Tatum may buy a WNBA team.

[Kblaze8855]

https://www.hostpic.org/images/2411122149100313.jpeg

[Kblaze8855]

Surprised the CBA allows it but on the other hand, the NBA already owns like half of the WNBA and players like LeBron and Steph own parts of other leagues already. LeBron owns some of the….Redsox? I think Redsox. Just felt the nba wnba tie might be too close to allow it. Guess not.

[Carbine]

That's an awful investment, isn't it?

Investing in a league that loses money seems wild. Like charity.

[highwhey]

That's an awful investment, isn't it?

Investing in a league that loses money seems wild. Like charity.

its fvcking atrocious.

he shoudl just zelle me the 200 milly, it would have the same ROI.

[Kblaze8855]

They didn’t make money decades ago either but they cost a fraction of what they do now. You don’t buy these things for the income. They can increase in value even while losing money.

It will be funny seeing Tatum as an owner when players are demanding higher pay though.

[bison]

Mahomes wants a team too. And we are getting to new W franchises in San Francisco and Portland. It’s funny. I am told the wnba constantly loses money but millionaires and billionaires (people who are a lot more smart about money than you and I) keep wanting to buy teams and expansion franchises. It’s like a lot of you woman hating idiots can’t tell the difference between profit and revenue.

[Real Men Wear Green]

Tatum by himself makes more money than the payroll for the entire WNBA so I doubt he's that worried about whatever incremental increase the players get. Anyway it's not like he's pulling 200 mil out of his own pocket (he's done well for himself but that's a lot). He would be part of an ownership group and although he would be the face of it might not even be the biggest investor. I don't know what the WNBA's prospects are like but Tatum has some smart money people advising him . If he gets into this it will be at a number that makes himself some money.

On a side note he's got competition from at least one famous source. Patrick Mahomes is the face of a rival potential ownership group.

[Meticode]

I hope the WNBA does better. Clark and some of those women have made it entertaining to watch. Good or bad.

Tatum must think they're going to make money soon or something. Even with the Clark thing this past season, and them doing the Reese/Clark beef like it's Magic/Bird or something, the league lost around $40-$50 million. $25 million of that due to the charter flights they paid for the players.

[Real Men Wear Green]

I hope the WNBA does better. Clark and some of those women have made it entertaining to watch. Good or bad.

Tatum must think they're going to make money soon or something. Even with the Clark thing this past season, and them doing the Reese/Clark beef like it's Magic/Bird or something, the league lost around $40-$50 million. $25 million of that due to the charter flights they paid for the players.
Tesla didnt make money for years while Musk was on his way to being the richest man on the planet. What a business technically makes or loses is bookkeeping and not necessarily going to reflect what the people behind it are making.

[Meticode]

Tesla didnt make money for years while Musk was on his way to being the richest man on the planet. What a business technically makes or loses is bookkeeping and not necessarily going to reflect what the people behind it are making.

It took Tesla six years to make it's first profit.

The WNBA has been in existence for almost 29 years. It's never turned a profit once during those 29 years usually losing on average $10 million a season, except this season they lost $40+ million.

I get what you're saying and I agree with you with the exception being that the WNBA was founded when I was 12 years old. I'm 40 now and it's never made a profit one time during that period to the point they need funding from the NBA to even stay alive.

[Real Men Wear Green]

It took Tesla six years to make it's first profit.

The WNBA has been in existence for almost 29 years. It's never turned a profit once during those 29 years usually losing on average $10 million a season, except this season they lost $40+ million.

I get what you're saying and I agree with you with the exception being that the WNBA was founded when I was 12 years old. I'm 40 now and it's never made a profit one time during that period to the point they need funding from the NBA to even stay alive.
The reason I don't buy that is that these teams are owned by billionaires and we have at least two groups with famous future billionaire athletes competing to join in losing all of this money. Bookkeeping is tricky and can be very dishonest. Claiming to lose 40 mil both gives the owners an excuse not to pay more money to the players as well as saving them money on taxes. If an accountant that knows what to look for opens up their records they could probably paint an entirely different picture.

