Vegas provides a new meaning for the term 'NBA bubble'

Reports indicate bids for the Las Vegas expansion club are coming in at $12-13 billion. This is absolutely bonkers, even by the current standards of sports team valuations.

Good morning. It's Free Newsletter Wednesday. Let's basketball.

ESPN's Shams Charania has news on the NBA's plan to expand to Las Vegas and Seattle in two seasons: the league is going to pick a winning Vegas bidder soon, and the price looks to be around $12-13 billion, or roughly the cost of one (1) Los Angeles Lakers franchise.

That's right: the new Las Vegas franchise is on track to be the most valuable NBA team two years before it plays a single game. The winning bidders will also still need to develop an arena, which is one of the reasons the league is eager to award the Vegas franchise before Seattle's auction is settled. (The other reason, per Charania and logic, is that the Vegas losers might get interested in Seattle.)

Charania also lists the bidders for the Vegas squad, a couple of which have been rumored or reported. Topping the list is Nancy Walton Laurie, a scion of those Waltons, whose husband has served as an owner of an NHL team and who lives near Vegas. Another is a Canadian billionaire whose equity firm is trying to buy sports teams (they were runners-up for the Washington Commanders) and whose website features a picture of a chocolate-dipped banana, which I really hope is an Arrested Development reference. The third group features the owner of the NHL's Las Vegas Golden Knights, multiple Colangeloes and Vinny Del Negro.

The idea of sports team valuation bubble has floated around for years. There has been real risk involved in some of the minor leagues that have started up in non-proven consumer sports (pickleball, lacrosse), real risk in the inor league teams in sports without a rich minor league system. (Is anyone getting rich off of USL or G-League teams?) But the WNBA and NWSL booms, the NFL and NBA booms, even extensive MLS and NHL expansion all indicate that there is still room for growth in major league professional sports in the United States.

This might be the first sign of a froth too far.

Las Vegas has become saturated with sports teams over the past decade. Las Vegas, while growing, is the 29th largest metropolitan area by population in the United States. Only seven NBA teams – Pacers, Cavaliers, Bucks, Thunder, Grizzlies, Jazz and Pelicans – play in smaller metro areas. Among those, only Indiana, Cleveland and New Orleans also host NFL teams in their markets. (The Packers play 120 miles from Fiserv Forum. Milwaukee and Green Bay have huge fandom overlaps but are not the same market.) None of those three NFL-NBA markets smaller than Vegas have NHL teams; one (Cleveland) has an MLB team. (MLB and NBA fandoms are compatible because they play different times of year. The same applies to the WNBA and NBA. NHL overlaps almost completely with the NBA. NFL overlaps substantially.) Among the seven markets smaller than Vegas, only one – Utah – hosts an NHL team.

Vegas has an NFL team, an NHL team, a WNBA team and will soon have an MLB team (allegedly). Where are all of the NBA team fans supposed to come from?

The Las Vegas Raiders are a great example of what faces the Vegas NBA team. Millions of people live or close enough to Vegas to attend games. Those people who care about the NBA almost assuredly already have team allegiances based on where they came to Vegas from or other factors. Can you imagine the first game against the Lakers in Las Vegas? It's going to be a road game for the home game. Games against the Warriors, Suns, Nuggets, Jazz, Kings, the Texas teams and a handful of East teams who always travel well will all be road games for the home team ... possibly for decades. This is not Oklahoma City, where the NBA team becomes an immediate point of pride as the biggest show in town. This is Brooklyn: the NBA moving into a place that already has allegiances or other entertainment options. This is the Clippers: a franchise in a theoretically high-resource city without an organic fanbase for, oh, three decades or so.

The Aces have been a real success due to the WNBA's rise and the Aces' brilliant team-building centered around a player who may very well be the G.O.A.T. in A'ja Wilson. The Golden Knights appear to have phenomenal attendance numbers. What makes these ultra-wealthy billionaires and NBA officials believe that the Las Vegas men's basketball team will develop like those franchises and not the Raiders? Not the Nets? Not the Clippers?

