NBA Europe Adopts English Cricket Model for Franchise Sales

The NBA is taking a page from English cricket for the launch of its European league in 2027. This approach involves a sales process similar to that used by The Hundred, a cricket competition in England. The goal is to attract investors and ensure the financial viability of the franchises in the new European basketball league.

The strategy aims to replicate the success of The Hundred, which raised over £500 million. The NBA hopes this sales model will allow it to maximize the value of its franchises and attract the strongest investors. The London franchise is expected to be the most valuable, similar to what happened with the London Spirit and Oval Invincibles in The Hundred sale.

The deadline for submitting bids for the 12 permanent franchises in the 16-team competition is Tuesday. Potential investors include Saudi Arabia's Public Investment Fund, RedBird Capital, and Qatar Sports Investments. These investors are interested in acquiring a stake in the NBA Europe franchises.

JPMorgan and Raine Group are managing the sales process. Raine Group was already successful in the sale of The Hundred. The NBA hopes this bidding process will attract high-profile investors and ensure the financial sustainability of the European league.

Once all offers have been submitted, the NBA Europe franchises will be sold based on market size. The London franchise is expected to be the largest and attract the highest bids, similar to what happened in The Hundred sale. This approach aims to ensure that franchises in the most important markets have a high value and attract the strongest investors.

Investors who do not get their first choice will have the opportunity to bid for other franchises. This strategy, implemented in The Hundred, led Chelsea FC co-owners Todd Boehly and Jonathan Goldstein to invest in Trent Rockets.

Manchester, Milan, Paris, Berlin, Munich, Barcelona, Madrid, Athens, and Istanbul are among the cities that could host permanent NBA Europe franchises. RedBird, which owns AC Milan, and QSI, which owns Paris Saint-Germain, have expressed interest in running the basketball teams in Milan and Paris, respectively.

The Public Investment Fund (PIF) of Saudi Arabia, owner of Newcastle United FC, is also expected to participate in the bidding for the London franchise. Marshall Glickman, a US sports executive, is also part of a bid for the London team.

The NBA and its advisors have valued the franchises between $500 million and $1 billion each, although this valuation has been questioned by some. Owners of football clubs argue that they should be compensated for lending their intellectual property and fan bases to the project.

Although this week's bids are non-binding, NBA commissioner Adam Silver has indicated that “over 100” potential investors remain in the running. The NBA has been strict about the disclosure of information about the process, even imposing very strict confidentiality agreements.