For Sale: A Seattle Sports Empire
If you have $17B lying around, you and your richest friends could buy the two most valuable teams, in the two most valuable leagues, in one of America’s largest cities.
Welcome back to Club Sportico, where we discuss the intersection of sports and money—with humor and opinion. Today we’re talking about the Emerald City.
The NBA is officially soliciting bids for a new franchise in Seattle. After years of casual discussion and much speculation, commissioner Adam Silver announced this week that owners had greenlit the league’s first expansion since 2004.
The Seattle Seahawks are also on the market. Shortly after winning the Super Bowl last month, the trust that owns the NFL team announced it was finally ready to sell. That was the stated wish of late owner Paul Allen, who died in 2018.
Taken separately, both the Seahawks sale and the NBA’s expansion would be massive stories in our industry. The Seahawks will be the most expensive NFL team ever sold; any new NBA franchises will be among the most expensive basketball teams ever sold. Both offer the rare opportunity for one of the world’s richest people to buy into one of its most exclusive clubs.
They also offer the unprecedented opportunity to do both! We racked our brains at Club Sportico and couldn’t think of a single instance where NFL and NBA teams were available at the same time, in the same city. A Seattle sports empire is on the table for one very rich human, who has good credit and a lot of rich friends.
There are myriad reasons this won’t actually happen. For one, it’s a lot of money. Also, buying a sports team is hard, let alone buying two, via two separate processes, at the same time. The Seahawks sale is being run by bankers at Allen & Co., while NBA expansion will be handled by bankers at PJT Partners. And while I believe that any owner the NFL might approve would also pass the NBA’s muster, expansion processes typically play out differently than estate sales.
It also would be almost entirely unprecedented. Believe it or not, in this era of Sports Empires™️, there is only one NFL owner who also owns an NBA team in the same city. (Click here for the answer -->1 ) Others are close— Stan Kroenke owns the Los Angeles Rams and the Denver Nuggets, Josh Harris owns the Washington Commanders and co-owns the Philadelphia 76ers, Jimmy Haslam owns the Cleveland Browns and a big chunk of the Milwaukee Bucks—but those portfolios all spread across multiple states and were built over multiple years.
The biggest hurdle, of course, is the money. Sportico values the Seahawks at $6.59 billion, but the team will certainly sell for more. For our purposes today, let’s call it $9 billion. NBA expansion fees also haven’t been set, but $8 billion doesn’t seem out of the question. Owning Seattle’s NFL and NBA teams could cost $17 billion.
According to Bloomberg, there are about 150 people in the world worth $17 billion. Nearly a dozen of them already own NFL and NBA teams. Another chunk wouldn’t pass either league’s background check, and many more lack the liquidity (or interest) to pay anything close to that price. It’s a small pool.
Of course it wouldn’t require one person’s $17 billion to pull this off. Most modern sports teams are purchased by consortiums, and every league has its own rules about how exactly those groups can come together.
The NFL has a strict debt limit for new buyers of about $1.5 billion, and new control owners must purchase at least 30% of the equity in cash. After that, the group can have up to 24 minority partners, including institutional funds that take up to 10% of a team.
The NBA’s rules are a bit different. The debt limit is $475 million (there’s no special designation for new buyers), and the league also limits the number of owners at two dozen. Most notably however, the NBA allows institutional funds to own up to 30% of a team and the lead owner only has to buy 15% of the equity.
So let’s say the Seahawks sell for $9 billion and the Seattle NBA expansion team sells for $8 billion. Under those guidelines the NFL buyer could take out $1.5 billion in debt, then pay the minimum of $2.25 billion in cash. The buyer could raise $750 million from institutional funds, which leaves another $4.5 billion sprinkled across the rest of the consortium.
For the NBA buyer, the maximum $475 million in debt and $2.26 billion in institutional partners would require $1.13 billion in cash with another $4.13 billion to be spread across the humans in the group.
Now let’s combine them. To acquire this Seattle sports empire, at those prices, a buyer could take a maximum $1.975 billion in debt. After that he/she would need to put down at least $3.38 billion in cash. Add the maximum $3 billion in private equity money2, and what’s left is about $8.6 billion to be paid by humans. It wouldn’t be this clean, but for reference, that’s an average of $358 million (!) across 24 other limited partners.3
People are already lining up to bid for the two teams, but I haven’t heard of anyone actively looking at both. The front-runner for the NBA franchise appears to be the owners of the Seattle Kraken. In addition to the NHL team, they just secured majority ownership of Climate Pledge Arena, and earlier this week announced the creation of a new umbrella company called One Roof Sports and Entertainment, which—how convenient!—will “oversee a growing portfolio of properties and fuel new opportunities.”4
On the Seahawks, I think things are wide open. Jeff Bezos ($232 billion net worth) and Steve Ballmer ($131 billion) both loom large over the process, since they have ties to Seattle and the financial heft to buy the team without batting an eye. I’ve heard contradicting things on both, but my hunch is that Ballmer is more likely than Bezos.
Ballmer already owns an NBA team in Los Angeles. Bezos does not. Does he want to own sports in Seattle? If so, the Emerald City Empire is on the table.
On the most recent Sporticast episode, Eben and Scott discussed the new WNBA labor deal 👇
Club Sportico is a community organized by Sportico, a digital media company launched in 2020 to cover the business side of sports. You can read breaking news, smart analysis, and in-depth features from Eben, Jacob and their colleagues at Sportico.com, and listen to the Sporticast podcast wherever you get your audio. Contact us at club@sportico.com.
Gayle Benson owns the New Orleans Saints and Pelicans.
While the NBA allows other types of institutional owners (like sovereign wealth or pension funds) the NFL has only approved a handful of private equity firms.
In this scenario, the lead owner would almost certainly have to put up a lot more of his/her own money.
The Vegas buyer is also up in the air. For years, most people in our industry assumed it would be Fenway Sports Group, and their sale of the Penguins last year seemed specifically aimed to free up cash for an NBA move, but ESPN reported last week that they’re out.