NBA Commissioner Adam Silver speaks at the press conference ahead of the All-Star Game at Vivint Arena in Salt Lake City, Utah, February 18, 2023. /CFP
The NBA has no plan "in the foreseeable future" to allow sovereign wealth funds to become controlling owners of its teams, Commissioner Adam Silver said on Monday.
"I don't want to say what could ever happen, but there's no contemplation right now," Silver said at the Associated Press Sports Editors convention. "I mean, it's very important to us, putting aside sovereign wealth funds that individuals are in a position to control our teams, be responsible to the fans, be responsible to their partners and to the players."
According to the NBA's investment rules, it takes at least 15 percent of a team's shares to make a controlling owner. Sovereign wealth funds are only allowed to make passive investments to buy teams' shares of no more than five percent.
Qatar's sovereign wealth fund bought five percent of shares of the Monumental Sports & Entertainment to gain stakes in the NBA's Washington Wizards, the WNBA's Washington mystics and the NHL's Washington Capitals. Moreover, Saudi Arabia's Public Investment Fund has been funding the merger of LIV Golf and the PGA Tour.
NBA Commissioner Adam Silver (L) give the Bill Russell NBA Finals Most Valuable Player Trophy to Nikola Jokic (C) of the Denver Nuggets after they defeat the Miami Heat 94-89 in Game 5 of the series at Ball Arena in Denver, Colorado, June 12, 2023. /CFP
"It's very important to us that there be a person [in charge], and this is independent of sovereign wealth funds. I think that in terms of the connection with the community, the connection with the players and their other partners in the league," Silver said.
Two NBA teams, the Milwaukee Bucks and the Phoenix Suns, were sold to new owners in March and February for $3.5 billion and $4 billion respectively. In fact, the league's team evaluations have been skyrocketing for years. Many worry that this may lead to a bubble, but Silver disagreed.
"I think a bubble would be indicative of sort of irrational valuations," the NBA Commissioner said. "I think if you look at the revenues, at least in the case of the NBA being generated by the league, the opportunity for growth, the global market that we're addressing here, and maybe there's certain unique aspects to the NBA because of how global our league is."
"I don't think there's anything irrational at all. In part, the reason why we've opened up investment opportunities to private equity firms, sovereign wealth funds, is because we're running out of individuals, frankly, who are in a position to write those kinds of checks, and especially when you're not going to be the control owner of the team," he added.