The Knicks are back in the NBA Finals for the first time this century, and the team’s ownership group is cashing in on that success (in more ways than one).

According to Seaport Research Partners analyst David Joyce, who covers the publicly traded MSG Sports, the Knicks’ run to the 2026 NBA Finals is on track to generate at least $140 million in gross playoff revenue for Madison Square Garden.

Joyce estimates that the Knicks earned roughly $8 million per home game in the first round (vs. the Atlanta Hawks), $12 million per home game in the second round (the sweep of Philadelphia), and $17 million per home game in the Eastern Conference Finals (the sweep of Cleveland). And when it comes to the Finals, Joyce estimates the Knicks will generate at least $20 million per home game — a 5x increase over the ~$4 million the team generates from a regular-season game.

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Ferrari unveiled its first-ever fully electric vehicle this week, and it might be the most controversial new car launch of my lifetime. Controversial probably isn’t even the right word because everyone seems to hate it. The memes have been endless, and the company’s stock dropped 8% the morning after the car was announced, effectively wiping out nearly $4 billion in equity value overnight.

On the surface, I get it. The $650,000 Ferrari Luce looks like a Nissan Leaf, performs worse than a Tesla, and costs ten times as much as both. It is the heaviest car Ferrari has ever made, and the company’s former chairman says the best part about the car is that it is so bad the Chinese won’t even try to copy it.

But there is just one problem: these people are wrong. You may not personally like the car’s design, but I’m willing to bet it will sell incredibly well and become a significant source of profit for Ferrari in the future. So for today’s newsletter, I’ve spent a few days compiling a bunch of data points, charts, and context to explain exactly why Ferrari built this car and what it will mean for their business.

Let’s get into it…

1. Let’s start with the financials because if the numbers didn’t make sense, the Luce wouldn’t exist. Ferrari hasn’t released US pricing yet, but the EU price converts to about $650,000 and likely will exceed $700,000 when you factor in customizations. That’s 40% higher than Ferrari’s current average sales price of $500,000. Ferrari can charge its customers such a premium because its cars are viewed as collectibles. The best data point is that Ferrari has produced about 330,000 cars over the last 75 years, and more than 90% of those cars are still in existence today. People don’t get rid of their Ferraris; they collect them. So if we assume that Ferrari will sell about 1,000 of these cars this year, which will be easy to do given the sales backlog is already full and 1,000 cars represent just 5-8% of Ferrari’s annual production, that’s $700 million in revenue. At Ferrari’s 50% gross profit margin, which is 2-4x higher than GM, Toyota, and Porsche (and more comparable to luxury brands like LVMH and Hermès), selling 1,000 EVs annually would generate roughly $350 million in gross profit. Those margins make it a no-brainer. Not only does a luxury EV diversify Ferrari’s offering without diluting its popular internal combustion engine (ICE) vehicles, but the Luce’s high average sales price ($700,000) pulls up Ferrari’s overall average while adding hundreds of millions in incremental annual revenue at premium margins. Not to mention, personalization revenue already accounts for approximately 20% of Ferrari’s vehicle and spare parts revenue, and the Luce might be the company’s most personalized car ever, with glass keys, bespoke color options, custom interior materials, and more.

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When Indonesian billionaires Robert and Michael Hartono acquired Como 1907 for €800,000 in 2019, the Italian football club was playing in Serie D, Italy’s fourth division. Its stadium, located on picturesque Lake Como, was so beaten down that only 5,000 fans were allowed into the 12,000-seat venue. And from a commercial perspective, the club was generating less than €1 million in income per season — a fraction of the €400 million-plus that clubs like AC Milan generate each year.

Fast forward six years, and it’s a completely different story. Como is selling out every match, generating €35 million in annual merchandise sales alone, and has recently earned a spot in next season’s Champions League. As a result, the club is projected to generate about €75 million in annual revenue next season and is now worth hundreds of millions of euros more than its owners paid for it in 2019.

But how Como got here is even more interesting than where they ended up. The real story involves a failed TV strategy, a Disney-inspired business model, lakeside villas, and a billionaire family that never actually wanted to run a football club.

