It’s only been 16 years since Joe Lacob led an investment group that, using an exploding offer, shockingly purchased the Golden State Warriors for $450 million.
And now, less than two decades later, Lacob and Co. have seen their investment not double, not triple, but … 32uple? I’m not sure there’s a word for that.
Sportico recently released their valuations of the major sports franchises, and the Warriors topped the NBA at a staggering $14.5 billion, more than 32.2 times larger than the figure that
Lacob, Peter Guber, and a group of investors gave to Chris Cohan in July of 2010.
Which brings us to an intriguing question: how much higher can they go?
The Warriors have, it seems, utilized every tool to max out their valuation. They employ one of the most popular players on the planet, Steph Curry, who recently signed an extension. With a dynasty still fresh in everyone’s minds, they remain supremely popular with a loyal fanbase, and led the NBA with nearly $900 million in revenue last season. And then there’s the big kicker: the state of the art arena, the Chase Center, that the ownership group erected in 2019, and the other supremely popular basketball team that plays there.
Just two years into their existence, the Golden State Valkyries top Sportico’s WNBA valuations at a whopping $850 million. While the Valkyries are also owned by Lacob and his team of investors, they are a separate entity from both the Warriors and the Chase Center. Which means that when calculating the value of the Warriors, one has to delve into the highly unlikely hypothetical that Lacob sells the Warriors but not the Valkyries. In that case, the new owner would be purchasing the Dubs and the Chase Center (which was privately funded), knowing that the Valkyries are a money-printing tenant at the arena.
The Valkyries, of course, aren’t the only outside entity bringing money to the ownership group via the Chase Center. By building a high-end arena in a trendy part of town, the Warriors have become the landlords to the biggest concerts in the Bay Area. Just in the next few weeks, the Chase Center will play home to Doja Cat, Phoebe Bridgers, the Jonas Brothers, and Journey, among others.
It’s hard to imagine how the Warriors could maximize their franchise valuation any more than they already have, which brings us to a final point: when will the NBA bubble burst? In 2014, Steve Ballmer purchased the LA Clippers for what was, at the time, considered an outrageous price of $2 billion. Fast forward 12 years and the least valuable team in the NBA, the Memphis Grizzlies, is valued at $4.2 billion. The market is, quite simply, exploding. Curry is a year older and the Dubs are a year further removed from their dynasty, and yet their valuation rose by 28% year-over-year.
For now, there’s no end in sight, but eventually the bubble will pop. Until that happens, we’re left to wonder just how high it can climb.
Then again, I’m reminded of a quote that Lacob had the first time the Warriors’ valuation surpassed the 10-figure mark. When asked how he felt about the team being valued at that figure he said, in essence, that the number was false, because there’s no chance he would sell the team for that figure. All these years later, that remains true. Offer Lacob $14.5 billion for the Warriors and the Chase Center and he’ll say no in a heartbeat; offer him $850 million for the Valkyries and he’ll say no just as quickly.
But everyone has a price. I wonder what Lacob’s is?
