NBA Considers Expansion: Seattle and Las Vegas in Sight
In December 2020, NBA commissioner Adam Silver announced that the league was evaluating the possibility of expanding, a topic that had been under discussion for almost two decades. Since then, there has been great anticipation surrounding this idea, and now, the NBA is heading towards the incorporation of two new teams. According to reports, the next meeting of the board of governors will include a vote to explore the addition of franchises in Seattle and Las Vegas starting in the 2028-29 season. We analyze the details of this process that could transform the league.Why Expand Now?
The expansion is an economic issue for the current 30 league owners. The key question is: when is it profitable to go from owning 1/30 of the league to 1/32? Currently, each NBA team owns 3.33% of the league. If two teams are added, that percentage is reduced to 3.13%. Although it seems like a minor change, these fractions add up over time, especially considering the league’s media rights agreements, such as the 11-year, $76 billion deal with Disney, Amazon, and Comcast. Expansion can be beneficial for owners if the expansion fees, which are not shared with the players and go directly into their pockets, are high enough. With team valuations on the rise, such as the sale of the Los Angeles Lakers for $10 billion last year, the figures the NBA could expect in expansion have also gone up. It is estimated that proposals could range from $7 to $10 billion.For example, if both teams are sold for a total of 15 billion dollars, the 30 current owners would immediately receive 500 million dollars each, a considerable incentive to move forward with the expansion.
Is the Expansion Definitive?
The expansion is likely to materialize. Within the league, the expected outcome has been considered for years, although it was not certain due to the resistance of some owners for economic reasons. However, when Silver announced in December that the decision would come in 2026, the belief within the league was that the expansion to Seattle and Las Vegas was almost inevitable. Although next week’s vote is not a binding resolution, something similar is likely to occur at the July meeting of the board of governors, during the Las Vegas Summer League.Do Players Have a Voice?
The decision on expansion rests solely with the board of governors and will require the approval of 23 of the current 30 owners. Although the National Basketball Players Association (NBPA) has a voice in many matters, such as the possibility of shortening the schedule, the addition of teams is not one of them. However, the idea of adding 30 more positions to the staff (36 including two-way contracts) is something the association would welcome.Why Seattle?
To correct a mistake from the past. Seattle has been the largest city in the country without an NBA team for almost 20 years, since the SuperSonics moved to Oklahoma City. Bringing a team back to Seattle in 2028-29, 20 years after the Thunder began playing in OKC in 2008, would become one of the defining events of Silver’s tenure as commissioner. For years, the problem with the NBA’s return to Seattle was the lack of a replacement for KeyArena, considered inadequate by the league as part of the Sonics’ move. This changed in 2021 when the renovated Climate Pledge Arena, home to the WNBA’s Storm and the NHL’s Kraken, opened.Why Las Vegas?
Vegas has become the unofficial 31st city of the league, with its annual Summer League that has grown in the last decade to become the NBA’s version of Comic-Con, a massive event that attracts hundreds of thousands of fans each July. In addition, during the first three years of its existence, Vegas hosted the championship round of the Emirates NBA Cup. Las Vegas has experienced a boom in sports popularity in recent years, with the arrival of the Raiders from Oakland in 2020, the Aces from San Antonio in 2018, the Golden Knights entering the NHL as an expansion team in 2017, and the Athletics of MLB eventually arriving from Oakland (via Sacramento).Could Other Cities Try to Get a Team?
Several cities have received attention as possible candidates, from international locations like Mexico City, Vancouver, and Montreal to US cities like Kansas City, Louisville, and Nashville. Perhaps a European division will be possible in the future, but not before significant changes in air travel make it more feasible. However, none of them are likely to surpass Las Vegas or Seattle.Would Seattle be the SuperSonics? Would it retain the pre-2008 history of that franchise?
In short: yes. The agreement between the Thunder’s ownership and the city of Seattle that resolved a lawsuit over the team’s stadium lease and allowed its move to Oklahoma City stipulated that the SuperSonics name and all associated logos, colors, and trademarks would be transferred to the owner of a new NBA team approved to play in a renovated KeyArena at no cost. That agreement established the terms of the shared ownership of the Sonics’ history, including the team’s 1979 championship trophy and retired jerseys. Officially, the NBA combines the history of both teams. For example, the league recognizes Hall of Famer Gary Payton as Oklahoma City’s all-time leader in games played. However, the Thunder do not hang any SuperSonics banners in Oklahoma City, and in their media guide they do not highlight any Seattle statistics, for example including Russell Westbrook as the team’s all-time assists leader, instead of Payton. If a team were to return to Seattle, the Thunder would cede the Seattle history to the SuperSonics, just as the NBA’s Charlotte Hornets reclaimed the history of the Charlotte era from the New Orleans Pelicans when Charlotte regained the Hornets name in 2014.If Two Teams Are Added in the West, What Will Happen to the Conferences?
