The NBA’s Golden State Warriors plan to be more than a basketball team

Stephen Curry # 30 of the Golden State Warriors drives to the basket during the fight against the Washington Wizards on March 14, 2022 at the Chase Center in San Francisco, California.

Noah Graham | National Basketball Association | Getty Images

The Golden State Warriors are getting started again.

After two years of pandemic challenges, the NBA franchise has resumed its plan to become the most valuable sports franchise in the world. The Warriors are valued at more than $ 5 billion, up from a value of $ 3.5 billion before the pandemic, and are expected to darken $ 700 million in revenue this year, according to people familiar with the team’s finances.

The club has a plan to drive growth that includes a new cash flow in the newly launched Golden State Entertainment division. The venture follows similar efforts to roll out an internal ticketing exchange, a partnership with a cryptocurrency firm and leveraging the blockchain sector to monetize NFTs or non-fungible tokens.

All just two years after the Warriors moved into the $ 1.4 billion Chase Center in San Francisco, where the team makes money on surrounding real estate and has a tenant and a shareholder in Uber.

The team’s president and Chief Operating Officer, Brandon Schneider, says the projects are the key to becoming a force from the basketball court that it is on.

“Disney started out as an amusement park,” Schneider told CNBC. “The Warriors started as a basketball team. Look at what Disney has become and look at what the Warriors are becoming.”

Schneider spoke to CNBC on April 14, a day removed from his first anniversary of being announced as Warriors president. He took over the position from longtime CEO Rick Welts, who retired last year.

He said the Warriors’ goal is to transform into “global leaders in experiences and entertainment.” And he added that the organization would “harness the power of the brand” and innovate around technology “because we are in the Bay Area, the world’s technological epicenter.”

Takes on the Knicks

If the Warriors’ strategy strikes, it could place the team to surpass the New York Knicks as the most valuable NBA franchise.

The Knicks are valued at $ 5.8 billion and are ranked third on Forbes’ most valuable sports team list behind the NFL’s Dallas Cowboys, worth $ 6.5 billion, and the MLB’s New York Yankees, worth $ 6 billion. Warriors is in sixth place.

“With the track they’re on and the effort they put into the franchise, it would not surprise me,” said sports rating expert Bryce Erickson, senior vice president at consulting firm Mercer Capital. “I certainly think it’s possible.”

Sports ratings are often inflated and largely hypothetical – apart from formal and public sales. Pundits use multiples of revenue and add operating revenue, adjusted for revenue sharing, and all other assets associated with the club, which may include real estate to reach a figure.

But aside from high valuations, the Warriors are already outperforming their competition: In 2021, the Warriors led the NBA in basketball-related revenue by $ 474 million in 2021, according to Forbes. Meanwhile, the Knicks’ revenue fell to $ 421 million from $ 472 million, likely as a result of pandemic-related losses.

Add revenue from other events in the Chase Center and Warriors’ other incipient revenue streams, and the team’s revenue is much higher.

Stephen Curry # 30 of the Golden State Warriors celebrates after making a three-point basket to break Ray Allen’s record for most of all time as Alec Burks # 18 of the New York Knicks look on during their match at Madison Square Garden on the 14th. December, 2021 in New York City.

Al Bello | Getty Images

Andrew Lustgarten, president and CEO of Madison Square Garden Sports – the holding company behind the Knicks – said the company views sports gambling as an opportunity to generate revenue.

The team entered into agreements with Caesars and MGM after New York approved sports betting. California has not yet legalized the practice.

“MSG Sports has several growth opportunities across its companies and brands,” Lustgarten said in a statement to CNBC. “The Knicks portfolio has a huge upside in a number of key areas, including ticket sales, premium hospitality, our jersey brand sponsorship, expanding sponsorships in international markets and our new mobile sports betting and crypto partnerships.”

Erickson said “local benefits and market size benefits” could help the Warriors take on the Knicks in revenue. He was referring to the HBO series “Winning Time”, which tells about the Los Angeles Lakers’ progress in the 1980s in the context of innovation.