[highwhey]

Tatum by himself makes more money than the payroll for the entire WNBA so I doubt he's that worried about whatever incremental increase the players get. Anyway it's not like he's pulling 200 mil out of his own pocket (he's done well for himself but that's a lot). He would be part of an ownership group and although he would be the face of it might not even be the biggest investor. I don't know what the WNBA's prospects are like but Tatum has some smart money people advising him . If he gets into this it will be at a number that makes himself some money.

On a side note he's got competition from at least one famous source. Patrick Mahomes is the face of a rival potential ownership group.

dude, tatum isn't going to bang you. stop white knighting him.

[highwhey]

Tesla didnt make money for years while Musk was on his way to being the richest man on the planet. What a business technically makes or loses is bookkeeping and not necessarily going to reflect what the people behind it are making.

yeah...a lot of tech companies take a while to churn a profit, because they're entering a market and their sole goal is to control as much of that market as they can. same with uber, took them like 15 years to finally turn a profit. the difference is they were cornering the market and purposely losing billions doing so until they drove competition away and established themselves as the dominant provider. they control 76% of rideshare sales. The WNBA isn't taking over the basketball industry, they are just going to become the premier female basketball league...of which is a small market size. even as the product is improving thanks to Cameron Brink and Caitlin Stabler Clark, the market size won't ever rival the NBA's.

[Real Men Wear Green]

dude, tatum isn't going to bang you. stop white knighting him.
A bit early for you to be drinking again.

[Wardell Curry]

Brain dead investment unless he's banking on the idea that Caitlin Clark personally revolutionizes interest in the league to the point that a ton of young girls believe they can be her and end up being even better than her and make the league worth watching, in which case it's genius.

But that's too close to gambling for my own taste.

He'll be alright either way.

[Real Men Wear Green]

yeah...a lot of tech companies take a while to churn a profit, because they're entering a market and their sole goal is to control as much of that market as they can. same with uber, took them like 15 years to finally turn a profit. the difference is they were cornering the market and purposely losing billions doing so until they drove competition away and established themselves as the dominant provider. they control 76% of rideshare sales. The WNBA isn't taking over the basketball industry, they are just going to become the premier female basketball league...of which is a small market size. even as the product is improving thanks to Cameron Brink and Caitlin Stabler Clark, the market size won't ever rival the NBA's.
None of which changes the fact that Musk himself was making billions while Yesla was technically not making money. WNBA is not going to be as profitable as Tesla of course but you really think these millionaire and billionaire team owners have just been losing millions every year for something like 30 years while getting their product on ESPN and ABC? And Tatum and Mahomes and the rich investors working with them want to join in this colossal loss of money for fun? I have doubts.

[Kblaze8855]

It took Tesla six years to make it's first profit.

The WNBA has been in existence for almost 29 years. It's never turned a profit once during those 29 years usually losing on average $10 million a season, except this season they lost $40+ million.

I get what you're saying and I agree with you with the exception being that the WNBA was founded when I was 12 years old. I'm 40 now and it's never made a profit one time during that period to the point they need funding from the NBA to even stay alive.


and yet he and others are going to be paying $200 million for teams that in 2005 we’re going for 10 million. That is an unbelievable increase in value without making profit. It’s a long play. They are one or two rounds of right negotiations with people like Apple and Amazon who are steel looking for live sports to add from the value going even higher. They don’t need to turn a profit. They only need the next owner to pay more than the last one did and that almost always happens. Long-term it’s pretty safe. Just like MLS teams. You may know almost nobody who watches it but every single one of them is worth more than any NBA team was even 10 or 12 years ago.

It isn’t about eyes. it isn’t about profit. There are MLS teams Forbes put over 600 million that lose money. It’s more complicated than it appears.

[Neal Romer]

and yet he and others are going to be paying $200 million for teams that in 2005 weÂ’re going for 10 million. That is an unbelievable increase in value without making profit. ItÂ’s a long play. They are one or two rounds of right negotiations with people like Apple and Amazon who are steel looking for live sports to add from the value going even higher. They donÂ’t need to turn a profit. They only need the next owner to pay more than the last one did and that almost always happens. Long-term itÂ’s pretty safe. Just like MLS teams. You may know almost nobody who watches it but every single one of them is worth more than any NBA team was even 10 or 12 years ago.