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A controversial new sporting event that allows athletes to take performance-enhancing drugs while competing will host its first event this weekend in Las Vegas. With more than $15 million in prize money on the line, several athletes are expected to break world records across swimming, sprinting, and weightlifting.

Founded by German billionaire biotech entrepreneur Christian Angermayer, the Enhanced Games are based on the idea that athletes should be allowed to use performance-enhancing drugs under medical supervision to maximize human performance and push the boundaries of what the human body can achieve.

Peter Thiel, Balaji Srinivasan, the Winklevoss twins, Saudi prince Khaled bin Alwaleed Al Saud, and Donald Trump Jr.’s 1789 Capital have all invested in the business. In addition to spending $625,000 per month on stipends for the event’s 40+ athletes, the Enhanced Games spent about $20 million building a 2,500-seat arena for its inaugural event this weekend. That includes $6.6 million to build a 50-meter temporary pool and another $2 million for a six-lane track around it.

What you’ll read online is that this is a dangerous event that is also guaranteed to lose money. Regulatory bodies like WADA, USADA, and the IOC have called it everything from a “clown show” to “dangerous” and “irresponsible.” And given that the organization is projected to lose tens of millions of dollars on this weekend’s event alone — the media rights and all 2,500 tickets were given out for free — many industry insiders and sports fans are already calling it a disaster.

But this is the wrong way to look at it. The Enhanced Games didn’t go public at a billion-dollar valuation before the first event because investors thought it would be the next Olympics. The Enhanced Games achieved that valuation because investors are betting it can be a DTC peptide/telehealth business that uses a steroid-friendly, Olympics-style event as its top-of-funnel marketing engine.

This is easily one of the most interesting stories in sports business this year, and something that all of your friends will be talking about once the weekend is over.

So for today’s newsletter, we’re going to dive deep into the business behind the Enhanced Games. We’ll start by discussing the details of this weekend’s event, including how much the athletes are being paid and what substances they are taking. But then I want to get into the good stuff, including how the Enhanced Group secured a billion-dollar valuation before hosting a single event, and why the organization doesn’t care about making money off tickets and media rights.

Let’s get into it.

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The recently announced Swatch x Audemars Piguet collaboration caused chaos this past weekend, with at least 20 Swatch stores, from Chicago and New York to Atlanta and Houston, forced to close due to larger-than-anticipated crowds.

For those who aren’t chronically online, hundreds of thousands of customers swarmed Swatch stores over the weekend to purchase the “Royal Pop” collection — a $400 pocket watch made in collaboration with luxury watchmaker Audemars Piguet. Swatch says the collaboration isn’t a limited release, but that hasn’t stopped resellers. More than 800 pocket watches have already been resold on StockX, with prices ranging from $1,500 to $3,000 (4-8x higher than retail).

For Swatch, the strategy is straightforward. The brand’s net profit collapsed by 88% last year, so it now wants to book a win by replicating the MoonSwatch partnership it did with Omega. By creating a cheaper version (plastic vs. steel) of Omega’s flagship Speedmaster watch, effectively reducing the price from $7,000 to $260, Swatch generated more than $1 billion in additional revenue in two years.

But what about Audemars Piguet? Why would a luxury watchmaker cheapen its brand by partnering with a company most famous for making plastic watches?

Well, there are several theories online. The simplest answer is that Audemars Piguet just wants to make more money. Given that its popular Royal Oak watch retails for more than $40,000, the Royal Pop collaboration can serve as an entry-level product without compromising Audemars Piguet’s core pricing model. And by outsourcing all production, marketing, and sales to Swatch, Audemars Piguet can generate hundreds of millions of dollars in additional revenue without increasing its production of high-end watches or changing its boutique model.

But wait, there’s more! The business strategy gurus on Twitter will tell you that this collaboration isn’t really about money at all. Instead, Audemars Piguet is working with Swatch on a cheaper version of its most famous watch because it recently lost trademark battles in the United States and Japan. So, rather than sit back and wait for cheap fakes to flood the market, Audemars Piguet can protect its brand by moving quickly to introduce an “authorized” affordable Royal Oak.

