National Basketball Association commissioner Adam Silver enters the league’s 2019-20 season with a relatively high amount of stability. The current labor deal with the NBA Players Association runs to 2024 with a mutual opt-out the year before. Silver’s own contract with the league, extended last year, also has five years remaining. And major US-based media deals with ESPN and Turner extend through the 2024-25 season.
With those key parameters all locked in place, Silver is seeking to push the league into several bold new directions. This coming season will bring a new 12-team pro basketball league in Africa through a collaboration between the NBA and Fiba, the global governing body of basketball. The pre-season will feature the NBA’s first-ever games in India, with a pair of games to be played in early October in Mumbai. The NBA’s esports effort, the NBA 2K League, finished its second season in August. The league this season will also finish a highly successful three-year pilot program of its jersey patch program that already has generated more than $150m (€137m) in revenue and has many other American sports properties wondering what they can do in this area. And the league continues to be an industry trailblazer on a wide variety of social media and technological areas.
Silver, with the league since 1992 and its commissioner since 2014, spoke at length with SportBusiness‘ US editor Eric Fisher on a variety of league issues relating to both on- and off-court matters.
What are you expecting to see across the league this season, and what do you consider your key priorities for the year?
I begin with the competition. As I’ve traveled around over the summer, I don’t remember a time when so many fans of the game told me they had the sense the league was wide open this year. In the last several years, there have been clear favorites but I get the sense from people that there is a much larger group of teams they think will be ultra-competitive and have a good shot at winning the title. So first and foremost, I’ve always been focused on the game, and regardless of the technology, regardless of the way the games are distributed – what fans care about is the quality of the competition. And we’re always looking for ways, working with our Players Association, to make the game more competitive and my sense is that we’ve made real progress.
Part of that focus on the competition involved the heightened anti-tampering rules (illegal approaches to in-contract players) that were just approved at your last Board of Governors meeting. How effective do you think those new measures will be?
I don’t want to oversell it, but I do believe we’re going to see a sea of change in terms of the culture of compliance. I think teams want to compete on a level playing field. They just want to know the rules are being applied evenly and enforced across the board. And that message didn’t just come from the league office, but from all the partners to each other when we were at the board meeting. So I think we will see a real change there. I think teams want to comply with the rules. But I think teams had been put in a position the last several years where they couldn’t confidently say to their basketball operations departments that you would not be at a disadvantage if you did everything to the letter of the law. We’ve gone back, we’ve reviewed our existing rules, and we in essence got everybody together, and said the integrity of this league is first and foremost. Fans really do care, and it becomes a slippery slope if you let some things go around the edges that we shouldn’t have as a league office. So we want everyone to understand these are the rules of the road going forward, and I do think it will make a difference.
What has it been like from your perspective to see the NBA become a true 12-months-per-year operation, and what has it meant for managing the business?
It’s a measure of this league’s popularity that it has become a 12-month business. I certainly didn’t predict [the off-season] would generate as much attention as it has. What we did anticipate was that, going back to the 2011 collective bargaining agreement, that when we moved to shorter contracts, the math was clear we would have players become free agents more often. And we felt that additional player movement would better align pay to performance in a cap system. We also felt it would allow teams to rebuild faster than they might have been able to historically. So we have seen the benefits of that new collective bargaining agreement, and that’s been supercharged by all the changes we’ve seen in digital and social media. Those changes in media have been a leavening force on markets in the US, meaning that a player in a traditional small market can now generate global attention whereas in the old days even a player in a big market might not have been able to. When we have a social media community estimated at more than 1.5 billion people in market size, the incremental difference in local market size of a million or two is not significant. That has enabled more players to generate more attention over the summer as well. Maybe in the old days, it was more about what was happening in the big markets, but now what is happening in every market is very relevant to fans of the game. I also think we’ve simply an increase in interest in the game of basketball. It’s grown on a global basis. And if you look at our players, it’s not just that 25 per cent of our players were born outside of the United States, it’s that many of our top players were born outside of the United States. Our most valuable player last year, our rookie of the year, our defensive player of the year, and our most improved player were all international players. And that has help create that much more interest in the off-season globally. It’s become a virtuous circle. These things all feed off each other. There are more media outlets covering the league. They’re doing a more thorough job covering us, they’re looking for more content. Our summer league has become a bigger deal. And it all works together to keep attention on this league seemingly all the time.
