NBA expansion is fundamentally a financial decision. If the league were to add two teams at the $2.5 billion expansion fee it wants according to ESPN's Brian Windhorst, each franchise would get a sorely needed $166.7 million infusion of cash to help offset all of the revenue lost during the current pandemic. That $5 billion windfall would be roughly 58 percent of what the league took in during the entire uninterrupted 2018-19 season, and it would come with no associated short-term costs. Players wouldn't see a cent of that money.
Expansion is not imminent. It probably isn't even likely. But commissioner Adam Silver himself has acknowledged the possibility, and if the league acts upon it, it will do so purely for financial purposes. It wouldn't be a basketball decision, but it would have major basketball ramifications.
We've covered the financial side of the equation in depth here, but must also address the on-court consequences of adding teams. So with expansion back in the basketball world's consciousness, we must address what those basketball consequences would be, and what decisions the NBA needs to make before it can consider moving forward with such a plan.
For competitive and logistical reasons, the Eastern and Western Conferences need to be balanced. The same number of teams need to play in each of them. Depending on which markets the league chooses for its two theoretical expansion slots, that might never become a problem. But things get dicier if the league picks the two current favorites: Seattle and Las Vegas. Neither is a geographic fit for the Eastern Conference, but adding both to the Western Conference would create an imbalance.
To restore balance, the league would need to move one current Western Conference team over to the East. There are three feasible candidates.
- Memphis Grizzlies: Memphis is literally the eastern-most city that currently hosts a Western Conference team. If the conference titles are taken literally, the Grizzlies should be the team that makes the move.
- Minnesota Timberwolves: Minneapolis is somewhat isolated in the Midwest. It is only within 700 miles of four other NBA cities: Indianapolis, Chicago, Detroit and Milwaukee. All four of those teams are in the East. That has always burdened the Timberwolves with grueling travel schedules. Putting them in a different conference would alleviate those concerns.
- New Orleans Pelicans: While it is technically further west than Memphis, New Orleans is actually farther away from most Western Conference markets than Memphis because of how far south it is. That includes all four California teams, Portland, Denver, Salt Lake City, Phoenix and our two hypothetical markets of Las Vegas and Seattle.
Major League Baseball solved this problem by making the sale of the Houston Astros contingent upon new owner Jim Crane accepting a move from the National League to the American League. The NBA doesn't have such an easy path because of how desirable a conference swap would be. The Western Conference has produced 15 of the past 22 NBA champions, and between the 1999-2000 and 2017-18 seasons, Eastern Conference teams had a winning record against Western Conference teams in the aggregate only once. Switching from the West to the East has genuine competitive value, which in turn creates financial value. Making the playoffs, at a bare minimum, guarantees two home games and millions of dollars of gate revenue. All three teams are going to want to make the switch. Others will probably argue that they should as well.
The Timberwolves are currently for sale, and that's the wildcard here. Perhaps a new owner is willing to pay a premium if the league is willing to move his new team over to the East. This is the outcome that the league likely prefers, because a higher sale price for the Timberwolves would only inflate the fees it could charge expansion bidders. Conversely, if bids on the Timberwolves are low, the NBA could take a conference switch off the table for them. The Pelicans and Grizzlies would love this scenario.
A battle between the two of them would be fascinating for competitive purposes as well. Their best players went back-to-back in the 2019 NBA Draft, and one of them moving to the other conference would create a new chapter in the story of their rivalry. Would the NBA intentionally push the Pelicans East in an effort to fast-track Zion Williamson's rise as the new face of the league? Might it be interested in possible Finals matchups between Williamson, perhaps the most prominent American up-and-comer, and Luka Doncic, the league's brightest rising international star?
Realignment is the first major issue the NBA would need to tackle if it chose to expand. It wouldn't be the last. Realignment in itself creates the next problem on the agenda.
NBA teams play 82 games against an only partially defined set of opponents. They always play 30 interconference matchups, two against each opponent. That leaves 52 games. Four each are played against the other four teams in their division, and the remaining 36 are divided among the 10 remaining teams in their conference. That allows them to play six teams four times, and the other four three times.
Obviously, adding two teams to the mix makes that impossible. At a bare minimum, this approach would add five games to every team's schedule. Therefore, a new format would have to be made.
If the league is set on 82 games, each team could play 32 out-of-conference games -- two against each possible opponent. That would leave 50 games to be divided among the 15 teams in their own conference. On paper, this creates a divisional complication. There is no way to evenly spread 32 teams across six divisions, so playing each divisional opponent four times would be impossible. An NFL model of four divisions per conference featuring four teams each, could solve that problem and handily fix the schedule concerns. Teams could play their three divisional opponents four times each (12 games), and then their 12 non-divisional opponents three times each (36 games). That takes us to 80.
The league could rotate two extra games against different conference opponents on a six-year basis. It could assign teams two "rivals" that it has to play four times per year. It could schedule those extra games based on storylines entering a given season. It could even leave two blank slots in the schedule to be determined later, possibly for tiebreaking purposes or even as part of an in-season tournament.
But that solution burdens teams in the toughest divisions. Imagine knowing you have an extra game against Doncic or Williamson built into your schedule every season. That might be a pathway to finally reducing the schedule. A 77-game model, for example, could have teams playing all of their in-conference opponents three times. That would abolish divisions altogether and give players the shorter schedules they want. That isn't something that the league has to consider, but it probably should because of the next topic we have to address.
