Adam Silver: Seattle's hopes on hold

February 12, 2014, 12:10 PM

— -- In his first official days on the job, NBA commissioner Adam Silver is holding to a stance that the league is not ready to add an expansion team in the eager and deep-pocketed Seattle market.

"Seattle is a wonderful market. It would be very additive to the league to have a team there," Silver said in an interview this week with ESPN. "But we're not planning on expanding right now, so it's not a function of price."

Silver's comments come at a time when momentum for putting a team in Seattle had been gaining steam. Earlier this season, influential Dallas Mavericks owner Mark Cuban said "there's a good chance of [expansion] happening, but I have no idea when."

That "when," Silver seems to want to make clear, is not now. He has several reasons to take this position, primarily about leverage and uncertainty.

Right now, the NBA is dealing with a problem spot in Milwaukee with the Bucks. In September, Silver visited Milwaukee and told a group of sponsors that the Bradley Center was unfit and the team needed a new arena. In December, 78-year-old owner Herb Kohl announced he was planning to sell a portion of the franchise but wanted only investors who wouldn't move the team.

Regardless of Kohl's position, a team with an arena issue that's for sale creates a leverage opportunity, and Silver likely will not pass that up.

The Bucks' lease at the Bradley Center will expire in 2017, which has essentially established a deadline to deal with the situation. It will not be simple. Recently, city politicians fought mayor Tom Barrett when he allocated a mere $175,000 in parking revenues to help the Bucks with building maintenance. New arenas these days cost upward of $400 million, and Silver and Kohl are looking for public funding.

It is unlikely Silver would take any meaningful steps on expansion with the Bucks' situation unresolved. After fighting for a new arena in Sacramento for a decade, it wasn't until the real threat of relocation to Seattle that a deal for a new arena for the Kings was forced through. The attractiveness of the Seattle option could end up being the wedge in Milwaukee.

Cuban, though, had reason to make such a prediction about expansion in Seattle. The group that wanted to move the Kings and reincarnate the SuperSonics had offered $420 million for 72 percent of the team and agreed to a record $115 million relocation fee plus $200 million to repay bonds issued for a new arena, and has already spent $80 million to buy land in south Seattle for the new building.

That meant those Seattle investors, led by Chris Hansen and Microsoft billionaire Steve Ballmer, were willing to commit more than $800 million for a team in 2013. Such an expansive and aggressive bid clearly left Cuban wondering just how far that group might go financially to get a team in Seattle in the next few years.

By comparison, when the league added the  Charlotte Bobcats in 2004, the expansion fee was $300 million. Each team got a check for $10.3 million. If the Seattle group is willing to go to $800 million, for example, each team would receive $26 million. Or perhaps more, as few know how much Hansen and Ballmer are prepared to spend, which is Cuban's point.

"I just think the price of the expansion fee has to be so high that the NBA owners think, 'OK, we're crazy not to do it.' What that number is, I don't know. But I'm open to it," Cuban said.

"It just depends on the price. When you sit in the board of governors meeting, you give a price, and each NBA owner calculates his share. You balance it to what you're giving up in TV and shared revenue, and you say: OK, it's worth it. Then you say you got to do it."

That TV share, however, is another major sticking point that will delay Cuban's dream auction.

This summer, Silver will start talks for a new round of television and digital rights deals. The current deals expire in 2016. Until the new contracts are finalized and kick in, owners won't know how much expansion would cost them. With each additional team, the pie gets split up more. Without knowing the numbers, owners can't weigh it against the expansion fee they might be able to command.

In addition to the raw dollars, Silver said he's also worried about what could happen to the level of play in the league if another team or two were added.

"I and the owners will look at not only the dilution of economic opportunities with one more partner to divide national and international money but also dilution of talent," Silver said. "Right now some are already making comments about the [Eastern Conference], so is it the ideal time to be adding another 15 or 30 players to the league?

"Ultimately I'm responsible for the financial and competitive health of a 30-team league, and while we made tremendous strides in the last collective bargaining agreement, we're still not there yet. We don't have 30 profitable teams in the NBA, and while we've made progress, there are still teams that aren't competitive enough."

Silver and Cuban probably agree that, at some point, there will be a team in Seattle again -- but only after the league has used the option to maximize its business interests, with the convenient side benefit of more time passing, perhaps driving up the demand and the price even higher.

"[The Kings decision] should not have been received as a no to Seattle," Silver said. "There's no doubt if we were prepared to expand to Seattle right now, we'd get an enormous price for the franchise." business reporter Darren Rovell contributed to this report.

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