It isnÂ’t about eyes. it isnÂ’t about profit. There are MLS teams Forbes put over 600 million that lose money. ItÂ’s more complicated than it appears.


This is true. There is also the possibility that MLS, WNBA, even NBA franchise valuations are in a bubble.

Nothing wrong with a bubble for everyone who sells before the pop. But if youre left holding the bag at the end... not so good. Not that Im predicting that in this case, just making the general point.

It's an interesting discussion, the business future of the WNBA. Of course I dont think the calculus on it as an investment is anywhere near as simple or as certain as buying Coca Cola in the 80s. But I do see and understand the factors that could make it appealing as a value proposition.

[Kblaze8855]

When you get into the area of hundreds of millions it gets more shaky but I can’t believe more people weren’t getting in when they were $10 million. A lot of the baseline costs are covered by the infrastructure provided by the NBA. It is isn’t a traditional start up. I personally knew people who had WNBA Owner money back then. I’m sure it’s like any other league where they vet you and they only want a certain kind of person who is willing to do certain things and it isn’t just the money. But in retrospect, it’s such an easy call at $10 million. But I suppose you would’ve had to see the full power of the Internet and streaming coming.

[Neal Romer]

It's possible the NBA wasnt making WNBA stakes available back when the valuations were lower. Even tho WNBA franchises now selling for 200 million, let alone NBA franchises selling for 4 billion sounds like a shit ton, it has to be split between 30 owners. So to split 10 mil between thirty owners probably wasnt even worth it.

[Full Court]

Why St. Louis???

St. Louie is a craphole town. If he wants to bring a franchise to the midwest, KC would be a much better choice.

[Real Men Wear Green]

Because he's from St. Louis.

[Kblaze8855]

It's possible the NBA wasnt making WNBA stakes available back when the valuations were lower. Even tho WNBA franchises now selling for 200 million, let alone NBA franchises selling for 4 billion sounds like a shit ton, it has to be split between 30 owners. So to split 10 mil between thirty owners probably wasnt even worth it.

The teams were being sold. The New York liberty sold for less than 14 million right before Covid. And now the expansion fee is a couple hundred million. I suppose if they see that they can get that you’re going to see quite a few more teams. Some of them folded back in the day. some of these athletes like Shaq who don’t have full control NBA money will probably get in because they know long-term it’s gonna be worth the investment. If deals like this are being done, expect the Houston comets to come back. They won like four in a row at one point and then just vanished.

There’s always a rich group looking to own sports leagues and get in near the ground floor. The ground floor is over, but this might be as good as it gets in the future. Like I said half the MLS is worth 600 or more million. They have like five billion dollar franchises and I’ve never even met an MLS fan.

[Kblaze8855]

Because he's from St. Louis.

yeah, that was my guess. I didn’t even even check. I just assumed.

[Neal Romer]

The teams were being sold. The New York liberty sold for less than 14 million right before Covid. And now the expansion fee is a couple hundred million. I suppose if they see that they can get that you’re going to see quite a few more teams. Some of them folded back in the day. some of these athletes like Shaq who don’t have full control NBA money will probably get in because they know long-term it’s gonna be worth the investment. If deals like this are being done, expect the Houston comets to come back. They won like four in a row at one point and then just vanished.

There’s always a rich group looking to own sports leagues and get in near the ground floor. The ground floor is over, but this might be as good as it gets in the future. Like I said half the MLS is worth 600 or more million. They have like five billion dollar franchises and I’ve never even met an MLS fan.

Interesting. I honestly didnt know the NBA sold WNBA franchises until this article. I knew WNBA teams were basically connected by default to the owner of the NBA team within the same city, and thrown in to deals de facto when an NBA team exchanged hands, but when you hear all the jokes about the WNBA being run as a charity it didnt really occur to me that there was any market for these things independently pre-Caitlin Clark or that the NBA made them available for purchase.

