New NBA (National Basketball Association) Commissioner Adam Silver spoke exclusively to Matt Cutler about succeeding David Stern, his approach to leadership and international opportunities for the league.
If anyone thinks being the number two of an organisation for a long period of time inhibits and stifles the ability to make shrewd, decisive and potentially trailblazing decisions – take a look at the Los Angeles newspapers from the end of April.
Donald Sterling – the man who built a fortune in real estate and law and owns the Los Angeles Clippers NBA franchise – was caught on tape making racist comments by a celebrity news website. Probably not the kind of dilemma Adam Silver thought he would be faced with only a few months into his tenure as NBA commissioner, having succeeded David Stern in February this year.
The public outrage over Sterling’s comments escalated quickly. Current and former players from across the league aired their disdain; Sacramento mayor, former player and special adviser to the NBPA (National Basketball Players Association) Kevin Johnson demanded to meet Silver; and within three days, sponsors began pulling out of deals with the Clippers. Rumours also spread that players were prepared to boycott the league unless meaningful action was taken. The situation needed to be nipped in the bud before huge damage was caused.
Silver’s swift choice of punishment was certainly meaningful: a $2.5 million fine, a lifetime ban from Clippers games, practices and facilities and a promise that Sterling would be forced to sell the franchise, subject to agreement from the other team owners.
Commissioner Silver showed great leadership in banning LA Clippers owner Donald Sterling for life.
The authoritative leadership and heavy-duty reprimand has seen Silver receive praise from all quarters of the basketball community and wider sports industry. And if anyone had doubted Silver’s ability to fill the incredibly large shoes of David Stern – NBA commissioner of 30 years – they were proven comprehensively wrong.
Would Stern have taken the same action against Sterling had he still been in charge? That, we will never know, but there’s no doubt that Silver channelled the leadership approach of the man he was hired by in 1992, and took confidence in his decision having built strong relationships with all team owners during his 22 years at the organisation.
“I am enormously pleased that the transition [between Stern and himself] has gone so smoothly,” Silver told SportBusiness International just a few weeks before the Sterling comments surfaced. “That’s as much testament to David Stern’s leadership, that the owners had confidence in David and the senior management team of the NBA to ultimately approve the transition he set out.
“My personal style is one of inclusiveness; I believe in delegation and giving strong authority to the people I work with. At the same time, I believe in taking advantage of the resources that are made available to this league by virtue of this incredible collection of owners.
“What I also learned from David is the other side of attention to detail, and that is execution. It’s great to have a terrific vision for the sport, but ultimately we are going to be measured by how we execute it.”
One reason for the severity of Silver’s punishment of Sterling comes down to the commissioner’s fundamental belief that the ethnic diversity of players, and ownership, in the NBA is one of its biggest strengths, and something that reflects the cultural composition of the United States, where 29 of the 30 franchises are based.
“[Fans] love the diversity of the athletes – not just ethnically and racially, but the geographic diversity of our stars,” he says. “The fact we have a league where 25 per cent of our players were born outside the US – I think they appreciate the egalitarian aspect of it.
“We have [Brooklyn Nets owner] Mikhail Prokhorov who lives in Moscow, our newest owner Vivek Ranadive from Mumbai [who bought the Sacramento Kings in May 2013], the owner of the Miami Heat, Micky Arison, was born in Israel…our owners are very representative of the people of the US. They are a multi-cultural group themselves.”
A trained lawyer, Silver joined the NBA as a special assistant to David Stern, having first written to the former commissioner for advice on how to make the transition out of law; Silver says he wanted to “learn about business from one of the greatest business leaders of the day”.
Over a two-decade period at the NBA he has held a series of roles, including eight years as deputy commissioner and COO from 2006. Since becoming commissioner, Silver says he has had a reapprehension of exactly how much basketball and the NBA means to fans across north America.
“I was a little bit removed from the game in my prior job. I ran the business of the NBA,” he adds. “As I have spent more time on the game of basketball in my new position, I have fresh understanding of what a wonderful game this is and how many people directly connect with it.
“So many people, wherever I go, have fond memories of their first game, playing basketball with a sibling or parent, playing basketball in school as a young boy or girl…people have an incredible love for the game of basketball.
“That has given me a fresh perspective of how to market this sport…and a realisation of how much people want to talk about the values that they associate with this game, such as teamwork, leadership and fitness; those values and qualities of the game are so important to our fans.”
Not everyone in the US follows the NBA, however, and with the National Football League, Major League Baseball, National Hockey League and now Major League Soccer between them all offering high-quality professional sport all-year-round. It’s certainly crowded and competitive when it comes to nurturing the next generation of fans, and Silver says one of his priorities is to actively tap into large groups of basketball fans who don’t, and should, follow the NBA.
“One area of opportunity I see is taking those people who love the game of basketball, and for whatever reason don’t follow the NBA game, and bringing them into the fold,” he adds.
“For example, in the US, there are segments of college basketball fans that don’t follow the NBA. For me, that’s a lost opportunity for the league. Those basketball enthusiasts should also want to see the very best basketball played at the very highest level of the NBA.
