NBA Commissioner Adam Silver is yet to devise a plan for sovereign wealth funds to fully buy into NBA ownership

Sovereign wealth fund investments in US sports are inevitable and NBA Commissioner Adam Silver is well aware. This growing trend has spread throughout the world of sports in the past years and the league representative is yet to develop a plan to allow these inventors to buy into full ownership. On purpose, maybe?

Silver addressed the situation on Monday explaining that even though these funds are now able to invest in the NBA, there is no pathway ‘in the foreseeable future’ for them to fully take controlling ownership of a club.

“I don’t want to say what could ever happen, but there’s no contemplation right now,” the league administrator said this week in Las Vegas. “I mean, it’s very important to us, putting aside sovereign wealth funds that individuals are in a position to control our teams, be responsible to the fans, be responsible to their partners and to the players.

“It’s very important to us that there be a person [in charge], and this is independent of sovereign wealth funds. I think that in terms of the connection with the community, the connection with the players and their other partners in the league.”

Sorry, Saudis! NBA commissioner Adam Silver defends restrictions on sovereign wealth funds https://t.co/JEGIOt6JAh pic.twitter.com/oA4W4iEiXE

— Daily Mail US (@DailyMail) July 11, 2023

With the newest collective bargaining agreement, investments that come from sovereign wealth funds are permitted to buy into a passive partnership up to 5% of the franchise’s worth.

Qatari buyers, for example, recently purchased a 5% stake n the group that owns the Washington Wizards, WNBA’s Washington Mystics, NHL’s Washington Capitals and others. This deal is considered to be valued at around $4.05 billion.

According to Silver, the NBA is running out of individuals who are wealthy enough to keep investing

It seems that the future of the league depends on international funds, as every year there are fewer and fewer individuals who can keep up their investments in US sports.

Not too long ago, the Commissioner went on the “Dan Patrick Show” to discuss about Saudi Arabian funds in the league:

“I think a bubble would be indicative of sort of irrational valuations,” Silver explained. “I think if you look at the revenues, at least in the case of the NBA being generated by the league, the opportunity for growth, the global market that we’re addressing here, and maybe there’s certain unique aspects to the NBA because of how global our league is.

“I don’t think there’s anything irrational at all. In part, the reason why we’ve opened up investment opportunities to private equity firms, sovereign wealth funds, is because we’re running out of individuals, frankly, who are in a position to write those kinds of checks, and especially when you’re not going to be the control owner of the team.”

With the NBA growing at fast pace, Silver believes that these potential investments are positive.

“To me, I think the investment community is just following that trend and saying this is a true growth opportunity”, he concluded.