Admittedly, these theories sound pretty good, especially the second one. If your brand’s intellectual property and trademarks are no longer defensible in two of the world’s largest markets, rushing an entry-level product to market that also happens to make you hundreds of millions of dollars sounds like a 4D chess move.

But there’s just one problem: Neither of these theories is correct. Audemars Piguet isn’t partnering with Swatch because it wants to make more money or beat cheap fakes to market. The real reason is much more interesting (and strategic).

Let me explain…

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Located directly behind the 14th tee at Aronimink Golf Club, the homeowner built a temporary structure that rises just above the privacy fence. Rather than purchasing tickets for several hundred dol…

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GoPro’s stock shot up 25% after the close on Monday. The company didn’t announce an innovative new product, record revenue growth, or increased profit margins. In fact, it was the opposite. GoPro reported a 26% decline in quarterly sales and a net loss of $80.8 million, yet the stock still popped after management said it has received unsolicited inquiries about a potential sale or merger.

This is welcome news for anyone crazy enough to own GoPro equity. The same company that invented the action camera category from scratch, riding the YouTube and social media wave to an $11 billion valuation, now trades at a market capitalization of $195 million after a decade of mistakes and bad judgment.

The company has dealt with botched product launches, a failed media pivot, a disastrous drone recall, and better-funded Chinese rivals, but GoPro’s biggest problem over the last decade has been that its unique ownership structure has granted its founder nearly unlimited power to destroy shareholder value. And now that we have the benefit of hindsight, GoPro is a great business case study in the red flags to look for when investing in a founder-run, public-market business.

Let me explain…

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Last week, McLaren — the British Formula 1 constructor and luxury carmaker — officially launched its new in-house golf equipment business. With two sets of irons priced at $375 per club, or $2,625 for the 7-club set, McLaren is hoping to leverage its brand and engineering expertise to attract high-net-worth customers.

The thesis is simple: McLaren wants to diversify its revenue beyond Formula 1 and supercars. They already have world-class engineers working at their factory, and golf offers a high-margin, demographically aligned category for monetizing the McLaren brand with the same wealthy customers who can afford their cars.

The launch was timed to the Miami Grand Prix and the PGA Tour's Cadillac Championship, fronted by world No. 5 Justin Rose, Michelle Wie West, and Ian Poulter — all of whom are not just ambassadors but equity investors in the brand.

But once the hors d'oeuvres were eaten, and the champagne was drunk, reality set in. Fresh off a third-place finish at the Masters, Justin Rose put the McLaren irons in play for the first time and proceeded to have one of his worst rounds of the year, shooting a 74 while losing 4.83 strokes tee-to-green. Things got worse with a 75 on Friday, and Rose finished the tournament 21 strokes behind the winner, with only two players in the entire 72-player field posting a worse score.

The obvious response to this is, why would Justin Rose do this? He’s 45 years old, still at the top of his game, and looking to win major championships. Is the potential financial upside of being an equity investor really worth the risk? And if you’re McLaren, what makes you think you can succeed in a world dominated by companies like Titleist, Callaway, and TaylorMade? Even if you are successful, how much does a niche golf business really add to the company’s bottom line?

These are the questions that I have spent the last few days thinking about and researching. So for today’s newsletter, we’re going to do a full analysis of McLaren’s new golf equipment business. We’ll start by discussing why McLaren decided to enter the golf world and what the brand is actually offering. But then I want to get into the good stuff, including how much a successful golf business could impact McLaren’s financial results and the underreported strategic decisions that will allow McLaren to offload manufacturing and operational risk.

Let’s get into it…

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Golden Tempo won the 152nd Kentucky Derby on Saturday. A 23-1 long shot, the three-year-old thoroughbred entered the final turn in last place before outkicking everyone to win by a neck, making Cherie DeVaux the first female trainer to win the Derby (and just the second female trainer to win a historic triple crown race).

