Red Bull Rivals for Potential NBA Team in Las Vegas
Energy drink giant Red Bull is rumored to be eyeing a foray into the NBA by potentially purchasing a new franchise, possibly stationed in gambling hotspot Las Vegas.
Sources close to the situation divulged to Bloomberg that Red Bull is engaging in preliminary discussions about buying an NBA team, with a focus on an expansion team based in the US gambling mecca. Speculation over NBA expansion has been a persistent topic, and the competing interests of Las Vegas and Seattle in this unofficial race are well-known industry secrets.
Last year, Commissioner Adam Silver dismissed speculations about expansion plans for the league, but he hinted that the issue could be revisited after the league's new broadcast rights deal was finalized. This deal is expected to be finalized soon, with recent reports indicating that several networks could collectively pay the NBA $76 billion over 11 years.
Silver has not categorically ruled out expansion and hinted that if it were to happen, it would likely involve the addition of two teams, increasing the league's total to 32 franchises from its current roster of 30.
Red Bull Has the Financial Muscle to Buy an NBA Team
Although Red Bull doesn't publicly disclose its quarterly earnings and sales like publicly-traded companies do, its revenue reached $10.9 billion last year, more than double the figure from a decade prior.
The Austrian company reported an increase in operating profits last year and spent over $1 billion on athletic sponsorships in 2022. These figures suggest that Red Bull has the financial resources to cover the estimated $4 billion price tag of an NBA expansion team in Las Vegas.
It's possible that Red Bull would seek a financial partner to jointly fund the acquisition of an NBA team, as it reportedly doesn't have $4 billion in cash reserves and prefers to avoid taking on debt.
A substantial portion of Red Bull's financial clout comes from its innovative approach to sports. Unlike other food and beverage companies, which typically limit their involvement to arena, event, and athlete sponsorships and endorsements, Red Bull actually owns sports teams. Its portfolio includes two Formula One (F1) teams, Major League Soccer's New York Red Bulls and RB Leipzig in the German Bundesliga, a stake in Leeds United of the English Premier League, and a controlling interest in a cycling team.
Competition for the Vegas NBA Team Could Be Fierce
If the NBA officially announces that Las Vegas will host a new team, the field of potential bidders is likely to be expansive. Alongside Red Bull, NBA veterans LeBron James and Shaquille O'Neal have both expressed interest in joining ownership groups for a Vegas team.
Furthermore, real estate developer LVXP seeks to redevelop the old Wet'n'Wild near the Fontainebleau and Sahara casino hotels, aiming to include an arena suitable for the NBA. Additionally, Oak View Group has earmarked a $10 billion investment for a casino resort and entertainment district project that could accommodate an NBA-ready arena, with no public funding required.
Among the most likely contenders is Oak View Group, which plans to invest $10 billion in a casino resort/entertainment district project that would include an NBA-ready arena, without requiring any public financing.
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