I will say though, that the reason these valuations have historically gone up, up, and up is that two things have been true every generation: The overall population goes up, and the emerging markets western businesses had new access to increased as other countries developed. The more people you can theoretically reach, the more theoretical value the business has. But eventually there arent gonna be any 'new' markets, and the population in the current markets isnt increasing much either. At THAT point, these businesses have to actually be profitable, have to be in demand in order to remain valuable. Their valuations right now are all theoretical. But they cant remain that way forever. Bubbles always pop eventually. We're getting closer to a point in the world economy where we will start to see things that dont have real legs underneath them start to destabilize. So Tatum, in my opinion, better hope the increasing demand for women's basketball is real.

[Mask the Embiid]

Whats the saying? "You gotta be a role player to know how to become a boss."


edit its worker not role player. but eh.... tomatoe tamotoe

congrats to tatum

[Kblaze8855]

Interesting. I honestly didnt know the NBA sold WNBA franchises until this article. I knew WNBA teams were basically connected by default to the owner of the NBA team within the same city, and thrown in to deals de facto when an NBA team exchanged hands, but when you hear all the jokes about the WNBA being run as a charity it didnt really occur to me that there was any market for these things independently pre-Caitlin Clark or that the NBA made them available for purchase.

I will say though, that the reason these valuations have historically gone up, up, and up is that two things have been true every generation: The overall population goes up, and the emerging markets western businesses had new access to increased as other countries developed. The more people you can theoretically reach, the more theoretical value the business has. But eventually there arent gonna be any 'new' markets, and the population in the current markets isnt increasing much either. At THAT point, these businesses have to actually be profitable, have to be in demand in order to remain valuable. Their valuations right now are all theoretical. But they cant remain that way forever. Bubbles always pop eventually. We're getting closer to a point in the world economy where we will start to see things that dont have real legs underneath them start to destabilize. So Tatum, in my opinion, better hope the increasing demand for women's basketball is real.


Also consider this….

Expansion teams aren’t purchased. There is no product being sold. Youre paying the league directly for the right to create one and put it under the existing umbrella. That’s one reason leagues love expansion. It isn’t one ownership group getting a payday. It’s generally a straight cash payment evenly split among the other owners in exchange for accepting a new member. So let’s say the WNBA allows two new expansions. That’s $400 million in cash spread out among the 12 existing owners. So in one stroke every Ownership group gets a cash payment equal to three times the original investment any of them made to own the teams.


And in exchange all they are all giving up is a new spot in a league 40% subsidized by the NBA.

A lot of the recent losses are just because the league started chartering flights for the players when they started making a big deal out of it and making them look unprofessional. These deals alone get back all that money while also paying back everyone for the initial investment while they try to find a sponsor for the flights. Eventually, they’ll probably let in some Middle Eastern money to slap a logo on the side of the planes but it buys them time.

In a league with such a low operating cost a $400 million cash infusion goes a long way.

They will let in a few to keep the wolves away while they figure out a way to turn recent gains into a workable rights deal.

It’s all a long con shell game with hidden motivations.

Tatum and Mahomes might give the cash infusion that “saves” the wnba and makes the purchases worth it long term.

If they play it right, it could be a bit of a self fulfilling prophecy.

if I were them, I’d call Bezos and tell him to pull 200 million more out of his sock drawer to get another team with an under the table deal that he gets the next NBA team that’s for sale. He’s been wanting a sports franchise for years. Let him bring back the Houston Comets or create a team in Philly with the understanding he gets the Vegas or Seattle nba expansion that’s inevitable.

Bezos, Mahomes, and Tatum keep you afloat till you work out rights deals….

Cherry on top?

Sell the rights to Amazon prime and Bezos to pair with their new NBA rights. Now they can keep whatever studio show they steal(probably inside the nba in some version) working all the way through summer instead of paying them $20 million to be off for five or six months like they have to do the NFL broadcasters. Get their moneys worth outta Shaq, Kenny, Jeff Teague, and some Ernie ripoff while giving the wnba a big rights increase that’s still less than Amazon would have to pay if Bezos weren’t playing both sides.

Its chess not checkers.

In sure there’s a plan behind the scenes.

[Neal Romer]

Well but I think the league does give up something in exchange for those new franchise fees. When you add a new owner... youre dividing up those media deals and other revenues into smaller portions per team right?? I think thats the big rub, and why Silver has said expansion will eventually happen but it's not on their front burner right now. The media deals dwarf the franchise fees. So I dont think owners are in a hurry to split them any smaller.

