The prospect of NBA expansion has long been a subject of discussion, though tangible progress has been slow. In July, Commissioner Adam Silver indicated that team owners had directed the league to thoroughly evaluate potential expansion, suggesting that new teams might soon join the roster.
Nevertheless, Dallas Mavericks minority owner Mark Cuban expressed doubt about immediate NBA expansion. On the DLLS Mavs podcast, Cuban detailed two primary reasons why he believes adding new teams is not a viable short-term solution for the league.
The “Loan” of Expansion Fees
`The expansion fee is just a loan,` Cuban said. `You loan me let`s say its $6 billion and I pay back that loan. I give you 1/31 — because there`s 30 teams now, there will be 31. I get 1/31 of the TV money, and then it`s only a question of how long it takes. So if the TV money, let`s just make it an easy number, is $100 million, and it`s $6 billion so that means in 60 years the loan will be paid off with no interest. So why split up the pie any further?`
Cuban argued that the substantial expansion fee essentially functions as an interest-free loan. He illustrated this by positing a $6 billion fee: `If you loan me $6 billion,` Cuban explained, `I repay that loan, and you, as one of 30 existing teams, now get 1/31st of the TV revenue. With a hypothetical $100 million in TV money, it would take 60 years for the loan to be repaid without any interest. Therefore, why would current owners want to further divide the existing revenue streams?`
Revenue Sharing Concerns for Owners and Players
Cuban then proceeded to clarify his second point.
Cuban`s core argument is that introducing more teams necessitates a wider distribution of revenue, an undesirable outcome for many owners. Larger market franchises already generate a disproportionately high share of basketball-related income but receive a smaller percentage back due to revenue sharing with smaller market teams. Expanding the league, particularly into less lucrative markets, would further diminish the returns for high-earning teams such as the Knicks and Lakers.
This financial strain extends to the players. Their earnings are already constrained by the restrictive Collective Bargaining Agreement (CBA) and the stringent second tax apron. The recent offseason demonstrated teams` extreme caution with spending to steer clear of this punitive threshold. For instance, the Celtics notably traded key players from their championship-contending squad to circumvent the severe financial penalties associated with operating as a high-expenditure organization.
Given the restrictive nature of the current CBA and the potential for future expansion, Cuban anticipates the players` union will exercise its opt-out clause following the 2028-29 season, aiming to renegotiate more favorable terms.
`I would not be surprised if the players decide to opt out,` Cuban stated.
Support for a European League
Despite his skepticism regarding domestic expansion, Cuban voiced strong support for the NBA`s rumored initiative to establish a league in Europe.
`That simply represents a new revenue stream, and basketball is a global sport,` Cuban elaborated. `Therefore, I view it as a net positive if they can successfully implement it.`
The NBA already enjoys a strong and expanding presence in Europe. Considering the abundance of international talent in the league presently, further penetrating the European market seems strategically sound. If a European league proves more financially advantageous, it could potentially sideline the conversation about expanding within the United States.
