NBA Finals: How much would Miami Heat, Spurs sell for?

The NBA Finals, once again, involve two of the most successful teams of the past 15 years, the Miami Heat and  San Antonio Spurs, tied 1-1 after Sunday's game. In light of the recent blockbuster sale of the Clippers, how much would the Spurs or the Heat fetch on the NBA market?

NBA Commissioner Adam Silver has to be feeling pretty good about his league as it barrels through the NBA Finals, where the San Antonio Spurs are duking it out with the Miami Heat and tied 1-1 after Miami's 98-96 win Sunday night. The NBA is finally rid of Donald Sterling, whose mangled ownership of the LA Clippers and discriminatory housing practices were a black mark on the league for decades before his racist rant was caught on tape.

Even better, the Clippers, once they were wrested away from Mr. Sterling, sold to former Microsoft CEO Steve Ballmer for a whopping $2 billion after a short yet spirited bidding war. That price was much, much higher than even the most optimistic estimates and made Forbes’ January valuation of the team at $575 million look like a joke. Happily for Mr. Silver and the NBA’s owners, that means the other teams around the league are probably worth a lot more than we thought.

The Clippers franchise had a lot going for it, including a primo location in Los Angeles and superstars in Blake Griffin and Chris Paul. But the team’s blockbuster sale begs the question: If someone will pay $2 billion for the Clippers, which is just now emerging from chump status within the league, how much would someone pay for a team with multiple championships, a capable front office, and a few surefire Hall-of-Famers?

In other words, how much would someone pay for the Miami Heat or the San Antonio Spurs?

The simplest answer comes from Business Insider, which calculated new market values for all 30 NBA teams based on their Forbes valuations and the Clippers sale. The Clippers’ $2 billion deal was 3.48 times their $575 million Forbes value. Using the same metric, the $770 million Heat would actually sell for $2.68 billion; the $660 million Spurs would go for $2.3 billion.

Of course, there are other factors to consider: The Clippers price may have been driven up by the hasty sale and the bids of more than one billionaire clearly intent on owning an NBA team. (Mr. Ballmer was part of a group that tried to buy and move the Sacramento Kings last year, and he outbid Larry Ellison, who tried to buy the Golden State Warriors a few years ago.) Plus, the Spurs and Heat have respected, longtime owners who are unlikely to sell (or do anything that would prompt the NBA to force them to do so). Still, just for fun, let’s look at what each team has to offer a potential buyer:

Miami Heat

NBA team since: 1988

Championships: Three

Why it’s a good investment: At present, the Miami Heat has everything a potential NBA owner could hope for in a franchise. LeBron James is the biggest star in the NBA, and though his contract is up this year, most analysts seem to think he’ll stick around (especially if the Heat win a third straight title).  The star power in Miami extends beyond James, too, with Dwayne Wade, Chris Bosh, and even into the front office with General Manager Pat Reilly. Situated in the biggest city in a state with no personal income tax, the team has a lot to offer free agents long after the current all-star roster is gone.

On the financial end, the Heat’s TV contract with Sunshine Network is set to expire next year, and the new deal will almost certainly be worth much more than the one signed back in 2004. Yesterday, the Heat signed a new arena deal with Miami-Dade County, which will subsidize the American Airlines home court for an extra five years at $8.5 million.

Any drawbacks?  The Heat isn’t a generational team with generations of loyal fans. Unlike, say, the Lakers, Knicks, or Celtics, the team’s appeal lies almost entirely with its current star power. Also, the Heat’s recent success has come at a price: Teams that go too far over the NBA’s salary cap have to pay a luxury tax, and the Heat have been doing so for the last two seasons. However, there’s some good news on that front: the luxury tax threshold is expected to rise substantially next season, which could save the team millions in tax penalties.

San Antonio Spurs

NBA team since: 1976

Championships: Four

Why it’s a good investment: The Spurs have been the opposite of the Clippers over the years, considered the model of good team management. It’s the only major professional sports franchise in San Antonio, so there’s no competition for fan attention; in fact, the franchise still holds several NBA attendance records from its time playing in the Alamo Dome. With a win against Miami, the Spurs would become one of the greatest franchises ever, and its epic battle with the Heat in last year’s finals helped it shed its reputation as a “boring” team from a tiny market. Like Florida, Texas has no personal income tax.

Any drawbacks? San Antonio is the fourth-smallest market in the NBA, which doesn’t bode well for luring free agents. Star Tim Duncan and Greg Popovich, the longest-tenured coach in the NBA, can’t go on forever, and it’s unclear how much fan appeal the franchise would have without them. Still, the team is well-run, and stars like David Robinson have made a habit of sticking around San Antonio after their careers are over. 

Overall, the Heat would likely edge out the Spurs in value, thanks to their location and current star power. That doesn’t necessarily mean it will happen in this finals rematch.