It does sound tempting to just add more teams for a cash fee. But if adding those teams to the league doesnt increase the amount of people buying NBA socks, and league pass, and tuning into the Finals... youre quickly gonna mitigate that franchise fee in a few years with an extra team in the revenue split, and it may eventually even represent a loss after a certain period of time.

I mean obviously its very complex and multifaceted and Im no expert on NBA ownership economics, but I think this is the main concern with expansion.

[Kblaze8855]

L He said they would address expansion in the meetings this season. They had to get the new CBA and the new rights deal signed. I’m also not sure if they want to get the Celtics and Timberwolves situation resolved because whatever they sell for is going to impact the final number of the expansion fee. Last I read, it was gonna be something like $4 billion each. $8 billion in cash? We’re talking like $260, million straight cash to every owner and a lot of the owners aren’t nearly as cash rich as people think.

A guy like Ballmer or Dan Gilbert don’t give a ****. But the Buss family? The Spurs owners? A lot of people are only billionaires nominally because they own teams. But unless they are going to sell the team, they don’t have that kind of money laying around. And a lot of them sold stakes of teams years ago when they were only worth hundreds of millions and they have made tremendous amounts of money for the people they sold them to with the increase in value but now they can’t sell anymore or they lose controlling interest.

Locking in that an NBA franchise is worth at least $4 billion not only increases all of their respective values. It gives a cash infusion without having to lose control. That’s why expansion is inevitable. It isn’t basketball revenue they have to split with the players. It’s the only form of cash that goes straight into the owners pockets.

There are NBA owners who would have their real life Liquid money doubled by deals like this. It’s the best way to cash out on increased values without having to lose your team. These old guys might not make a quarter billion straight cash without a revenue split the rest of their lives just relying on basketball revenue.

[Carbine]

Can someone with more business acumen than me explain how before COVID a team sells for 14 million and five years later it's costing 200 million?

The WNBA really seen an increase of value to that magnitude? For what? What triggered that.... What happened? 14 million to 200 million is not just doubling in value... Not tripling... It's 14x

How does a WNBA team make money for the owner of they lose money?

I get that buying a team is cool. There's only so many around....

[Kblaze8855]

The most recent Year I can find a reliable source mentioning wnba revenue(Silver himself) was 2017 and it was 60 million. Its climbed up a lot the last 3 years reaching over 200 million this year before even getting the new media deal. The media deal tripled and that’s going forward from now. Who knows how the specifics shake out, but it is definitely more viable to run the WNBA team now. They just have to figure out the plane situation.

[Carbine]

60 million per team or the entire league? What good is revenue if they have to pay for things like players, facility, travel, staff and whatever else goes into owning a team putting them in the red by the end of the year.

[Neal Romer]

Can someone with more business acumen than me explain how before COVID a team sells for 14 million and five years later it's costing 200 million?

The WNBA really seen an increase of value to that magnitude? For what? What triggered that.... What happened? 14 million to 200 million is not just doubling in value... Not tripling... It's 14x

How does a WNBA team make money for the owner of they lose money?

I get that buying a team is cool. There's only so many around....


Well part of that is just the universal inflation resulting from Covid spending. The Fed printed 4.5 trillion dollars during Covid. The US gradually went from a few million dollars (or whatever it was) in value back in the colonial days up to 4.2 trillion at the start of 2019. So like 250 years. Then within one year the feds balance sheet doubled to 8.7 trillion dollars. Literally just like that. It doesnt make mainstream headlines how INSANE that is. And it wasnt an accident and it wasnt reactionary. Something like that is calculated. And it signals a very different economic future to the business as usual most of the prisoner of the moment populace can really grasp.

All that extra money caused values in numerous industries to skyrocket. More money out there to be spent, higher the prices go. The pre-covid and post-covid economies are basically two different periods in history.

And then of course on top of that you have the interest in Caitlin Clark last year. And I guess investors sort of have to decide if thats a novelty that will wear off or if thats going to spark a sustainable following of the WNBA.