In addition to the Kentucky Derby’s prestigious 14-karat solid gold trophy, Golden Tempo left Churchill Downs with a $3.1 million first-place prize. Trainer Cherie DeVaux and jockey Jose Ortiz each get 10% of that prize ($310,000), with the horse’s ownership group — Phipps Stable and St. Elias Stable — splitting the remaining 80% ($2.48 million) based on their preexisting ownership agreement. And since Golden Tempo was bred by his owners and never sold at auction, a Kentucky Derby win guarantees at least a seven-figure profit for his owners.

But prize money is also only one part of the equation. Depending on how Golden Tempo performs over the next few months and how his offspring perform in the seasons after that, Saturday’s comeback win could be worth $25 million or more.

Here’s why…

Part I: The Business Model — How Stud Fees Actually Work

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If you’re like me, your social media feeds over the last few years have been filled with influencers competing in indoor fitness events. New York City. London. Shanghai. Competitions are held in the world’s busiest cities every weekend, with middle-aged men and women often spending thousands of dollars just to show up.

But these athletes aren’t working toward the CrossFit Games, running ultramarathons, completing Spartan races, or training for an Ironman. They are participating in a new global fitness category called “fitness racing.”

Born in a Hamburg gym in 2017, HYROX is the most disruptive participation-sport story of the last decade. The format is simple: participants run 1 km eight times, with a different functional workout (sled pushes, rowing, burpees, wall balls) after each run. It’s a standardized race, meaning it’s the exact same event wherever it’s held, and the average competitor usually completes it in 90 minutes.

This standardized format has turned HYROX into a juggernaut. While other fitness variations like CrossFit and F45 struggle to avoid bankruptcy, HYROX will host 135 events in 2026 across 43 countries. Roughly 1.5 million people will participate in a HYROX event this year, and the company is expected to generate about $225 million in revenue — all without spending a dollar on paid marketing.

But those are just the headline numbers. Anyone can multiply HYROX’s total participants by its race fees to get its annual race-fee revenue. The real story is how HYROX has built an asset-light, IP-based business that leverages user-generated content to attract millions of participants while maximizing revenue through affiliate gym memberships, sponsorship deals, merchandise, and more.

So for today’s newsletter, I spent the last few days digging deep into HYROX’s business model. We’ll start by discussing the critical design choices that enabled the organization to go from 650 participants in 2018 to 1.5 million in 2026. Then, we’ll get into the financial details, including a look at the unique revenue streams that enabled HYROX to become a billion-dollar business in less than seven years.

Let’s get into it…

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This weekend, more than half a million people are expected to attend the 2026 NFL Draft in Pittsburgh. Every single rental car at the airport has been booked, and the NFL, its corporate partners, and fans have reserved 11,500 hotel rooms.

In total, taxpayers have committed at least $18.9 million to the event across state, county, and city governments, with projected economic returns ranging from $120 million to $215 million. That’s a potential 6:1 to 11:1 return on investment — far better than the calculus on most publicly funded sports projects and something the NFL has used as a selling point in future host city negotiations.

The NFL’s pitch is simple: If a city is willing to put up tens of millions of dollars in taxpayer money, it will flood that city with hundreds of thousands of fans for the NFL Draft. Those fans will travel to and from the local airport, book hotels and short-term rentals, and buy food and drinks at local restaurants, generating economic activity that greatly benefits both the government and its citizens.

But there is just one problem: What if those numbers aren’t accurate? Or, even worse, what if the NFL is intentionally inflating them to create a bidding war?

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After spending more than $5 billion to recruit some of the world’s top golfers in an effort to create a competitor to the PGA Tour (and increase tourism in the Middle East), Saudi Arabia’s sovereign wealth fund has reached its limit.

Several outlets, including The New York Times, The Wall Street Journal, and Fox News, reported last week that LIV Golf is on its last leg. Saudi Arabia’s Public Investment Fund — the world’s largest sovereign wealth fund with $900 billion in assets under management — has reportedly told the league’s executive team that its financing commitment will expire this year, leaving hundreds of full-time employees in peril and 50+ professional golfers wondering what they will do next.

