Sydney Kings owner and chairman Paul Smith says he expects the city will again host a second NBL franchise, but he warns there are challenges to be met before that happens.

The Kings — who are defending NBL champions — currently have the NSW capital to themselves, although the city has been home to other league franchises, such as the West Sydney Razorbacks.

The NBL has attracted healthy crowds and encouraging TV audience figures this season, with the table-topping Kings having done their part to increase interest in the competition.

To take advantage of this renewed interest, the establishment of a second Sydney franchise has been spoken about in basketball circles, and it is a prospect Smith does not oppose.

But Smith said the introduction of another Sydney-based team would need to clear several hurdles before it was given the green light.

“It’s inevitable,” he told ABC Sport.

“But there are some challenges … we think they’ve got to grow a market — another geographic region of Sydney — and develop that.

“So I think there are some major infrastructure challenges in that regard.”

Smith said there were “definitely growth corridors” in Sydney for an expansion team.

He said a Sydney cross-town rivalry had the potential to be a boon for the NBL.

“Local derbies are fantastic. They sell tickets, they drive interest … it really drives that passion, and we need that, and basketball can deliver that,” Smith said.

“We’re simply being realistic about some of the infrastructure challenges that may exit around it.”

The Kings will begin the next stage of their championship defence when they play the Cairns Taipans in a best-of-three playoff series, which begins in Sydney on Wednesday night.

The winner will face either the New Zealand Breakers or Tasmanian JackJumpers in the championship series.