In 2010, Joe Lacob and Peter Guber shelled out USD $450 million to purchase the Golden State Warriors – a mediocre NBA franchise, seeking a change of fortunes through a talented but undersized rookie from Davidson College. Lacob and Guber’s purchase was the highest in NBA history at the time and was viewed as just that – mediocre.

Twelve years and four championships later, the same Warriors are now the NBA’s second most valuable franchise, worth USD $5.6 billion. That rookie is now the greatest shooter in NBA history. Whether you call it luck or genius, Lacob and Guber placed their bets on the right horse and the right race – Stephen Curry and the NBA.

Golden State’s ascension from a below-average, underdog team to the golden standard of NBA basketball, has been immensely unprecedented. This ascension is primarily accredited, and rightly so, to Curry’s remarkable transition from simply a talented shooter to one of the greatest players the NBA has ever seen.

After entering the league in 2009, the overarching narrative surrounding Curry was one of doubt and uncertainty. Despite a successful rookie season, Curry soon found himself plagued with multiple ankle injuries, adding big question marks surrounding his ceiling and longevity in the NBA.

To make matters worse, the Warriors’ ownership decided to trade away the team’s best player at the time, Monta Ellis. Ellis’ skillset and immense popularity directly locked horns with the franchise’s decision to draft and develop Curry – both of whom played the same position. Not only was this decision frowned upon by national media, but Warriors fans themselves went as far as booing owner Joe Lacob in the immediate aftermath – a moment now worth its weight in gold.

In hindsight, it was this very trade that gave Curry the freedom to make the team his own, and he never looked back. For Lacob and Guber, the decision to forgo an established player and invest in the then-precarious future of their budding star was a bold one. But as they say, the bigger the risk, the bigger the reward.

Since then, Curry and the Warriors have won four championships. In the process, Curry became the league’s first unanimously voted MVP, led the Warriors to the greatest regular season team record in NBA history, became the most prolific three-point shooter ever and most recently, received both the all-star game and NBA finals MVP awards.

To Lacob and Guber’s credit, Curry has consistently been surrounded by the right teammates, management, and coaching staff to maximise both his own and the team’s potential. Curry’s individual basketball resume is the stuff of legends, but standing above the accolades is his single-handed revolutionization of the way basketball is fundamentally played.

Curry entered the league with potential, but not even his closest friends could have envisioned the footprint he would leave on the game. Perhaps a great way to assess individual greatness is to recite history and take note of those names that cannot be omitted from the narrative. No conversation about the past decade of NBA basketball can be had without mentioning Stephen Curry. Ultimately, in a sport where winning is the primary currency, Lacob and Guber struck gold.

What helped Lacob and Guber’s investment turn from great to historical, however, is the simultaneous influx of money into the NBA alongside the growth of the Golden State juggernaut. In 2010, the average value of an NBA team was approximately USD $369 million. The same figure today is USD $2.58 billion. This growth has come primarily from extensive new sponsorship revenues, a historical media rights deal worth more than USD $26 billion, and greater sale and purchase activity for NBA teams in general since 2010.

Subsequently, the league’s revenue pool grew, leading to an elevation of the salary cap placed on teams. When Lacob and Guber purchased the team in 2010, Curry was on his rookie contract, worth a total of USD $12m. Today, Curry is the 5th highest paid athlete in the world, with a 4-year contract worth USD $215m. Fortunately, the sheer growth of money invested in the NBA was perfectly timed with Golden State’s ascension as a team. Thus, not only did the size of the pie grow, but so did Golden State’s share of the pie, so to speak

Of the team’s current USD $5.6 billion valuation, just under half has been attributed to branches that are independent of leaguewide operations – brand, market and stadium. The remaining is related to the value provided to the franchise from league-wide revenues. Importantly, the value of the former three branches has grown tenfold in the past decade, which is most heavily correlated with an increase in popularity. A visit to your nearest basketball court or sports store is all it will take to see the plethora of Stephen Curry jerseys – a testament to all of the aforementioned.

As much as we would love to, you and I, unfortunately, cannot wake up tomorrow and purchase a multi-million dollar sporting franchise in a bid to replicate Lacob and Guber’s success. However, in my eyes, their story, coupled with Stephen Curry’s meteoric rise contains lessons applicable to everyday investors.

When I think of the Warriors, I see a story of unwavering resilience, combined with unparalleled confidence. It is a story that teaches us to back our strengths, even if they differ from the status quo. When Curry was drafted, centering one’s strategy upon a physically smaller player reliable on perimeter shooting was considered a recipe for disaster. Today, the same has become a recipe for success, with teams desperately seeking to replicate Golden State’s formula.

Furthermore, nothing historical can be achieved without accepting a certain degree of risk and luck. Lacob and Guber took a huge gamble on Curry’s health, which ultimately paid off in an unprecedented way. The same could have easily gone south, in which case, the entire landscape of the NBA would be different.

The possibility of being wrong is a reality that all investors have to face. However, Lacob and Guber embraced their decision and the change it brought with it, independent of risk. They recognised that both in sports and in investing, there are multiple ways to win the same game. Things won’t go your way at every step, but sometimes all it takes is to be right once and to be right big. The result is for everyone to see

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