LIV Golf’s executive team has labeled these reports as “false” and “misleading,” often criticizing the use of anonymous sources without offering substantive responses. So to parse through the noise, I spoke to several people this weekend with direct knowledge of the situation. These individuals provided insight on everything from the league’s current funding situation to its annual revenue, expected losses, team valuations, and even what the future might look like.

Here’s what I have been told:

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Last month, Nepal’s Central Investigation Bureau (CIB) charged 32 people in connection with a $20 million insurance fraud operating on and around Mount Everest. The scheme targeted nearly 4,800 international climbers from 2022 to 2025 and involved guides, trekking companies, helicopter operators, and hospitals working in concert to falsify insurance claims by staging fake emergency rescues.

The scheme worked like this: Trekking companies identify foreign climbers with emergency rescue insurance → climbers experiencing mild symptoms — headaches, nausea, fatigue — are convinced or manipulated into believing they are in mortal danger → a helicopter is called for an “emergency” evacuation → an inflated or entirely fabricated insurance claim is filed with the foreign insurer.

Some climbers even believe they were intentionally poisoned by their guides (more on that later). But once the insurance company paid out the rescue claim, hospitals and helicopter rescue operators would send a kickback to the trekking company. Hospitals sent trekking companies 20-25% of the total insurance claim, while helicopter rescue operators typically paid out 60-70% of their net profit.

Given its scandalous nature, this is one of the few headlines to garner mainstream attention outside of the mountaineering world. Outlets like Fox, CNN, Yahoo, and the New York Post have covered it extensively, and posts surrounding the investigation have garnered hundreds of millions of impressions on social media.

But these people aren’t telling you the truth. The problems at Mount Everest go much deeper than just insurance fraud. The real story is about what happens when a remote Himalayan peak becomes a $50,000 bucket-list item, when a government addicted to permit revenue refuses to cap the crowd, and when the people doing the most dangerous work — the Sherpas — earn 1% of their worth.

So for today’s newsletter, we’ll cover everything you need to know about the challenges facing Mount Everest. We’ll start by digging into some of the finer details surrounding the mountain’s recent insurance fraud investigation. But then I want to get into the more controversial aspects, including how overcrowding has led to a massive increase in deaths, why Nepal’s government refuses to cap climbing permits, and what changes might actually make a real difference.

Let’s get into it…

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The U.S. Department of Justice launched an investigation last week into whether the NFL has engaged in anticompetitive tactics to harm consumers. Specifically, the DOJ is looking into whether spreading games across multiple subscription-only platforms raises costs and limits access for fans, potentially violating a 65-year-old special antitrust exemption that helped power the NFL’s historic growth.

“To watch every NFL game during this past season, football fans spent almost $1,000 on cable and streaming subscriptions,” Senator Mike Lee (R-UT) said last month, claiming the current situation has led to “confusion and increasing costs.”

The announcement of this investigation was buried last week by the Masters, but it will likely be the most important sports business storyline this year. If the DOJ forces the NFL to limit the number of games it offers on subscription services, the league could see a double-digit drop in annual revenue (and potentially much more if it results in a loss of leverage over broadcast partners in negotiations).

But that’s the type of coverage you can get anywhere. The more interesting detail surrounding this investigation is that it appears to be coming from within. The NFL is currently trying to renegotiate its collection of media rights deals several years early, and many NFL insiders believe this investigation is a politically motivated attack orchestrated by one of the league’s current broadcast partners.

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I began assembling this list years ago, but I could never have imagined what it would become. This is our most popular newsletter every year, and this year’s list has dozens of new items. In fact, I actually spent a few days at Augusta National this week, talking to employees and touring exclusive buildings on the property.

What you’ll find below is a bullet point style breakdown covering everything you could imagine about golf’s most iconic venue. I apologize for writing nearly 5,000 words, but I wanted to cover everything, including details surrounding Augusta National’s unique media rights deal, a deep dive into the club’s $500 million real estate portfolio, specific revenue numbers for merchandise sales and home rentals, and even insight into the club’s membership process and initiation fee.

