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Benson's Pelicans Investment a Slam Dunk

Team valued at $1 billion, a nearly 200 percent increase since its 2012 purchase



Tom Benson bought the New Orleans Pelicans from the NBA for $340 million in 2012. In the six years since, he has seen the value of the team increase 194 percent. In the 2018 Business of Basketball rankings, their 21st annual valuations of the NBA’s 30 teams, Forbes estimated the Pelicans’ value at $1 billion. That’s a $660 million increase on Benson’s original purchase price — quite the ROI.

While the Pelicans are ranked as the least valuable NBA franchise, this year’s estimated team value is a $250 million, or 33 percent, increase compared to their $750 million valuation a year ago. The team had an estimated $204 million in revenue with $37 million in operating income during the 2016-2017 season, compared to $156 million in revenue with $16.7 million in operating income the year before. Those are increases of 31 and 122 percent in revenue and income, respectively.

Forbes estimates the average NBA team is worth $1.65 billion, 22 percent more than a year ago, with $246 million in revenue and $52 million in operating income.

According to the latest rankings, the New York Knicks, worth $3.6 billion — a 9 percent increase compared to 2017 — are the NBA’s most valuable franchise, followed by the Los Angeles Lakers ($3.3 billion), Golden State Warriors ($3.1 billion), Chicago Bulls ($2.6 billion) and Boston Celtics ($2.5 billion).

The Philadelphia 76ers had the largest increase in value, up 48 percent to $1.18 billion.

The Knicks led the league in operating income with $140 million, while only the Cavaliers were estimated to have lost money (-$6.2 million).
Forbes previously cited Tom Benson’s long-running legal proceedings over succession of the Pelicans and the New Orleans Saints in their explanation for the team’s last place ranking. The custody battle over both teams now settled, the Pelicans have been seen as a much more stable franchise for commercial partners and advertisers.

The Pelicans have one of the sport’s best frontcourts with All-Stars forward Anthony Davis and center DeMarcus Cousins. Before Cousins suffered a season-ending injury in February, the Pels had seen an increase in ticket sales and were well positioned in the playoff race.

While the Pelicans don’t talk finances as a matter of policy, Dennis Lauscha, president of the New Orleans Pelicans, told Biz in an October 2017 interview that ownership and management have made several changes to improve the team and align the franchise more closely with the city and region.

“When we bought the Pelicans we made promises in regard to rebranding the team,” Lauscha said. “We did that. We said we wanted to be a playoff team. We did that. Now we need to improve on it. We’re investing. We invested in DeMarcus Cousins this year. We said we were going to get a new radio deal and TV deal and we’ve been able to check all of those boxes on things we wanted to accomplish.”


Top 10 Most Valuable NBA Teams

Forbes estimates the average NBA franchise is now worth $1.65 billion. That’s a 22 percent increase compared to a year ago.
Rank Team Value % Change Revenue Operating Income
1 New York Knicks $3.6B 9% $426M $140M
2

Los Angeles Lakers

$3.3B 10% $371M $136M
3 Golden State Warriors $3.1B 19% $359M $120M
4 Chicago Bulls $2.6B 4% $281M $95M
5 Boston Celtics $2.5B 14% $257M $85M
6 Brooklyn Nets $2.3B 28% $273M $52M
7 Houston Rockets $2.2B 33% $296M $95M
8 Los Angeles Clippers $2.15B 7% $257M $35M
9 Dallas Mavericks $1.9B 31% $233M $21M
10 Miami Heat $1.7B 26% $253M $63M
  NBA Average $1.65B 22% $246M $52M
30 New Orleans Pelicans $1B 33% $204M $37M

Chris Price is an award-winning journalist and public relations principal. When he’s not writing, he’s avid about music, the outdoors, and Saints, Ole Miss and Chelsea football. Price also authors the Friday Sports Column at BizNewOrleans.com
 
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