Less than two weeks after rejecting the NBA’s initial proposal to collaborate on a European basketball project, EuroLeague on Friday announced an ambitious 10-year growth plan that aims to nearly sextuple its value to $8.98 billion (€7.98 billion).
EuroLeague’s 13 shareholder clubs all approved the 10-year business plan, according to a statement. Under the plan, EuroLeague intends to increase the value of the league and its clubs by boosting commercial revenues and expanding with new teams.
Advertisement
By the end of the 10-year time period, EuroLeague says the collective value of its current licensed clubs should triple, to €5.4 billion ($6.1 billion), while the value of the league itself will increase by roughly 5.7 times, to €7.98 billion.
EuroLeague projects total distributions to its teams will end up being €3.4 billion ($3.8 billion) by the end of the 10-year window, with €2.2 billion ($2.5 billion) coming from revenues and €1.2 billion coming from franchise fees for expansion teams. Currently, the club’s total revenue distribution is about €70 million ($78.6 million), a person familiar with the matter confirmed to Front Office Sports. That figure was first reported by Aris Barkas of Eurohoops.
Right now, EuroLeague has 20 teams—13 permanent shareholders and 7 others that make the league through other means, like winning the EuroCup or receiving short-term licenses. EuroLeague ultimately intends to expand to as many as 24 teams, and as part of Friday’s announcement it said there will be two “potential expansion windows,” in 2027 and 2031. It says there are 15 “binding offers on the table” from teams that want in.
The league says that “the long-term sustainability of clubs remains a central objective of the plan.” It notes that at the moment, only 40% of the licensed clubs are “considered financially sustainable,” but under its new plan it projects all licensed clubs will “achieve financial sustainability by the end of the first phase of its 10-year business plan.”
Advertisement
EuroLeague CFO Xavi Puyada said in the press release that “the value of the EuroLeague and of its clubs is growing very rapidly, and that will only accelerate further as we execute the business plan and the clubs continue with their own progress.”
Friday’s announcement comes not long after the NBA was rebuffed in its initial proposal to collaborate on a European basketball project with EuroLeague. One aspect of the proposal that particularly irked EuroLeague owners was a stipulation that the league pause its planned expansion, which it has no intention of doing.
The proposal also valued EuroLeague at far less than $3 billion, sources told FOS, which is the valuation it’s seeking in any deal. The NBA’s offer “wasn’t even close to that,” one source said.
The NBA’s collective valuation is much higher than even the EuroLeague target, as individual team valuations have risen sharply in recent years. This summer, Mark Walter agreed to sell his majority stake in the Lakers in a deal that valued them at $12 billion—less than a year after he bought the stake at a $10 billion valuation.
Advertisement
The NBA and FIBA, which are working together on the planned European endeavor, issued a statement a few days after that rejection, saying a partnership with EuroLeague “would unlock the game’s enormous potential across Europe for the benefit of clubs, players and, most importantly, fans.”
“The NBA and FIBA remain committed to moving forward with a new professional men’s league in Europe and helping build a stronger, more sustainable basketball ecosystem alongside partners who share our vision of growth, opportunity and the core principles of the European sports model.”
The post EuroLeague Sets $9B Valuation Target in 10-Year Plan appeared first on Front Office Sports.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: Sports.yahoo.com