You mentioned media disruption. But you also have between your teams deals with regional sports networks, and your national telecast deals give much exposure to the traditional broadcast structure. How are you managing the change to a more digitally-focused media landscape?
We manage through these changes by trying at least to stay on top of all the new technologies and platforms. Having spent a big part of my career at NBA Entertainment, running NBA Entertainment for a long time, I would have never predicted the impact that smartphones and the Internet would have on our business. And I wouldn’t pretend to be able to predict what the next new technology or innovative platform will do to the next generation of fans. But we see it as our job to always be experimenting, working with new platforms, being open to using our league as a laboratory in certain ways, pushing at each other to try new things, to look for new ways to cover our games, and do to that in alignment with our media partners. It’s a little old-fashioned, but at the end of the day, it’s hard work. The culture of this league, whether it’s our best players, our team executives, or my colleagues at the league office, we’ve always had a bit of a chip on our shoulders and a view that we could outwork a lot of other people. So if we stay on top of things and take advantage of opportunities as they come our way, we’re going to do just fine because we have such attractive content.
What is your sense then of what local TV ratings will do this coming season? You were down slightly last year, with some under-performing teams in some big markets partially responsible.
My sense is that our local TV ratings will be up. I think last year was a bit of an aberration. We had some player movement that impacted ratings to a certain extent, some injuries mid-season that had an impact as well. But because we again have the perception that so many teams will be competitive going into the season, I think that will have a direct impact on local ratings. Ratings, of course, are critically important in an absolute sense. But on a relative basis, we’re doing even better than we’ve done historically versus other forms of entertainment programming. We’re more than holding our own. And as our local telecasters, together with our national broadcasters, look for new ways to find engagement of fans, different types of gamification, new camera angles and approaches to coverage, that will help our ratings. So I’m very bullish on this season.
You have a big project in hand with NBA Africa, and a lot of people are watching that effort. What does success look like there, particularly at the outset? I have to imagine it’s not about profit-and-loss at the outset.
To your point about P&L, this is clearly an investment in the future and will be for a number of years. There’s no expectation of profitability in the short-term. This is very much a long-term vision of what the NBA can become. In Africa, short-term success would mean that we launch the new NBA Africa league in March of 2020, as we are planning. It would mean that we are up and running with 12 clubs in the initial configuration of the league. And that we’ll be able to distribute those games and we begin to learn a lot about what it means to be doing business in Africa directly on the ground, as opposed to distributing games produced in North America. This is a real shift for us, moving from a programmer distributing games in Africa to somebody doing significant business directly on the ground across the continent.
What is your progress thus far in India and what is the charge for your new managing director there, Rajesh Sethi?
I’m going to be heading over to Mumbai [for the NBA’s first pre-season games there ever]. Couldn’t be more excited. This is a true milestone in the history of the league. This is the first time ever we’ll be playing two pre-season games there. We’re unique situated with [Sacramento Kings owner] Vivek Ranadive, a team owner born in Mumbai, returning home for these games. We’ve had real success over the past decade building grassroots programs on the ground there with our partner, the Reliance Foundation. Once again, this is an investment in our future in India. We’re working on both grassroots programs, to get more young boys and girls playing basketball, and then with elite talent in an academy to hopefully over time generate talent that can compete in the NBA and WNBA. We’re fortunate we have a group of team owners willing to invest for the long term. We have in some ways the luxury of not being publicly traded where there’s too much short-term pressure on financials, but an opportunity to invest for the future.
On the facility side, you’ve had some recent openings in Milwaukee and Sacramento that really pushed your paradigm forward. Now the Chase Center is open in San Francisco. What will that do to advance the notion of what an NBA arena can be?