No two salary caps are alike. The league is constantly adding new sources of revenue, and each new CBA changes the formula on which the cap is based. But in the simplest of terms, expansion lowers the salary cap. The cap is determined by projecting the following season's revenue and dividing the total percentage allocated for the salary cap (approximately 44 percent) among the existing teams. Dividing by 32 creates a smaller number than dividing by 30. Each team would get a smaller slice of the same theoretical pie.
That doesn't mean expansion is uniformly bad for players. It adds new jobs, and for a union with far more fringe players than stars, that has value. But even if the loss is minimal, individual players would lose money. That creates an uncomfortable dynamic, because players technically have no say in whether or not the league expands. It is unilaterally an ownership decision. That is laid out in the Collective Bargaining Agreement, but the CBA doesn't last forever. It expires after the 2023-24 season, and both sides can opt out after the 2022-23 season. Angering the players now would only create a more contentious negotiating environment down the line. The league just saw how much revenue was lost by a work stoppage, even if it was out of its hands. It won't want to risk that again.
Some sort of concession is likely if expansion moved forward. That might mean a slightly higher percentage of basketball-related income. It might mean alterations to contract figures that are tied to the cap specifically (such as the max salary, mid-level exception and minimum). It might even mean waiving the constraints that govern typical expansion spending. The CBA outlines a three-year process under which expansion teams gain more access to cap space. They can spend up to 66.7 percent of the cap in their first season, 80 percent in their second and 100 percent in their third. Granting full and immediate access would at least allow for these teams to spend big money immediately, which may placate the union's leadership at the moment of the agreement even if it comes with long-term financial limitations.
The truth is that CBA negotiations are extremely complex, and the revenue split coming in the next one could rise or fall depending on any number of factors. Expansion is just one element that will be considered. But quietly, this is one of the biggest problems that the league will have to address if it wants to add new teams. It has to find a way to satisfy its existing players. It also has to make adjustments for the sake of its incoming players.
There is no clearly defined rule for assigning draft picks to expansion teams before they've played any games. It is done at the commissioner's discretion. The Grizzlies picked No. 6 in their first draft. The Raptors picked No. 7. The Bobcats picked No. 4. Perhaps a potential ownership group could try to buy a higher draft pick with a bigger expansion fee, but ultimately, this is the easiest piece of the draft puzzle.
The lottery is infinitely more complicated because the entire formula relies upon 14 eligible teams. It assigns a set number of lottery combinations to each team based on its place in the standings, but if the playoff format doesn't change, the lottery would have to be tweaked to accommodate two extra teams.
This could give the NBA options to experiment in one of two directions. The obvious one would be to flatten the odds further with the two new teams as an excuse. The current formula gives the three worst teams in the NBA a 14 percent chance at winning the lottery. The fourth-place team currently has a 12.5 percent chance, and the fifth-worth team has a 10.5 percent chance. One possible solution would be knocking the bottom three down to 13 percent, giving the fourth-worst team an extra half percent to get them up to 13, giving the fifth-worst team 1.5 more percentage points so they're at 12 percent, and giving teams No. 15 and No. 16 half a percentage point each, which is what No. 14 currently has. That flattens the odds at both the top of the lottery and the bottom.
An alternative might be cutting the number of teams involved in the lottery at all. With the play-in now a permanent fixture on the NBA's calendar, the league could simply declare the four teams involved ineligible for lottery participation and cut the proceedings down to 12 teams. The danger here would be incentivizing tanking from teams with a chance to reach the play-in, but it would shift the draft closer to its intended purpose of giving the worst teams easier access to the best prospects.
The other complication here doesn't come with such an easy fix. There are currently a total of 113 draft picks over the next seven years that are not currently controlled by their original teams thanks to trades. The protections on those picks vary wildly, and in some cases, last several years into the future. The Rockets, for instance, own a first-round pick that originally belonged to the Pistons that could convey as early as this offseason or as late as 2027, depending on how the protections end up playing out.
Adding two new teams throws a wrench into some of those protections. Imagine a scenario in which a team owns a top-10 protected first-round pick from another team that is only knocked out of the top 10 because two expansion teams that didn't factor into negotiations were shoehorned into that draft. Many such picks convert into second-rounders if they don't convey in a given time period. Some team would wind up in a situation in which it loses a draft pick it otherwise would have received.
There's no easy way for the league to remedy this. It can't retroactively alter protections on preexisting picks. It can't send teams back to the negotiating table either. The NFL has long awarded compensation picks based on departing free agents. That's an approach the NBA could consider in situations in which draft picks are lost based on new teams, but that pushes every team behind them down a slot, which is hardly fair either. This might not be a fixable problem, but it's one that will almost certainly emerge at some point or another if the league expands.
The same could be said of almost every possible problem detailed above. Some of them are going to wind up mattering more than others if the league goes down the expansion route, but preparations for every scenario need to be considered. The league tends to be thorough in these matters. Necessary changes will be made. But just as the possibility of the NBA adding teams needs to be monitored, so too does what it might do to accommodate those teams and the 30 they will be joining once they come.