Over the last decade, the Golden State Warriors have elevated their franchise into rarified territory. It transitioned from a money-losing club in the NBA’s oldest building to a financial juggernaut in a new $1.4 billion arena. And after sitting out the postseason 17 out of 18 years, the Dubs added four NBA championships to their trophy case. This year, the team tops big-market franchises in New York and Los Angeles as the NBA’s most valuable with a $7.56 billion valuation in Sportico’s ranking, set to be released Tuesday.
The Warriors have separated themselves from the rest of the NBA on the business side of the game. Gross revenue topped $800 million last season, 50% higher than any other NBA franchise. It could reach $900 million this year with a deep playoff run. Golden State must look outside basketball for comps. The Warriors’ revenue gap is even greater than a pair of dominant brands in other sports—the New York Yankees and Dallas Cowboys—which generate roughly 40% and 25% more in revenue than their league’s number two. Those three franchises are the only ones in the world worth $7 billion, with the Cowboys a tick ahead of the Warriors at $7.64 billion.
Yet, Warriors managing partner Joe Lacob is looking beyond the NBA for the club’s next chapter. “Our basketball team will always be our primary focus,” Lacob said in a phone interview. “But I view our future as a sports, entertainment, media and technology company.” He highlights how Disney has diversified its business after starting with animated movies and adding theme parks, fully transforming into a global media and entertainment conglomerate with a $170 billion market value. “There is no reason we can’t do some of those things over the long term,” he said.
Lacob kicked the tires on a lot of teams in different sports before he, Peter Guber and their investor group paid $450 million for the Warriors in 2010. “I was nervous because the team hadn’t performed for so many years with being out of the playoffs, and the business wasn’t very good either,” Lacob said. He cites sponsor and suite revenue stuck in the single-digit millions and losing “a lot” of money on just over $100 million in revenue.
One of his first major hires was Rick Welts, who spent a decade as Warriors president following a successful stint in Phoenix. “Winning follows Rick around,” former NBA executive Terry Lyons said in a phone interview. The club bulked up its sales staff and got a boost on the court, as its win total doubled during the 2012-13 season with a breakout performance by Stephen Curry. The point guard would then lead the Warriors to five straight NBA Finals, winning three, ahead of the opening of the Chase Center in 2019. “The success of a deep playoff run, if we are fortunate enough to have one, creates momentum for future seasons as well,” Josh Proctor, Warriors CFO, said in an interview over Zoom.
The new arena turbocharged the Warriors’ business, but the full scope wasn’t realized until last season after two years impacted by COVID-19. Revenue from sponsorships ($150 million) and premium seating ($250 million) were more than double any other NBA franchise. Per-game ticket revenue was 35% higher. The Warriors have more than $3 billion in contractually obligated revenue.
The only revenue source where the Warriors are not tops is local TV, where they are locked in a below-value deal that pays less than half of the $100 million-plus agreements of the Lakers and Knicks. It insulates the team from the choppy RSN market and creates an opportunity to capitalize as new distribution models are established. Last season, the Warriors led the NBA in local TV ratings for the sixth time in seven years with a 6.98 household rating, nearly double second-ranked Cleveland.
Lacob, who spent three decades at venture capital firm Kleiner Perkins, was one of the leading ownership voices in pushing the NBA to open its doors to institutional money, and the NBA approved the change in early 2021. Three months later, the Warriors became the first team to get an investment when Arctos Sports Partners bought in. The firm more than doubled its stake later in the year to 13%, with both investments done at a $5.5 billion valuation and a discount to a control sale figure.
“We partner with visionary professional sports franchises, and Joe, Peter and the entire Golden State Warriors organization have built one of the most admired and successful front offices in the NBA and in professional sports more broadly,” Doc O’Connor, Arctos co-founder with Ian Charles, said in an email. “They continue to innovate and are one of the most advanced organizations in how they leverage data-driven insights, for both improved on-court performance and an enhanced fan experience.”
The privately financed arena was the first major cornerstone for Warriors, Inc., and the value extends outside the building with its 11-acre development of shops and restaurants, known as Thrive City. It owns a 45% stake in pair of office towers with 580,000 square feet, occupied largely by Uber, and there is an option to build a hotel.
Most of the other Warriors’ businesses are in their infancy. The organization has acquired seven esports teams. SuiteXchange, which serves as a resale marketplace for suite holders, services the Chase Center with plans to add more venues. Golden State Entertainment will produce original content, such as documentaries and collaborations with recording artists on musical releases. It taps the expertise of Guber, who has spent five decades in Hollywood and runs Mandalay Entertainment. The Warriors have also been investing in startups to take advantage of the opportunities afforded major sports properties—the NBA just formalized its own investment approach through NBA Equity. The Warriors organization now includes 550 employees.
“It’s probably in the cards at some point for us to acquire another sports team,” Lacob said. “We know how to monetize, we know how to generate local revenue.” Sportico values the Warriors’ real estate and related businesses at $1.56 billion, the highest in team sports.
The NBA is the most global of the U.S. sports leagues, and the league has granted teams expanded rights to market themselves outside of North America. “We’re a respected brand here, but also internationally, and that’s a huge opportunity that we are just scratching the surface of,” Brandon Schneider, Warriors president, said.
The Warriors have gone all in over the last few years with the league's largest payroll, resulting in a $170 million luxury tax bill last season and will likely be higher this year. The total player costs were a North American record $350 million for the 2021-22 season, including the tax. The club still turned a profit, but it has an opportunity to generate significantly more income. Lacob says the Warriors will not always be a huge taxpayer. "The value of the brand building is worth the massive expense,” he said. "But you only do that if you have a chance to add a title.”
The Yankees and Cowboys have both used their brands and business muscle to expand beyond just being sports teams. In addition to owning a stake in the NYCFC, the Yankees own a stake in the YES Network—the most valuable RSN in the U.S. The Cowboys have expanded with their $1.5 billion Star real estate development in Frisco, Texas. The two clubs started the hospitality business Legends together in 2008.
Lacob isn’t satisfied with being No. 2 off the court or field. “[Cowboys owner] Jerry [Jones] has done a great job with the business of the Cowboys, but we are going to chase him down too,” Lacob said, knowing full well he already has a leg up in one area over his fellow $7 billion franchise owner. “He doesn't have any Super Bowl wins in 25 years.”