion in 2018
- The Jazz went for $2 billion in 2020
- The Wolves $1.5 billion in 2021
The Wolves didn’t go for under $2 billion just because they are in Minnesota; it seems Glen Taylor really wanted to sell to A-Rod and threw in a discount to help him close the deal. Bill Simmons thinks the floor for an NBA team, any team, is $2 billion. If you don’t have that, don’t even try calling. But according to Simmons, there are only a handful of teams that are really worth having.
“There are only 8 truly incredible NBA franchises to own. The Lakers, the Knicks, the Warriors, the Bulls, the Celtics, the Mavericks. I would throw in the Heat because of the organization they built, the location, the fact they’ve always been able to get good players and there’s just a ton of money in South Beach. That’s seven, and the Suns are eight. What’s interesting about that? The Suns are the only ones that are going to be available out of those eight,Simmons explained.
The Boston sports guy pointed out that he didn’t have the Clippers or the Nets on the list despite the fact that they are in the two largest markets in the NBA. Being the second team in LA and NYC isn’t as great as being the only team in Phoenix. Why is that?
“Phoenix is a rich guy mecca. Incredible fans, you have a whole history, you got Devin Booker in place. But the big thing – it’s an hour from LA and it’s an hour from the Bay area. You can pull in every rich guy from those two spots and they can fly in and be the owner of the team.”
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Despite the criticism the Kardashians have been getting for taking 15 min private plane rides, billionaires measure distance in those terms. Bucks owners are New York finance guys who fly to Milwaukee for home games. Steve Ballmer still lives in Seattle and flies to LA whenever he needs to.
And on top of everything else, owning an NBA team elevates you from a billionaire to a billionaire. Owning one of the eight makes you globally recognizable. Simmons calls it an ego tax. Have you ever heard of Joe Lacob before he bought the Warriors? Exactly.
Combine all that and you get a wild prediction.
$5 billion
Insiders like Brian Windhorst predicted the price would be somewhere in the $2.3 to $3 billion range. Given the prices the Rockets, Nets, Jazz, and Wolves went for, it seems like a reasonable prediction. But given his “only 8 teams” theory, Simmons thinks that’s way too low.
“This evaluation is going to go way higher than people think. I told you this with the Clippers eight years ago, and I’m telling you now. The Suns are going to be valued at over $4 billion. Mark my words, you can throw it in my face if I’m wrong; I’m not wrong. I think it can get close to 5 billion. I think it will be in the $4.5 to $5 billion range.”
Sarver owns around a third of the Suns. He has the option to make all the other owners sell their shares as well, or he can just sell his part of the team. If the Suns were to go for $4.5 billion, that means Sarver would get around $1.5 billion for his share.
If Sarver sells for such a high number, Simmons predicts there will be owners who will start to wonder about selling their team as well. If you don’t have a succession plan in place, and you’re at the back 9 of your life, you want to sell at the peak. This might be it.
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