The National Basketball Association’s plan to create an investment vehicle that would buy minority shares of its teams has broad support among owners, although some said they wouldn’t participate.

The league said in a March 5 memo to its owners that it was exploring the potential formation of “a new capital vehicle that could purchase passive, minority ownership interests across multiple NBA teams.” The league asked owners for feedback by Sept. 4.

Since then, interviews with about a third of the league’s 30 owners, some of whom were granted anonymity because the matter is private, showed widespread support for the idea, although none committed to participate and most said price would determine whether they did.

“Loved the idea,” Milwaukee Bucks co-owner Marc Lasry said via email. Asked whether his club would participate, the billionaire co-founder of Avenue Capital Group said it would “depend on the price.”

The structure and terms of the vehicle haven’t been finalized, according to the memo, which was reviewed by Bloomberg News. The league said it would discuss the proposal during its owners meeting later this month.

The NBA declined to comment on the feedback it had received from owners.

Long List
One big-market owner said he supported the idea but wouldn’t participate because there’s a long list of prospective investors for stakes in his franchise. Another said he supported the proposal, but said there would be a lot to navigate.

Another owner said that if structured correctly, the vehicle would serve multiple purposes. Among them, the owner said, would be to provide liquidity to minority owners; create a unique asset class for institutional investors; and put an objective market valuation on franchises that can help controlling owners reduce any illiquidity discount.

Dallas Mavericks owner Mark Cuban said he didn’t have an opinion on the proposal. “Doesn’t impact me at all,” he said via email.

The proposal comes as the valuations of sports franchises are skyrocketing. The Brooklyn Nets, for example, recently sold at a record valuation of $2.3 billion. Forbes magazine says the National Football League’s Dallas Cowboys are worth $5.5 billion. The NBA’s most valuable team, the New York Knicks, are worth $4 billion, according to Forbes.

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