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NBA ownership used to be a gamble -- now it's a billionaire's best bet

Stephen Dunn/Getty Images

This story appears in ESPN The Magazine's October 12 Owners Issue. Subscribe today!

WHENEVER OWNERS AND players go to war, romantics suggest that athletes should not just fight for better pay but walk away altogether to start their own league. After all, we pay to see their talent. Before the NBA locks out players, it should pit Jerry Reinsdorf vs. Jim Dolan in a game of H-O-R-S-E and see how that draws.

But secession never takes off. Athletes make too much in careers that are too short to risk the time needed to revolutionize the market. For better or worse, they're salaried employees. Owners run the show. And so it's owners who shape the long arc of a team's history, sustaining the persona of the Raiders or Spurs across eras -- or molding a new identity for the Cubs or Clippers by breaking with the past.

Major sports teams garner owners monopoly rights, barrels of TV cash and public subsidies; really, every owner should push the limits of how much money can be made (legally) in this great country. But there is huge variation in how owners find GMs, invest in talent, sell tickets, show loyalty to locals. The best owners treat a franchise as a public trust, the worst as a plantation. And because of these disparities, some leagues are better positioned to leverage their appeal in coming decades.

NFL teams are worth nearly twice as much as NBA teams -- an average of $1.97 billion versus $1.11 billion, say the latest data from Forbes. And football franchises averaged $76 million in profit last year, more than triple the average operating income in hoops ($23 million). But if you were to buy into a league today based on growth potential, the NBA is the game to join.

The NFL has grown so popular over the past 50 years that many teams are like 19th-century trusts, giant fortunes unto themselves built by industrialists. Twelve NFL owners inherited their teams; five made their money developing land, four others from oil and gas. The roster includes guys who got rich making bumpers (the Jaguars' Shahid Khan), owning car dealerships (the Saints' Tom Benson) and running truck stops (the Browns' Jimmy Haslam) -- not to mention a Ford (Martha of the Lions). The owners' backgrounds read like an issue of Fortune from the Eisenhower administration.

In aggregate, these billionaires do a superb job of milking TV revenue. And by sharing the trove equally, the NFL makes it easy for owners to keep getting richer. But it gives little incentive for the worst owners to heed fans and find new ways of reaching the masses -- or sell to let someone else do a better job. The Redskins keep yanking seats out of FedEx Field because DC fans don't want or can't afford tickets, but Dan Snyder isn't going anywhere: His team is worth nearly $3 billion, third most in the NFL.

For a long time, the NBA was a risky bet. With teams reliant on local support, the worst lost buckets of money, and as recently as five years ago, half a dozen franchises were in serious trouble. Then two things happened. The prospect of a labor war drew a wave of investors who recognized that owners would increase their share of revenues by locking out players and who saw distressed teams as chances to buy low. A whopping 13 teams have changed hands since 2010, bringing 10 owners into the NBA from the fields of finance or technology. Second, Adam Silver became commissioner, looking to drastically expand into global markets and onto social media.

The energy in NBA suites has shifted toward maximizing opportunity, not just coasting on TV money. From DC to OKC to LA, new, savvy owners have revived franchises by adopting a business model used in San Antonio for two decades: Focus intensely on customer service at home and popularize the team worldwide. The NBA is now the top league on social media, with 750 million followers or likes and 26.9 billion page views in 2014 -- more than half from outside North America. The result: NBA teams bought since 2010 have increased in value by an annual average of 20.3 percent, versus 17.8 percent for NFL teams.

MBA types use the term "glocal" to describe companies that are global in scope but adapt local products for their customers, like regional variations on Big Macs. But big league games are the opposite of glocal: They're local productions consumed as is by as many fans as they connect with. Today's NBA owners understand that better than anyone.