If the Trail Blazers’ new ownership group decides Portland is no longer home, the price tag could be enormous - but not necessarily fixed.
A Trail Blazers official recently floated the idea that the NBA could demand a $1 billion relocation fee if the team moves. That number lands alongside the $4.25 billion Tom Dundon’s group paid to buy the franchise, and it would be a massive hurdle even for a deep-pocketed owner. Still, the league’s rules leave room for the fee to come down.
The NBA’s constitution gives owners discretion in relocation cases, and the league can reduce the charge if it believes a move makes sense for the business of the sport. That matters now because Portland and Multnomah County are still weighing whether to help fund a $600 million renovation of the Moda Center in exchange for a 20-year lease.
For now, the team is staying quiet. A Trail Blazers spokesperson said the club is focused on negotiating a new lease and declined to comment further, saying any discussion of a possible move would be speculative.
Relocation in the NBA is not simply a matter of loading the trucks and leaving. The league looks at whether a city can support a team, weighing fan and corporate support, the “business environment,” income levels, population growth and the “size, quality and location” of the arena.
“The extent to which a team can prosper going forward in its existing market will be weighed heavily as leagues generally prefer to keep teams in existing markets rather than incur the highly public and costly process of relocation,” David M. Carter, principal of The Sports Business Group, said in an email. “If Dundon can prove that the city has fallen short, his pathway to moving will become far easier.”
If owners approve a relocation, the league can then impose a “reasonable” fee tied to the value of the new market.
“Essentially, you have to pay an amount commensurate with what the league believes to be the value of the new market,” Carter said in his email.
Past NBA relocations offer some guideposts, though they’re far from definitive. Brandli Stitzel, an associate professor of economics at West Texas A&M University, said the relocation fees for the Oklahoma City Thunder, New Orleans Pelicans and Memphis Grizzlies ranged from 10% to 20% of each team’s value.
Applied to the Blazers’ $4.25 billion purchase price, that would put the fee somewhere between $425 million and $850 million.
But those examples are older, and the market may have changed.
“Some league observers have speculated it could approach $1 billion, though the NBA has never disclosed the methodology it would use,” Stitzel said in an email.
Even then, the league could decide to go lighter. If owners believed moving the Blazers would benefit the NBA, the constitution appears to leave room for a lower fee - or even none.
“The NBA’s Board of Governors has broad discretion over relocation decisions and fees, so a reduction or waiver is theoretically possible,” Stitzel said. “That said, there’s no historical precedent for a fee being waived, and in my view it would be surprising if it happened here.”
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