If that isn’t enough, we also discuss private jet economics for the Masters, $10,000 hospitality tickets, and Augusta National’s network of secret underground tunnels.

This newsletter is for paid subscribers only (because it takes me weeks to put together, and that’s what they pay me for). But if you’ve been thinking about upgrading, today is the day. This is the most comprehensive breakdown of Augusta National anywhere on the internet — and no matter how big a golf fan you are, I guarantee you’ll find multiple details you’ve never even considered.

RFID Tracking Chips: Augusta National provides each media member with a badge upon arrival. These badges provide exclusive access to the tournament and media center each day, but they also contain an RFID tracking chip. This allows club officials to see exactly where everyone is located on the property at all times.

Media Rights: The Masters has the most unique media rights deal in sports. ESPN and CBS don’t pay any money to broadcast the tournament. Instead, they simply invoice Augusta after the tournament to cover production costs. Augusta then forwards this invoice to their sponsors (AT&T, IBM, Mercedes-Benz, and Bank of America), who pay approximately $5 million each in exchange for four minutes of commercial time per hour. Augusta likely sacrifices more than $100 million each year by doing it this way, but it allows them to control everything — from what broadcasters are allowed to say on television to what shots they show.

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During the NFL’s annual league meeting this week at the Biltmore Hotel in Phoenix, Arizona, all 32 of the league’s owners unanimously voted to approve a small rule change that could have a significant impact on the 2026 season.

This rule change had nothing to do with banning the tush push, enforcing defensive targeting penalties, or adding an 18th regular-season game. It simply provided insurance for the NFL should teams have to deal with poor officiating.

The NFL and its officiating union, the NFL Referees Association (NFLRA), are currently locked in one of the most contentious labor standoffs in recent league history. With their collective bargaining agreement set to expire at the end of May, the NFL has already begun hiring replacement referees. So, to avoid a situation like the “Fail Mary” in 2012, NFL owners voted to allow the NFL’s officiating department, which reviews each play live from a studio in New York, to correct clear and obvious mistakes made by on-field officials during each game.

Owners are hoping this rule never actually gets implemented. If the league office is able to reach a deal with its referee union before the 2026 season begins, it won’t. But it’s also not that simple. What started as a dispute over salary increases has grown into a broader philosophical clash over accountability, job structure, time off, postseason hierarchy, and what it means to be an NFL official in 2026.

So for today’s newsletter, I’m going to run through everything you need to know about the NFL’s current CBA negotiation with its referees. We’ll start by digging into the league’s unique employment structure and its history of deals and disruptions. But then I want to explore some of the key issues impacting this year’s negotiation, including salary increases, marketing fees, performance-based compensation, postseason assignments, offseason training, and dead periods.

Let’s get into it…

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Wrexham is one of the most interesting case studies in the history of sports business. The same 160-year-old football club that Hollywood actors Ryan Reynolds and Rob McElhenney acquired for only $2 million in 2021 is now generating more than $40 million in annual revenue and recently received a minority investment from Apollo Sports Capital at a $450-500 million valuation.

So for today’s newsletter, I spent the last few days digging into Wrexham’s annual financial statements. Unlike in the U.S., where professional sports teams are incredibly secretive about their finances, all UK limited companies — private or public — are legally required to prepare, report, and file annual financial accounts.

This level of transparency provides an unprecedented behind-the-scenes look at one of football’s most innovative projects. We’ll start by covering Wrexham’s revenue growth, sponsorship income, and stadium renovation project, but then I want to dig into some of Wrexham’s more unique data points, including how much money the club makes off its “Welcome to Wrexham” documentary, why its finances aren’t reliant on promotion, and how Reynolds and McElhenney are able to make millions from the club each year without selling a single share of equity.