“I’m in the process of reaching out directly to those fans…[and] one of the ways is by focusing our marketing efforts more on the game itself, beginning at the youth level. I take the view that for the NBA to be strong, you need strong youth basketball in the US, and you need strong collegian basketball.
“One of the initiatives that I have raised, and it’s not a new issue for the NBA, is increasing the minimum age for entry to the NBA from 19 to 20, so that players come into our league more mature and with more advanced skills.”
Another opportunity to expand the NBA’s following is outside the US, continuing an initiative that could well end up being David Stern’s legacy for the league. NBA teams annually tour the world in the pre-season while regular season games have been held abroad since 1990, with Mexico and London the most recent hosts of competitive games. The regular season match-ups run through the core of a wider project to increase the sport’s following across the world.
Silver says the number of fans across the globe, the quality of playing talent and, importantly, revenues from a global footprint are all experiencing huge growth.
“The US is a very multi-cultural country and [an international footprint] helps us to connect with pockets of fans who ethnically connect with countries outside the US,” he adds. “Secondly, for us to present the best basketball in the world, we need to draw from the biggest possible talent pool possible; there are a global pool of players who grow up from Mumbai to Johannesburg and New York City with dreams of playing in the NBA. We want to tap into that.
“Thirdly, we’re driven by our fans. We are meeting demand from fans in markets outside the US who want to see our games on TV, fans who want to consume our product through various digital devices, and represent their fandom by wearing merchandise that the players wear on the court. They also want to see and touch NBA players directly – and that’s something we do through pre-season games and occasionally regular season games overseas.”
Many do not realise how much success the NBA has already had in its internationalisation project, which started in earnest following the 1992 Olympic Games in Barcelona after the US ‘Dream Team’ victory shone the world spotlight on the stars of the NBA.
The league now has 1,100 employees in 14 offices across the world, and its London-headquartered EMEA (Europe, Middle East and Africa) office has 47 broadcast partners covering the NBA in 118 countries across the region. According to industry sources, Europe alone generates annual revenues well in excess of $100 million a year.
“Europe is vital to our efforts to grow the game globally,” says Silver. “In the UK in particular, we have found London sets tastes for much of Europe. The UK has not historically been as strong a basketball market as some of the southern European territories, but we’ve made tremendous inroads.
“The basketball venue at the 2012 London Olympics was an enormous success, and we’ve had great receptivity to the regular season games we have played at the O2 Arena [in London]. We plan to continue playing regular season games and pre-season games in Europe, and we are playing a regular season game again at the O2 next year.
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“We are seeing steady growth and our top-line revenue is growing roughly at 20 per cent per year at the moment in Europe. It’s a long march, but we believe that while we know soccer is first and foremost the most popular sport in the world, there’s plenty of opportunity for basketball as the number two sport.”
The revenue growth is being driven across the business, with sponsorship, broadcast rights and direct-to-consumer digital products such as the NBA League Pass all on the up. Merchandising, too, must not be overlooked; the NBA’s Global Merchandising Group – responsible for apparel and official video games, amongst other things – is believed to generate revenues of around $3 billion per year, of which NBA International is responsible for roughly 35 per cent.
Outside Europe, China has long been a hugely important market for the NBA, and thanks to local stars such as Yao Ming, the Shanghai-born former Houston Rockets player, and a strategic brand-building operation that has taken place over the past 30 years, the league has a huge presence in a market most other major sports organisations are only just looking to crack now.
China remains just as important as ever, says Silver, but there are also other Asian markets on the horizon: “India is somewhere we’re just beginning to scratch the surface. We have a relationship with the Reliance Foundation out there where we are jointly conducting clinics for boys and girls and introducing them to the game. We have had terrific receptivity to those programmes.
“I was in Johannesburg in August for our Basketball Without Borders programme and we have a new pan-regional TV deal in Africa with [pay-TV broadcaster] SuperSport – we think there is a terrific opportunity there as mobile consumption is growing rapidly; it gives us the opportunity to reach more of our fans in Africa directly.
“There’s also Mexico, and I attended a pre-season game in Rio with the Chicago Bulls and Washington Wizards [in October 2013]. Brazil is another strong market for the NBA. We’ve got our eyes on opportunities all over the world.”
Adam Silver is continuing David Stern’s vision for the NBA to be a premium global product that challenges the likes of the English Premier League for eyeballs and commercial revenues. But does he see a time in the near future where interest in the league outside the US gets big enough to justify creating a franchise, or even a division, on the other side of the Atlantic?
The answer is yes, but he is not willing to put a timeline on when that could happen.
“I don’t want to promise on something I can’t deliver, but it’s part of the vision of this league to, over time, have a unique opportunity to grow outside the US,” he says. “I think the best opportunity is in Europe because of logistics, arena infrastructure and the maturity of the sports industry there.
“If we were to do it, we would have to do it with both feet on the ground, and we would need a division rather than a single franchise. But it’s not something I am focused on right now; I’m focused on the well-being of the existing 30 north American franchises. But it is an opportunity we continue to look at.
“I’m not ready to put a flag on the ground somewhere, and I’m going to rely on our strong management team in Europe to direct us. I’m looking to them to tell me when they think the market can support that serious consideration.”