Golden State Warriors owner Chris Cohan has decided to sell his struggling basketball team. The Warriors have a lot of negatives, they have been a bad team, there is still a recession, and recent NBA team sales have not exactly been robust. On top of all that the Warriors do not own their home facility. Even with all that, many experts think that the Warriors could fetch a NBA record sale price, more than the 401 million dollars Robert Sarver paid for the Phoenix Suns in 2004.
Why, well it has to do with demographics. The Warriors play in the Oakland, California bay area, and that is considered to be one of the attractive demographic markets of the 30 NBA franchises.
The feeling right now is there will be enough interest in the team to spark a bidding war that could push the price over the 400 million dollar mark. Currently Forbes Sports Money has the value of the Warriors at 315 million dollars.
The Warriors have a passionate fan base, and the team generates over a million dollars in revenue for every home game. Being located near the wealthy Silicon Valley are certainly has its advantages. If the Warriors could ever to field a winning team, they may be counted as the most financially successful sports franchises ever.
However, since Cohan bought the team the team they have only appeared in the playoffs once, and the team has been a mess from front office on down. There has been infighting among every level of the organization, and I don’t even want to get into the Stephen Jackson mess.
The Warriors sit in the middle of a wealthy population numbering over 4 million. While they technically play in one of the oldest buildings, Oracle Arena, it was totally renovated in 1997 and is a fine home for the team.
Their current lease requires them to stay put until at least 2016. It requires the team to pay 1.5 million in base rent, and about 700k a year from their 30 million dollar, 10 year naming rights deal with Oracle. The team must also pay a share of parking, premium seating, and concession to Alameda County not to be more than 7.4 million per year.
It looks like Cohan’s investment in the team will pay off huge. He bough them in 1995 for 119 million dollars. In 2004 he sold off 20% of the team to four investors for an undisclosed sum.
Related Links:
• The Business of the NBA
• MTR Basketball.com
Comments