Red Bull in Mix for Las Vegas NBA Franchise

Posted on: June 22, 2024, 09:23h. 

Last updated on: June 22, 2024, 09:23h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Red Bull GmbH is looking to expand its sports empire and that could reportedly include acquiring a new NBA franchise, potentially in Las Vegas.

F1
Redbull driver Max Verstappen in a practice session for the Las Vegas Grand Prix. The energy drink maker is interested in owning a Las Vegas NBA team. (Image: Autosport)

Unidentified sources close to the matter told Bloomberg that Red Bull is in early talks about buying an NBA team and that its focus on an expansion franchise that would be located in the US casino hub. Speculation about NBA expansion is long-running and the leadership of Las Vegas and Seattle in that unofficial competition is among the worst-kept secrets in sports.

Last year, Commissioner Adam Silver refuted chatter that the league is eyeing expansion, but noted the issue could be addressed after the association’s new broadcast rights deal was sewn up. That is expected to occur over the near-term with recent reports suggesting several networks could combine to pay the NBA $76 billion over 11 years.

Silver hasn’t outright nixed the idea of expansion and has indicated if that happens, it’d be two teams to take the NBA to 32 franchises from the current roster of 30.

Red Bull Has Resources to Buy NBA Team

Red Bull is privately held so it doesn’t publicly report earnings and sales on a quarterly as do publicly traded companies, but its revenue reached $10.9 billion last year, or more than double the figure posted a decade prior.

The Austrian company said operating profits also increased last year and that it spent north of $1 billion on athletic sponsorships in 2022. Those data points imply Red Bull can likely easily digest the expected $4 billion price tag an NBA expansion team in Las Vegas will carry.

It’s possible that Red Bull would seek a partner to finance the acquisition of an NBA team because the company reportedly doesn’t have $4 billion in cash on hand and it prefers to avoid the issuance of debt.

Some of the beverage giant’s financial heft comes from its unique approach to sports. Traditionally, food and beverage companies have opted to sponsor arenas, events, and teams while pursuing endorsement deals with individual athletes. Red Bull actually owns teams, including two Formula One (F1) teams and Major League Soccer’s New York Red Bulls and RB Leipzig in the German Bundesliga. The beverage behemoth also owns a stake in Leeds United of the English Premier League and a controlling interest in a cycling team.

Red Bull Will Face Big Competition for Vegas NBA Team

Should the NBA officially declare that Las Vegas will be home to a new team, the list of bidders is likely to be extensive. Beyond Red Bull, NBA legends LeBron James and Shaquille O’Neal have both said they’d like to be part of ownership groups for a Sin City team.

Additionally, real estate developer LVXP wants to redevelop the previous Wet’n’Wild near the Fontainebleau and Sahara casino hotels with hopes of including an arena fit for the NBA, potentially positioning it and partners for ownership.

Another of the most viable contenders could be Oak View Group, which has said it’s earmarking $10 billion for a casino resort/entertainment district project that would include an arena fit for an NBA team. That project would require no public financing.