Key facts
- Real Madrid has signed a new 10-year contract with EuroLeague.
- EuroLeague aims to raise nearly €3bn from external investors.
- The NBA is seeking final bids for franchises in a planned 16-team European league.
- NBA franchise bids are reportedly between $500 million and $1 billion.
- EuroLeague is transitioning to a franchise model, attracting 17 proposals from new entrants.
EuroLeague basketball has secured a crucial commitment from Real Madrid, Europe's most prominent club, amidst competing expansion plans from the NBA. Real Madrid has reportedly signed a new 10-year deal with EuroLeague, a move expected to be ratified this week.
This development comes just days before the NBA's deadline for "final bids" from investors for franchises in its proposed new European league, slated to launch next year. The NBA has engaged advisors Raine Group and JPMorgan to facilitate the sale of franchises, with price tags ranging from $500 million to $1 billion. While new markets like London have seen strong demand, with bids exceeding $1 billion, established European powerhouses such as Real Madrid, Barcelona, and Paris Saint-Germain have reportedly balked at these entry fees, believing their participation is more critical to the NBA's European venture than vice versa.
EuroLeague executives are presenting a vision for growth that includes a €3 billion package from external investors over the next few years. This funding is intended for distribution among its 13 permanent franchise-holders, including Real Madrid, and is structured to include expansion fees, a windfall based on forecast growth, and a fund for infrastructure development. This approach emphasizes clubs retaining ownership, contrasting with the NBA's model.
Real Madrid's renewed commitment strengthens EuroLeague's negotiating position with the NBA. The NBA has expressed openness to collaboration but has faced deadlock in multiple rounds of talks. Teams' current contracts with EuroLeague do not explicitly prevent them from joining an NBA project, provided a penalty fee of approximately €10 million is paid. However, Real Madrid's new deal aligns them with other major clubs, creating a stronger bloc for potential concessions from the NBA. EuroLeague is also adopting a franchise model, aiming to provide teams easier access to capital, with 17 proposals already received from potential new entrants, including bids from London, Berlin, and the Middle East.
