Red Bull GmbH, the globally recognized energy drinks giant, is reportedly exploring the idea of extending its reach in the sports world by acquiring an NBA franchise, potentially centered in the vibrant, flashy landscape of Las Vegas.
The insight emerges from sources seeking anonymity, reporting tentative talks that Red Bull, already entrenched in the high-intensity arena of sports, is debating the merits of setting up an NBA team in America’s glitzy casino hub. The conjecture around expanding the NBA scene is not new; the market has been rife with talks of Las Vegas and Seattle vying for the crown in this unannounced contest. The word has been on the streets so long, it’s one of the sports world’s most poorly concealed secrets.
In a significant revelation last year, Commissioner Adam Silver disputed the rumors of an impending expansion of the league. However, he made it clear that this matter was far from being shelved, slated for discussion following the drafting of the association’s new broadcast rights agreement. Early murmurings suggest a multi-network deal which could set the association a staggering $76 billion richer over the next 11 years.
While Silver has indeed not discounted the addition of teams, he has hinted towards a two-team expansion, taking the NBA’s tally to 32 from the existing 30 franchises.
Red Bull’s robust financial stance further strengthens its NBA team ownership aspirations. While the company, being privately held, does not have to disclose earnings and sales on a quarterly basis, it reportedly amassed a revenue of $10.9 billion the past year – comfortably doubling the figure from a decade ago. Increase in operating profits and sizeable investments in athletic sponsorships signal that the company is capable of shouldering the expected $4 billion required to establish an NBA team in Las Vegas.
Though it is conceivable that they may seek financial partners in acquiring an NBA team, given that it doesn’t have $4 billion in ready cash and would prefer to dodge debt issuance.
Red Bull’s financial clout can be attributed to its unique approach to sports. Taking a detour from the traditional model of food and beverage companies, Red Bull chooses to own teams outright. Their sports investments include two F1 teams, the New York Red Bulls in the Major League Soccer, and RB Leipzig in the German Bundesliga. Other stakes include ownership in Leeds United of the English Premier League and a controlling interest in a cycling team.
The journey towards obtaining an NBA franchise in the city of sin is not without its competitors. Should the NBA officially announce Las Vegas as the host city, the list of eager bidders stands ready. Powerful personalities like NBA legends LeBron James and Shaquille O’Neal have expressed interest to be part of owning ventures for a Vegas NBA team.
The LVXP, spearheaded by real estate developers, aim to reenvision the Wet’n’Wild near the Fontainebleau and Sahara casino hotels. It could potentially include an NBA-grade arena, positioning them in the running for owning the new team.
Meanwhile, top contender Oak View Group has committed to a $10 billion project envisaging a casino resort and an entertainment district. Notably, this massive project will encompass an NBA-level arena while requiring no public financing.
