Why the Golden State Warriors Are Moving to San Francisco

The Golden State Warriors are out of the NBA playoffs, and fans now have something else to think about: a name change. According to ESPN, the Oakland, Calif.-based team is "seeking input" on a new name once it moves to San Francisco in 2017 or 2018. What will the Warriors look like in the future?

Hopping across the bay
Announced in 2012, the franchise's decision to leave Oakland for San Francisco is important for two reasons. 

Illustration of potential new Warriors stadium, San Francisco. Image via The Golden State Warriors.

First, a move allows the team to build a new arena. With plans currently in their third iteration, Warriors Co-Executive Chairman Peter Guber says, "it will be easily accessible, state of the art, digitally fit, and second to none." The tentative location is Mission Bay, about two miles south of downtown San Francisco. And unlike many stadium projects, the Warriors say theirs won't cost taxpayers a dime. According to the team, "the arena will be privately financed on private land."

Last month, The San Francisco Examiner reported the Warriors bought a plot of land in Mission Bay from (NYSE: CRM  ) . Although the terms of the deal are undisclosed, the outlet says the site is worth at least $180 million. This, plus the arena's estimated cost of $500 million, according to the San Francisco Chronicle, could mean the project's total price tag is near $700 million. That would rival the Orlando Magic's Amway Center ($480 million) and the Brooklyn Nets' Barclays Center ($1 billion) among the most expensive NBA venues.
The coming move also gives the Warriors access to a more affluent fan base. While Oakland's median household income is nearly 10% below the state average, San Francisco's is one of the highest in California (over $72,000). The city already supports top-flight NFL (the 49ers) and MLB (the Giants) franchises, so it's not a stretch to think San Franciscans will show up for Warriors games in droves. The Giants, for example, led baseball in 2013 by selling over 99% of all available home tickets, five percentage points ahead of the next highest finisher.

The business side of things
All of this is great news for an NBA franchise Forbes ranked ninth in total value last year. The outlet estimates the Warriors are worth $750 million, which includes an $80 million brand valuation. The latter figure is still millions below similarly sized teams like the Miami Heat and Dallas Mavericks, both of which sport brand values near $100 million.

While the Warriors' current crop of sponsors include big names like Anheuser Busch InBev (NYSE: BUD  ) , Oracle (NYSE: ORCL  ) , and Visa (NYSE: V  ) , the team's marketability should improve in San Francisco, and in a best-case scenario, an extra $10 million to $20 million in sponsorship income is conceivable. That's enough money to sign a Carmelo Anthony-esque superstar in free agency, something the Warriors aren't exactly known for.

The bottom line
For Golden State, talk of a potential name change is just part of the relocation puzzle. Whether they're known as the San Francisco Warriors, the California Warriors, or the Bay Area Warriors, the move is a long-term positive. In just a few short years, the team will likely boast one of the NBA's most valuable arenas in one of its most prosperous cities. And assuming it keeps making playoff runs, San Franciscans should welcome the Warriors with open arms.

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Jake Mann

Jake Mann covers sports, economics and politics for the Motley Fool.

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