A Billionaire Buys Up Brooklyn (And It’s Not Jay-Z)
By Taylor Durham
The New York Knicks are valued at $4B, the highest in the league
Michael Jordan is the only Black majority owner in the NBA
The NBA has spent the last several years trying to expand its presence internationally, even supporting and investing millions in a professional league in Africa. All that extensive marketing and outreach may have paid off for the NBA as the Brooklyn Nets were recently acquired by Joe Tsai, the co-founder of Alibaba (BABA +0.18%) for a record-breaking $2.35 billion. The team with the worst attendance in the league came with the highest price tag to date.
Why This Matters: The league has very few foreign owners, let alone minority owners, and none that command the spotlight as Tsai soon will. His presence as an owner will draw a new fan base in China. Here in the U.S., players have voiced concerns over the term “owner” and its roots in slavery, calling for teams to use the titles to CEO or chairman. With Tsai, the league could show its open to minority owners, given that more than 75% of the players are black but the majority of owners are white. Michael Jordan is the only Black majority owner in the NBA.
Tsai already owned 49% of the franchise and this new deal ensures 100% ownership. The acquisition of Kevin Durant and Kyrie Irving in the offseason has already seen ticket prices jump 10-15% ahead of the season, with the hope the duo will turn the fledgling franchise into a contender.
The average NBA team is valued at $1.9 billion, that’s up 13% from just a year ago. Teams benefit from shared revenue agreements for media coverage, licensing, and sponsorships. Joe Tsai buying the Brooklyn Nets is a dream come true for the league, which has been seeking to grow its presence in China. Having the co-founder of the Chinese equivalent of Amazon (AMZN -0.40%) become an outright owner is great optics.
Situational Awareness: Tsai’s ownership plays well for the NBA in China but when most of the players are Black, the league should consider attracting high-profile entertainers and business owners to reflect the racial makeup of its organization. The NFL has the Rooney Rule, which requires teams to interview minority applicants for senior leadership positions, including ownership. Perhaps the NBA should follow suit.
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