Let’s get into it…

1. Wrexham generated £33.35 million ($43.9 million at current exchange rates) in revenue last year, a record for a third-tier club not in receipt of parachute payments (think: the money relegated clubs receive to offset revenue loss). In total, Wrexham has seen its annual revenue climb from $1.9 million in 2021 → $7.8 million in 2022 → $13.8 million in 2023 → $35.1 million in 2024 → $43.9 million in 2025. That’s a 23x increase in revenue from when Ryan Reynolds and Rob McElhenney initially purchased the club from its supporters trust.

2. Despite posting record revenues last season (and a historic third consecutive promotion), Wrexham finished 2025 with a $19.5 million loss. The club has now lost more than $33 million over the last four full seasons under its new ownership group…but we’ll dive deeper into those numbers in a second.

3. Wrexham’s geographical diversification is unprecedented. Last year, 2% of the club’s revenue came from Europe, 40% came from the United Kingdom, and 58% came from the rest of the world (primarily North America). This figure — North America as a % of income — is up from 52% in 2024 and 25% in 2023. In other words, Wrexham might be selling more tickets, merchandise, and concessions, but the club’s growth is coming from U.S. sponsorship deals.

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On Wednesday, March 25th, the NBA’s Board of Governors voted unanimously — all 30 owners in favor — to formally explore adding expansion franchises in Seattle and Las Vegas. This will be the league’s first expansion since the Charlotte Bobcats joined the NBA in 2004, a 22-year gap that will likely culminate in the most financially consequential expansion in North American sports history.

Franchise bids are expected to come in at $7-10 billion per team, with many NBA insiders privately indicating that the floor is closer to $8 billion. At $16 billion in total expansion fees, each of the NBA’s 30 owners would receive a one-time, up-front payment of $533.3 million. More importantly, expansion fees are excluded from revenue sharing, meaning owners get to keep all of this money to themselves.

To be clear, this week’s vote does not guarantee that the NBA will add two new expansion teams. It simply begins the process of determining whether the league should add two new expansion teams. Potential investor groups will now submit detailed proposals, including financial disclosures, arena plans, and org charts, with the NBA planning to put its finalists up for a formal vote by the end of 2026.

But let’s not kid ourselves: With so much money at stake, an uncertain future for media rights post-2035, and some unique tax incentives that make it a financial no-brainer for owners, NBA expansion has always been a matter of when, not if.

So for today’s newsletter, we’re going to dive into the details. We’ll start by talking about what NBA Commissioner Adam Silver had to accomplish before exploring expansion. But then I want to get into the good stuff, including how the league’s 30 owners did the math on expansion fees vs. revenue-sharing dilution, potential frontrunners for ownership groups in Seattle and Las Vegas, and why those markets are uniquely positioned over others to see immediate financial success.

Let’s get into it…

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The legal loophole that prediction markets have been exploiting might soon be closing, potentially leading to billions of dollars in lost equity value for investors.

On Monday, U.S. senators Adam Schiff (D., California) and John Curtis (R., Utah) introduced a bipartisan bill to prohibit entities regulated by the Commodity Futures Trading Commission (CFTC), including prediction markets like Kalshi and Polymarket’s U.S. platform, from listing contracts related to sporting events.

The bill also seeks to prohibit “casino-style games” from being listed on these platforms — slot machine games, video poker, blackjack, and bingo — but given that Kalshi crossed $3 billion in weekly volume for the first time last week, with 86% of that volume coming from sports betting, this could destroy their business.

This legislation seeks to crystallize a fundamental question that has been brewing since prediction markets exploded in popularity after the 2024 presidential election: Is placing a bet on the Super Bowl a financial derivative requiring federal oversight, or just a sports bet that should be regulated at the state level?

The answer to that question has enormous financial consequences. Kalshi alone is now valued at $22 billion, and with prediction markets able to operate in states that haven’t legalized sports gambling, state-licensed sportsbooks like FanDuel and DraftKings have seen their stocks decline by more than 50% over the last year.

What Does The CFTC Actually Do?

Before we get into whether or not prediction markets should fall under CFTC jurisdiction, it’s important to understand what the CFTC was created to do.

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