What the $12.5 billion sale of the Lakers means for the Knicks and Nets

The valuations of professional sports franchises continue to soar. Look no further than the Los Angeles Lakers being sold for $12.5 billion on Wednesday — less than a year after being sold for $10 billion.

“If you look at this Lakers news, it certainly is a positive for every other NBA team,” said Daniel Roberts, the editor-in-chief at Front Office Sports. “Maybe the Knicks especially, but arguably, there’s no reason it’s any more of a boost to the Knicks than every other team.

“Every NBA team just probably got more valuable because you’ve reset the ceiling, you’ve raised the ceiling here.”

Forbes’ latest list of NBA franchise valuations, published in January, had Golden State valued No. 1 at $11 billion. The Lakers were second at $10 billion and the Knicks third at $9.75 billion. The Nets came in ninth at $5.6 billion.

Beyond the Knicks, Nets and other NBA teams, Roberts added that the valuations for NFL, MLB and NHL franchises “seem to have no ceiling, and they’re going to keep rising dramatically.”

A key reason why prices keep going up, Roberts explained, is because owning a piece of these franchises is guaranteed to be valuable.

“Every time I think valuations are starting to top off, they keep going higher,” said Kurt Badenhausen, a sports valuations reporter for Sportico. “And I think there is more room to grow. They are scarce assets.”

As a result of the booming prices, ownership groups are expanding to multiple investors and dipping into private equity — something even the Yankees are doing. Josh Kushner and Bob Iger are buying the Lakers, but Roberts said he’s sure there will be more investors because they “do not have $12.5 billion between the two of them.”

As for why the Lakers sold for $2.5 billion more than they did when Mark Walter purchased a controlling interest in the team from the Buss family last year, Roberts said it had nothing to do with what happened on the court. Rather, it was more along the lines of what people buying the team were willing to pay.

Roberts highlighted that it helps to be winning when a franchise sells, which is why the Knicks — should they become available, although there’s no indication of that being the case — could be the most expensive franchise in the NBA.

“I don’t know if Jim Dolan is interested in selling, but if he were to sell the Knicks, I am sure that he could break what just happened with the Lakers,” Roberts said.

The aftermath of the Lakers sale helped trigger a 5.3% gain in shares of Madison Square Garden Sports. According to Dow Jones Market Data, MSG Sports stock closed up 5.25% and at $414.12, a new all-time closing high and the largest percentage increase since Feb. 18.

“I think it just opened the eyes to maybe more shareholders that here’s another data point in the soaring valuations in the NBA,” Badenhausen said.

Badenhausen said the Lakers, Knicks and Golden State are “in a league of their own” at the top of NBA valuations. He said the next group of teams includes the Nets, Clippers, Celtics, Bulls and Heat, among others.

Badenhausen agreed that the Lakers’ sale benefits every other NBA team.

“Any time an NBA team is going to sell for almost 20 times revenue, that makes every NBA owner happy,” he said.

The Lakers and Knicks are as close to an apples-to-apples comparison as there is in the NBA. So the sale of the Lakers undoubtedly was a boost for the reigning NBA champions’ potential value.

“I would think the Lakers or Knicks are 1 and 2 in the NBA,” Roberts said. “So, this sets a new floor for at least the most iconic and valuable franchises in the best media markets.”