That's where the froth comes in. The NBA officials or other owners aren't going to look too skeptically at a check for $13 billion. It's a check for 13 bleeping billion dollars. The prospective team owners have more resources than they can spend, and see valuations going up up up every year. They are buying the myth that this is the only direction team valuations for the biggest leagues can go. And frankly, it's hard to argue with them, because to date that myth is true.

The last NBA expansion fee, back in 2003 for the Charlotte Bobcats, was $300 million. Since then, the NBA crushed the players' union a couple times, the cable television industry died and smartphones arrived. Those all have been factors in exploding franchise values. What's the unknown development that will slow or reverse the trend, and will it ever happen? That's the bet these frothy bidders are up against.

The Atlanta Hawks * Don't * Go To Congress

The Atlanta Hawks made an amusing appearance in Washington, D.C. on Tuesday, and I'm not talking about Trae Young at Wizards training camp. The U.S. Senate Judiciary Committee is, for some reason, holding hearings on former special counsel Jack Smith's dead investigation into President Trump's attempts to overturn the 2020 election. Republican Missouri Senator Eric Schmitt thought he had caught Smith in a lie about visiting Atlanta in February 2024 to see a Hawks game against the Warriors just as Fulton County district attorney Fani Willis' own investigation into Trump's attempts to do some election racketeering in Georgia was unraveling. The conspiracy, I guess, is that Smith went to Atlanta to discuss their attempts to pin crimes on Trump with Willis, and saw a Hawks game as a treat.

During the questioning, in which Smith is befuddled by the accusation that he was lying about going to see the Atlanta Hawks, Schmitt accuses Smith of perjuring himself, says he has proof from a series of text messages from Smith's security detail, and calls Smith a "dirtbag."

It turns out that Smith was attending a game between the Iowa Hawkeyes and Maryland Terrapins in College Park, Maryland, which is much closer to D.C. than Atlanta. Smith said he attended to see Caitlin Clark when she came to town. Smith unraveled the confusion as Schmitt hurriedly tried to move on. Democratic Minnesota Senator Amy Klobuchar wanted to hang on the moment a bit longer. (Clock the staffer over her left shoulder. He is positively giddy about the error. Also, there are a couple minutes in the middle of this video you can skip if you don't want brain damage.)

I, too, have never gone to Atlanta to see the Hawks play. And if I had, I would not admit it. Nor have I seen the Iowa Hawkeyes, the Seattle Seahawks, the Chicago Blackhawks or Connie "The Hawk" Hawkins play live, nor have I been to Hawks, Ohio.

Here's The Hill's summary of the Hawks' moment in the spotlight. It notes that Schmitt has buzz as a potential future running mate for a theoretical J.D. Vance candidacy. It appears they are trying to Voltron up the least ball-knowing ticket of all-time.

More

Paul Flannery on whether the Celtics are still a contender.

Mike Brown says the Knicks still have not decided whether to visit the White House. No NBA champ has visited during either of Trump's terms. James Dolan is best buds with Trump, so that's a political and smart answer by Brown. These Knicks have near 100% approval rating – even fans of rival teams appreciate them – but you hand that dude a jersey and it's going to get pretty awkward in some circles.

This year's all-too-brief referee focus at the beginning of the season will be offensive push-offs. Anti-fans of contact-seeking pump fake jumpers are distraught.

The Athletic reports that the NBA is moving toward agreement on new European clubs owned by some of the major soccer club owners on the continent, which might be a sign that the NBA is not going to move forward with simply folding in the Euroleague. Hmm.

Pablo Torre finds some documentation of Kawhi Leonard actually showing up to one of his apparent no-show jobs. It ends up being a $1.8 million job to take photos with Marines for an hour on behalf of Boingo Wireless, who never did anything public with the photos.

I also quite enjoyed Pablo's recent piece with Mother Jones on Life Surge, a scam that leveraged Christian celebrities including Joe Mazzulla and David Robinson to pull targets into, well, a scam. Mazzulla, who had appeared at one event, immediately separated himself from Life Surge after the report dropped and said he had no idea they were scamming attendees.

One of those "get ready to learn Chinese, buddy" jokes finally paid off. D'Angelo Russell is signing with the Shanghai Sharks.

Henry Abbott tries to decode a 90-minute Sam Presti press conference.

OK, that's all. Be excellent to each other.