Booming team valuations, feelgood social justice and anti-racism initiatives, and repudiation of anyone standing in the way of the league’s expansion into markets across the globe: values, in both senses of the word, have been at the core of Adam Silver’s 10-year tenure at the head of the NBA, and it’s never been entirely clear whether those of the ethical variety matter more to the league’s commissioner than numerical ones.
On the one hand, Silver has won plaudits for setting up the NBA’s social justice coalition, the group established in the wake of the George Floyd protests to advocate on behalf of the league for criminal justice reform and an end to racial inequality, and forging a path for professional basketball as a socially conscious sport amid the culture wars and toxicity of the Trump era. On the other, he’s put distance between the NBA and franchise figures with outspoken views on foreign policy – none more so than Daryl Morey, the former general manager of the Houston Rockets who almost got the NBA kicked out of China after tweeting his support for Hong Kong’s pro-democracy protesters in 2019 – and cultivated an institutional image of geopolitical neutrality to repair the league’s post-Morey reputation in China. Liberal pieties and accommodations with illiberalism have mingled seamlessly in Silver’s NBA. For every Donald Sterling, forced to sell the Los Angeles Clippers in 2014 after he was caught on tape being racist, there’s an Enes Freedom, the former New York Knicks star who was pushed to the sport’s fringes a few years ago for being a little too vocal in his support of China’s Uyghur minority.
The recent announcement of a multi-year sponsorship deal between the NBA and Emirates, which will make the Dubai-based airline the title sponsor of the NBA Cup and put Emirates patches on referees’ uniforms throughout the regular season, seems innocuous enough on its own. Emirates, after all, is already a well-known sponsorship presence throughout European football, and its name adorns the shirts of storied old clubs from England to Italy. But the airline is owned by the Emirati state, which remains a serial human rights violator – a fact that the company’s normalization as a global sporting sponsor is, of course, designed to obscure, and that seemingly played no part in the NBA’s commercial calculations.
The NBA’s new sponsorship deal builds on a number of moves that Silver has made in recent years to build the league’s following throughout the Gulf and enhance its appeal as a destination for the oil autocracies’ billions in disposable capital. The league has played preseason games in Abu Dhabi over the past two seasons and plans to return there later this year, while last year the Qatar Investment Authority – the sovereign wealth fund that owns Paris Saint-Germain – bought a 5% stake in the parent company of the Washington Wizards. Silver has since suggested the league would be open to investment from Saudi Arabia. As the NBA has emerged as the first professional league in the US to cozy up to global sport’s burgeoning class of nation-state investors, the shape of its guiding dualism under Silver is starting to become crisper: lip service to social justice issues at home, a studied obliviousness to human rights violations abroad. In the contest between ethics and numbers, it’s now becoming clear that the latter matter far more to the NBA than the former.
Those numbers, and the dollar values they represent, are climbing every season. Baseball may be culturally entrenched across Japan and Latin America but basketball, with its strengths in Europe, Australia, the Middle East, Africa and Asia, is quickly becoming America’s one truly global sport, and its surging international popularity is reflected in the NBA’s buoyant financials. According to one estimate, the aggregate value of the entire league has increased more than 10 times over the past two decades, meaning that professional basketball now offers the types of returns that investors in the public markets can only dream of. The average NBA franchise is now worth $3.9bn and growing by 35% a year; the Golden State Warriors, the league’s richest team, has been valued at $7.7bn, comfortably ahead of the $6.3bn valuation that formed the basis of Jim Ratcliffe’s recent purchase of a minority stake in Manchester United. With the NBA preparing to ink a new media rights deal, encompassing both domestic and global distribution, ahead of the current US deal’s expiry at the end of the 2024-2025 season, team valuations across the league look set to soar even higher. Conversely, the pool of billionaires who can afford to buy teams outright is shrinking.
