Las Vegas has become the sports capital of the United States. It doesn’t have the history or pedigree of New York, Los Angeles, or Boston, but Sin City has become the most desirable location for major events.
It’s not because of the size of the market or the quality of the local fans, but because Las Vegas has quickly become a destination for major events. No other city has such a selection of world-class hotels and restaurants within a 4.2 mile radius – with many of the most important Caesars entertainment (CZR) – Get report from Caesars Entertainment IncMGM Resorts International (MGM) – Get the MGM Resorts International Reportand Wynn Resorts (WYNN) – Get the report from Wynn Resorts Limited Properties much closer together than that.
Las Vegas is a city that can host the National Football League Draft and make this event even bigger. It is home to the biggest Ultimate Fighting Championship events and hosts many of boxing’s premier events. Las Vegas has even become a major pay-per-view home for World Wrestling Entertainment (WWE) – Get Class A Report from World Wrestling Entertainment Inc and its fast-growing rival All Elite Wrestling.
There simply isn’t a bigger place to host a sporting event, and that’s why National Hockey League expansion team Golden Knights and the NFL’s former Oakland Raiders have become major players in their leagues. You don’t need to attract crowds to Las Vegas, the crowds will come anyway.
Because of this, every major sport wants a presence in Las Vegas, with Major League Baseball’s Oakland Athletics flirting heavily with the city and several projects in the works to build a National Basketball Association arena on the Las Vegas Strip.
The NBA and Las Vegas seem inevitable
After the Supreme Court made sports betting a state-by-state decision, Las Vegas was no longer a place no pro team could go because it was unique in offering legal sports betting. The NHL quickly benefited from an expanding team, while the Raiders’ move always seemed a matter of timing given the team’s cash-strapped ownership and playing out of an outdated Oakland stadium.
Athletics is in the same predicament that the team publicly negotiated with Oakland, but it appears destined for Las Vegas. That’s because the city guarantees quite a few sell-offs, corporate box sales, all-star games, and many other ways to make money.
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In the NBA, however, there is a big difference. There’s no clear team looking for a new home (Oakland doesn’t have a basketball team), and Las Vegas isn’t the only city looking for a team. Once home to the Supersonics, Seattle has become an incredibly attractive option for an expanding team or an existing team due to the area where all the tech money is located.
For that reason, it actually seems like the NBA would be wise to consider a two-team expansion. That’s certainly a possibility, just as a team moves in a small market, but NBA Commissioner Adam Silver made it very clear in an exclusive interview with the Las Vegas Review-Journal that the league has its eye on Las Vegas.
What’s next for the NBA and Las Vegas?
The NBA already uses Las Vegas as the home for its Summer League — a sort of exhibition season for rookies and sophomores. So Silver was in town to speak to the newspaper about how the league views Sin City.
Silver clarified that no formal expansion talks are underway, but noted that one of the things that may have held Las Vegas back — the size of the market — may no longer be an issue.
“Perhaps the size of local markets will become less relevant than in the past,” he told the review journal. “Vegas has a huge footprint, but from a traditional perspective, the number of televisions in homes is a relatively small market.”
An expansion team would be entitled to a cut of the league’s national television contract, but adding a Las Vegas team wouldn’t add any value to that deal. This is a factor that owners need to consider when determining the fee for an expansion team. A new Las Vegas team may pay $2 billion to enter the league, which would be split by the 30 existing owners, but it would then receive a share of national TV revenue, which currently stands at 2.4 billion US dollars per year.
That number could double or even triple with the next TV deal, which would start in 2024. Because of this, the NBA won’t be making a decision about Las Vegas until their next TV deal is finalized.
“How we allocate our (media) rights going forward will also affect the value of a franchise here (Las Vegas),” Silver said. “For all of these reasons, we’re just not going to get involved at this moment.”
