Joe Lacob and his investment group paid a then-record $450 million to outbid billionaire and Oracle founder Larry Ellison in the auction of the Golden State Warriors more than a decade ago. The deal closed at the end of 2010, and Lacob was faced with the issue of how to monetize a team that had made one playoff appearance over 16 years while playing in one of the NBA’s oldest buildings.
He turned to Rick Welts, who had built the Phoenix Suns into a financial powerhouse—and set the previous record for an NBA franchise sale price of $401 million in 2004—after a decade-plus working in the league office. Welts established a commercial juggernaut in the Bay Area, with a bit of help from Steph Curry, Steve Kerr and five straight NBA Finals. He will retire as team president and COO at the end of the season, having turned the Warriors into one of the world’s most valuable sports franchises.
“I’ll never forget the day we introduced Rick to the media as our president in 2011,” Lacob said in a statement announcing the news. “He noted the Warriors franchise was always viewed as a sleeping giant that could be very successful if it ever got into the right hands. Well, there were no better hands than those of Rick Welts, and his intuition proved to be spot-on as his leadership, vision, creativity and relationship-building enabled us to reach heights never seen before in the NBA on the business side.”
The Warriors were valued at $5.2 billion in Sportico’s January NBA franchise valuations, second to the New York Knicks. The only North American franchises worth more: the New York Yankees and Dallas Cowboys.
Sportico reported last week that private equity firm Arctos Sports Partners is buying roughly 5% of the team in a deal that values the club at $5.5 billion. The NBA recently loosened its rules to allow institutional investors, and the Warriors deal is believed to be the first private equity investment.
“To have had a front row seat to the growth of the NBA from where it was in the late 1960s to its place today as one of the most respected and successful leagues in sports on a global stage has been an incredible privilege,” said Welts. “The first day I met Joe Lacob and Peter Guber, I wanted to be a part of building what I knew could be a special organization.”
The Warriors’ recent dynasty, the greatest five-year run in sports history by one metric, helped supercharge demand for tickets, sponsorships and suites, as the Warriors prepared to open the $1 billion Chase Center in 2019. It locked in more than $2 billion in contractually obligated revenue ahead of the first season. The Warriors’ naming rights deal with Chase is worth roughly $300 million over 20 years, while its $20-million-a-year jersey patch deal with e-commerce giant Rakutan is an NBA-high. The team has more than 40,000 fans on its season-ticket waiting list and ended the 2019-20 season with a sellout streak of 377 straight games.
The Warriors are the first NBA team to generate $100 million in sponsorship revenue in a single year and will earn roughly $700 million in revenue during a full season with fans and one round of playoffs, or $200 million more than the Knicks.
While Welts built the Warriors and Suns into model NBA franchises, his biggest impact might be felt off the court. He became the highest ranking executive in men’s professional sports to publicly announce he was gay, which he disclosed in a 2011 New York Times story.
Welts spent 46 years overall in the NBA, starting as a ball boy for the Seattle SuperSonics when he was 16 and eventually rising to become Seattle’s public relations director. He worked 17 years in the league office and was responsible for creating NBA All-Star Weekend in 1984 and the marketing for the U.S. “Dream Team” in 1992. He was inducted into the Naismith Memorial Basketball Hall of Fame in 2018. Welts will stay on with the Warriors as an advisor. The team said a new president would be named within a week.
“Rick Welts played a transformational role in creating the modern NBA,” said NBA commissioner Adam Silver. “His extraordinary vision, leadership and humanity have defined his Hall of Fame career, which has set the standard of excellence in the sports industry. I had the tremendous good fortune to learn about the business of the NBA and its teams directly from Rick in my early years at the league office and have always appreciated his friendship and generosity.”