The NBA saw this development coming and amended its rules in late 2022 to allow institutional investors – a broad category that includes private equity, hedge funds, pension funds, and sovereign wealth funds – to buy stakes in individual league franchises. Basketball was the first of the country’s big professional sports leagues to break open America’s convention of restricting team ownership to extremely rich individuals; baseball and hockey have since followed suit, but basketball got there first. (The NFL has not yet relaxed its rules to allow private equity investment, though that may change when the league gathers for its annual meeting in Orlando, Florida next month.) Qatar’s purchase of a minority stake in the Wizards was the first deal involving a sovereign wealth fund to follow this rule change; the new sponsorship agreement with the United Arab Emirates signals the league’s growing openness to investment from that part of the world. For now, the NBA has placed limitations on institutional investment in the league: in aggregate, no more than 30% of a single NBA franchise’s equity can be owned by institutions, and individual sovereign wealth funds can only invest in teams passively for a stake no greater than 5%.
Silver has made boilerplate statements about new owners still needing to respect tradition and build connections with the community, but he hasn’t exactly slammed the door shut on the prospect of sovereign wealth funds eventually taking over franchises outright. Last summer he claimed “there’s no contemplation right now” of that happening, but as team valuations grow, money continues to gush into the sport, and the pressure from the league’s existing owners to cash out at the top of the market intensifies, it’s not hard to imagine the NBA’s contemplation of the ownership question evolving in an oil money-friendly direction. Silver has made it clear that once the new global media rights deal is locked in, the NBA will begin planning in earnest to add its first new franchises in more than two decades. Las Vegas, Mexico City, and Seattle are among the leading expansion candidates, and now that the league has ingratiated itself with the Gulf states, vast new reserves of vanity capital have been unlocked to help realize the commissioner’s demiurgic ambitions. “Get big or die” is the commercial law of modern sport, and under Silver the NBA is moving more aggressively than any other US pro league to prepare for global growth. Where or who the money comes from to fund that growth is immaterial; all that matters is that the cash is ready for action.
For institutional funds, especially those of the Middle East, sinking money into leagues like the NBA, NHL and MLB makes even more sense, arguably, than throwing cash at European football. The global reach of America’s sports may not match that of soccer, but a massive domestic consumer market, the closed nature of the US pro leagues – which have none of the jeopardy that comes with promotion and relegation – the widespread use of equalizing mechanisms like drafts, salary caps, and luxury taxes, and the corresponding absence of risks around shifting financial fair play rules and uncontrolled salary inflation, make investment in USA Sports, Inc a far less uncertain proposition than trying to squeeze value out of the proud and debt-saddled football clubs of old Europe. Within a few years, it seems inevitable that the hordes of fossil fuel funds and private equity bullies that have descended on European soccer will have their fangs into American basketball too. Eventually, the ubiquity of institutional capital across all sectors of the developed world will make a playoff game inside the Las Vegas LeBrons’ humming new home on the Nevada desert sands as spotless and friction-free as a degustation meal in a Dubai supertall.
Another point of distinction may enhance American sport’s appeal as a laundry for the Gulf nations’ PR dollars. The US is arguably more comfortable as a society than Europe with the idea of financial and foreign capital penetrating all areas of everyday life – or at least more resigned to it. Some awareness of that fundamental cultural difference may account for the breeziness with which Silver has shrugged off concerns over the prospect of Middle Eastern sovereign wealth funds buying up the league: “People are a little too dismissive these days about the benefits that come from the commonality around sports,” he said on the issue last year. Forget about the human rights violations, in other words: think of what oil money could do for the world’s basketball group chats. Though it may preach voting rights reform and racial justice at home, the NBA’s politics ends at the US border: some rights are simply more equal than others. In the end, the only values the league really cares about are those with a dollar sign attached to them.
Perhaps this should not surprise us. Perhaps it’s naive to expect that a figure like Silver, sitting at the head of one of America’s most prestigious cultural assets, would behave or think any differently. He is, after all, an obedient servant of American industry, and American industry is nothing if not hospitable to the governments and billions of Saudi Arabia and the UAE. The US’s strategic and economic interests have long been entwined with the oil autocracies of the Gulf, which perhaps explains why the decision to open the door to investment from the region in the NBA has met with little of the popular outcry that’s greeted the incursion of oil money into European soccer. To mainstream American eyes, the flow of goods and capital between the Gulf and the United States is the historical norm, and countries like the UAE and Saudi Arabia are allies of long standing rather than an illiberal evil to be resisted at all costs. When it arrives, the flood of money from the Gulf into the NBA will not be a shock, but American business as usual.