“Things are changing,” Erickson said. “Before (Jerry Buss) bought the team, what were the Lakers? They were a fighting franchise in a fighting league. And their timing was impeccable. So if to say that more than 40 years later, the Warriors can not have the same effect? ‚Äč‚ÄčThere is not to say that they could not, especially from an economic point of view. “

Asked if the Warriors are aiming for the top spot in sports, a humble Schneider downplayed the mission.

“We think much bigger than that,” he said. “I understand why people focus on it and why it’s interesting, but (owners Joe Lacob and Peter Guber) – they’ll never sell Warriors. So compared to what a third party wants to value our organization, it’s not our focus. “

‘Just scratches on the surface’

Warriors’ new GSE division is expected to create internal content in a partnership with Mandalay Entertainment, a company founded by Guber. GSE will be producing documentaries, releasing a new single featuring K-pop star BamBam and exploring music festivals.

But most importantly, GSE is bringing Warriors in line with future licensing revenues from streaming giants like Apple, which this year welcomed sports content on its platform, and Netflix, which will have to be creative to solve a subscriber problem.

“We’ve been in the content business for many years,” Schneider said. The Warriors are already helping the NBA break records for TV viewership. “We think a lot about directly to the consumer.”

Brandon Schneider, Golden State Warriors, speaks next to an arena model at a Warriors sales office next to the future Chase Center on Tuesday, March 14, 2017 in San Francisco, California.

Lea Suzuki | San Francisco Chronicle | Hearst Newspapers via Getty Images

In February 2022, Warriors launched SuiteXchange, a ticketing platform for luxury suites inside the Chase Center. It utilizes blockchain technology and allows the team to capture data and transaction fees.

“We believe the Suite Exchange could become the Stub Hub or Ticketmaster for suites,” Schneider said. “This is just scratching the surface.”

Schneider said the Warriors are in discussions with other clubs about using the service, but did not disclose the teams due to privacy concerns.

“This is just the beginning of the beginning,” Schneider said, referring to a motto used by the team’s owners. “It’s become a mantra for us.”

The team also surpassed $ 2 million in NFT sales and earlier this month deepened its partnership with crypto platform FTX, which agreed to a $ 10 million global sponsorship deal with the club back in December.

FTX unveiled a collection containing 3,000 NFTs, one of which includes two tickets to each home playoff game. The NFTs sell for $ 499 each.

Schneider said that as long as the Warriors get creative and include “the right experiences, the revenue will come.”

Investment in basketball

During Welts’ 11-year tenure, the Warriors surpassed the Los Angeles Lakers as the second most valuable team in the NBA.

Welts said at least some of that success is due to franchise star Stephen Curry, who has led the Warriors to three championships since 2015 and become the face of the NBA.

“When your best player is not only the athlete and talent he is, but also the person he is, you have a damn head start in trying to create something special,” Welts told CNBC in 2019.

Schneider has promised that the organization would protect and continue to improve its main attraction – the basketball team.

The Warriors have the highest payroll in the NBA and spend more than $ 180 million on their 2021-22 list as they seek a fourth NBA title in the last eight years. The club welcomed back with franchise star Klay Thompson this season. Draymond Green is still making chaos. And it looks like the Warriors have a rising star in Jordan Poole.

In 2021, the Warriors agreed on a four-year extension with Curry. The deal starts next season and pays the 34-year-old an average annual value, or AAV, of $ 53 million per season, according to Spotrac, a website that tracks sports contracts.

“We have a plan and want to be consistently good, will invest,” Schneider said. “And we’m lucky to have the owners who are willing to invest so much in what we do on and off the pitch. It’s critical and gives us a competitive edge.”

And with Curry locked in, the team’s jersey patch media asset could be on the verge of breaking another NBA sponsorship record.

The Warriors’ deal with e-commerce company Rakuten expires in 2023 and reportedly pays the team about $ 20 million annually. It’s unclear what the Warriors are looking for for a renewal, but by comparison, the Brooklyn Nets landed a league-high $ 30 million per game. year agreement for their patch in 2021 with online trading platform WeBull.

Asked where the Warriors want to be in 2030, Schneider said: “Winning championships, doing great things in society and continuing to grow our global fanbase.”

“When we built the Chase Center, we talked about transforming ourselves into a sports and entertainment company that happened to have a pretty good basketball team as the centerpiece,” he said.

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