06/10/2006

Sports Business Journal

by: John Lombardo

It has been almost two years since the last NBA team changed hands, but this summer alone at least three franchises are for sale, an unprecedented number of potential deals for buyers and for cities eager to recruit a team...

...Most analysts point to specific local issues leading to sales and a run-up on franchise values, not a sign of trouble for the NBA.

"The NBA opportunities are a function of the league's current stability and future," said Rick Horrow, chief executive officer of Horrow Sports Ventures and a visiting expert of sports law at Harvard Law School. "The labor agreement is locked in. The structure of revenue sharing is sustaining, and the wild card is the NBA's international business."...

..."It is a robust market for franchises, but it is still beachfront property underpinning the value of the markets," said Sal Galatioto, president of sports investment firm Galatioto Sports Partners.

The value of recent deals show the strength of the market. The last NBA sale was in 2005, when Dan Gilbert paid $365 million for the Cleveland Cavaliers. In 2004, Robert Sarver bought the Phoenix Suns for a record $401 million, while Bruce Ratner paid $300 million for New Jersey Nets...

..."The values are very high right now and interest is strong, but individual buyers look at individual markets," Galatioto said. "You can't draw a pattern."...