NBA Europe: Inter’s Oaktree Fund Overtakes Milan’s RedBird in Franchise Race

Milan is emerging as a key city for the NBA’s ambitious European expansion, with both Inter and AC Milan vying for a franchise in the planned league set to launch in 2027 or 2028. Recent developments indicate that Inter Milan’s owners, Oaktree Capital, are gaining an edge over AC Milan’s RedBird Capital in this high-stakes competition.

The Battle for NBA Europe

The NBA Europe project aims to transform European basketball into a global industry, featuring franchises, substantial media rights, and state-of-the-art arenas. March 31st serves as a crucial deadline for submitting non-binding offers for league licenses. Key players include Oaktree, RedBird, and Olimpia Milano, each with distinct motivations.

Why the Interest?

The NBA isn’t simply expanding; it’s proposing a fundamental shift in the European basketball landscape. The envisioned league will operate on a franchise model, requiring significant investment – estimated between €500 million and €1 billion – and a long-term commitment. This initiative too serves to generate new revenue streams for the NBA’s existing 30 franchises.

RedBird’s Strategy

For RedBird, the venture aligns with its core focus on the intersection of sports, media, and live experiences. The fund has been actively engaged in discussions with the NBA and has plans for a new arena in San Donato, which aligns with the NBA’s emphasis on modern venues.

Oaktree’s Financial Approach

Oaktree’s interest is driven by financial considerations. The involvement of financial advisors like JPMorgan and Raine, with existing ties to Oaktree, has strengthened its position. Inter president Giuseppe Marotta confirmed Oaktree’s interest, stating, I know that Oaktree is interested in this project, that the NBA wants to bring their indicate to Europe and that Milan is among the designated cities.

Olimpia Milano’s Role

The existing basketball club, Olimpia Milano, adds another layer to the competition. While discussions are ongoing regarding whether the operation will involve one or both of the football clubs, or Olimpia alone, the club’s existing fanbase and infrastructure are valuable assets. Olimpia Milano currently has a contract with the Euroleague until 2036, but potential exit clauses exist.

Key Considerations and Challenges

Several factors remain unresolved. The substantial entry cost of €500 million is a significant hurdle. Determining the return on investment (ROI) and securing favorable broadcasting deals are also critical. The project faces potential political challenges, including its integration with the existing European basketball system.

The infrastructural aspect is also crucial. While Olimpia Milano has a home arena, the San Donato project, potentially featuring an 18,000-seat sports arena, could be a strong contender. The Arena Santa Giulia is another possibility, though its approval for basketball remains uncertain.

FAQ

• What is NBA Europe? A proposed new professional basketball league in Europe backed by the NBA.
• When is the deadline for franchise offers? March 31st.
• Which teams are competing for a Milan franchise? Inter Milan (Oaktree Capital) and AC Milan (RedBird Capital).
• What is the estimated entry cost for a franchise? Between €500 million and €1 billion.

NBA Europe represents a transformative opportunity for European basketball. The competition between Oaktree and RedBird underscores the high stakes and the potential for reshaping the future of the sport on the continent.