Seattle and Las Vegas would be in the West, which would require a franchise to move from West to East to rebalance the 17-15 division. The decision would likely be between three teams: the Minnesota Timberwolves, the New Orleans Pelicans, and the Memphis Grizzlies. Geographically, New Orleans and Memphis are the most eastern teams in the Western Conference, but they are a short flight away from several Western opponents (including the three Texas teams and the Thunder). Minnesota is further west, but geographically more isolated. The Timberwolves’ closest Western opponent, the Denver Nuggets, is 680 miles away. Six Eastern cities (Milwaukee, Chicago, Indianapolis, Detroit, Cleveland, and Toronto) are within that range. It’s likely to be a prolonged struggle to determine who would move East, but those facts seem to make Minnesota the most logical option.What Impact Could Expansion Have on the Playoffs and NBA Cup Formats?
Regarding the playoffs, increasing to 32 teams shouldn’t change anything. Ten teams would qualify for the postseason, six directly and four for the play-in tournament. Six teams, instead of the current five, would go directly to the draft lottery. However, expanding to 32 teams could result in positive changes for the NBA Cup. Currently, the league divides the group stage of the tournament into six groups of five, which means that not all teams can play on the last day of the group stage, because there is an odd number of teams in each group.A 32-team group would allow the NBA to replicate the FIFA World Cup format of 32 teams: eight groups of four teams, each of which would play against the others once. Then, the NBA could have 16 teams advance to the knockout phase of the tournament, taking the top two teams from each group (as the World Cup does), or it could have the winner of each group advance and have the same knockout phase format it has now.
Will There Be Changes in the Rules Compared to Previous Expansions?
The NBA is expected to closely analyze the entire expansion process, for example, how an expansion draft would work, the restrictions that teams would have on spending in their first years of existence, and what the rules governing their draft picks would be, before a formal vote to expand takes place. The league will be balancing both not making it so difficult for incoming teams that they have no chance of competing for years, and not giving them a huge advantage over their competition by entering with a clean slate to start working. There will be extensive discussions over the coming months about how all this will be.How Could the Expansion Draft Work?
During the 2004 expansion that brought the Charlotte Bobcats (now Hornets), existing NBA teams were allowed to protect up to eight players under contract for the following season from being selected. The previous expansion draft rules required a team to leave at least one player unprotected, even if the team had fewer than eight players under contract at the start of the offseason. Those with options to become free agents count towards that total, and if selected, the player’s former team would receive a trade exception for the amount of that player’s salary in 2028-29. Teams were also allowed to protect players who could become restricted free agents, but the previous expansion draft rules did not transfer RFA status to the expansion team. The team that selected would run the risk of losing a player for nothing. (However, the player would not be allowed to re-sign with his original team). In previous expansion drafts, teams were allowed to select only one player from each existing NBA franchise. There were no two-way players in 2004, so the league will need to determine if they can be protected in a future expansion draft. Each two-way player whose contract expires normally becomes a restricted free agent. One thing to note is that the NBA and the NBPA would operate under the current collective bargaining agreement, which runs through the 2029-30 season. However, there is a provision that allows either party the option to terminate the collective agreement on June 30, 2029, if notice is given on or before October 15, 2028.What Can Be Learned from Previous Expansion Drafts?
In 1995, the Toronto Raptors and the Vancouver Grizzlies alternated in the selections until they selected a player from each of the other 27 existing NBA franchises. The two teams did a draw to determine who would select first. The Grizzlies won the draw, but chose to defer, giving them the second selection in the expansion draft. Because of that, the Grizzlies were able to pick higher than the Raptors in the 1995 NBA draft. The Raptors finished the expansion draft with 14 players and the Grizzlies selected 13. In 2004, Charlotte could have selected 29 players (one from each team) in the expansion draft, but chose 19. The Charlotte front office took an approach in 2004 of selecting players who were restricted free agents. Of the 19 players Charlotte selected (a minimum of 14 was required), nine were restricted free agents. The only one of those nine who re-signed with Charlotte was Tamar Slay. The standard roster rules during the regular season and the offseason will likely apply: a team can have up to 21 players in the offseason and 18 (including three with two-way contracts) once the regular season begins.How Do Expansion Teams Influence the League Draft?
The NBA has placed each expansion team in the first round, with Vancouver selecting sixth and Toronto seventh in 1995 and Charlotte choosing fourth in 2004. In that draft, the Bobcats traded with the Los Angeles Clippers to get the second overall pick (Emeka Okafor).None of the recent expansion teams have been eligible for the number 1 pick in their first year. When the Raptors and Grizzlies entered the league, they were also ineligible for the number 1 pick in their second season. The Raptors won the draft lottery in 1996, but couldn’t pick first, so the number 1 pick went to the Philadelphia 76ers (who selected Allen Iverson).
How Could the Salary Cap Work for Expansion Teams?
Each expansion team has to work within a reduced salary cap during its first two seasons. In July 2004, the Bobcats had $17.6 million in player salaries and were $11.8 million below the salary cap of $29.4 million at the start of free agency.If an expansion team were to enter the league for the 2028-29 season, using that 66.6% figure, that team would be working with a salary cap of $121.9 million, compared to a projected cap of $183 million for the league’s 30 existing franchises. The team would have 80% of the salary cap available the following season and the full cap available for year 3.
An expansion team will be required to spend 90% of its lowest salary cap of $121.9 million on the first day of the regular season to reach the league-mandated salary cap. Teams can select a player in the expansion draft and then waive him without his salary counting towards the cap, and that money still applies to the salary cap.