I’ll be there on our Opening Night of the season. I’m thrilled. It’s been amazing to watch our teams, and with every new building that comes online, they seem to raise the bar. Hats off to [Warriors owners] Joe Lacob and Peter Guber for their vision and willingness to make an enormous private investment. My sense is this will be the new gold standard in the NBA. But the one thing I’ll say about all the new buildings is that you can try to rank them but they’re all built uniquely for their markets. What works in San Francisco may be very different than the kind of facility you would build in Milwaukee. I just marvel at the new buildings and in the case of the NBA, while the competition is first and foremost, the environment for that competition is a critical part of our fan experience.
Many of these new buildings also now have a dedicated notion of being a new version of a civic town square.
I think that’s right. They truly are these modern-day town halls. There are seemingly fewer and fewer things in life that bring us all together, and sports is certainly one of them. And in these communities where people spend less time at movie theaters, less time in houses of worship, and so on, and more time looking at screens and are more isolated, these arenas bring people together. Whether it’s for a sporting event or a concert or a political convention, they become the centers of these communities. Milwaukee is a great example of that.
We’re coming to the end of the initial pilot period for the jersey corporate patch program. What do you expect to happen in a new term?
I think we’re going to see more of the same. We’ve been very happy with the pilot program. One place where it did really exceed my expectations is the breadth of corporations that became involved with the league. Many brands that have not traditionally spent in sports or been involved in the sports business saw this as an opportunity to present their brands on a global basis. Many companies that had been US-centric saw that through the NBA they could connect with fans around the world, and saw that as an opportunity to build on their brands. So I think we’re going to continue to see more of that. And what we’re seeing at the team level is that companies rarely come in as merely a buyer of the patch. They want to have truly integrated deals with the teams.
It’s perhaps different in other sports, but it also seemed for basketball there was very little fan pushback about corporate logos on uniforms, at least after the first few months of the program.
So much so that one of the issues that has come up is that because the official Nike uniforms [sold at retail] don’t include the patch, our fans want the authentic jersey that includes the patch. And now at the arenas, teams can elect to sell the jerseys with the patch on them. But it’s not part of the Nike retail program. It’s something we’re going to continue to look at. And in European soccer, of course, there’s only one uniform that’s sold, and it’s the one with the corporate relationship included. One other thing that I think may have surprised people is that the patches are small, two and half inches by two and a half inches. But they play big through media because often the shots that telecasters are using are those so-called hero shots, chest to head. And the patches are very visible.
How would you evaluate the progress of the NBA 2K League to date?
We’re off to a great start. We’ve gone from 17 teams to 21 teams. We are in serious discussions right now with our first partner outside of the 30 NBA teams to look for some international expansion opportunities. We knew when we launched the NBA 2K League that because in essence it’s a virtual world, we would be able to do things that are not logistically possible for the traditional NBA world. Our teams are continuing to learn from operating and so are we, and I’m sure we’ll be making adjustments along the way. But everyone remains very enthusiastic. This is another area where we’re proud to be innovators and first-movers in this space. Still very early days but we’re full-steam ahead.
More broadly, simulation sports titles have found much more resistance in esports thus far than other game genres such as first-person shooters.
I accept that. To me, it would not be consistent with the NBA brand to be in a first-person shooter game. Our goal here is to be fully-integrated with the larger NBA, and that includes not just being a stand-alone business but is something that engages more people in the game of basketball. We’ve always operated on the premise that especially for young gamers who are involved in NBA 2K, invariably it will cause them to be more interested in the NBA and its players.
There continues to be a lot of discussion around officiating and the accuracy of calls, and there is an inherent tension given the technological ability review calls in essentially real time. How do see that tension playing out for you this year?
You’re right. It is a tension. And it’s that tension of on one hand getting the calls right and on the other maintaining the flow of the game and the overall amount of time your competition takes. We’re constantly looking to strike the right balance. We’ve added a coach’s challenge this year. But we were very careful to announce it as a one-year pilot. While our coaches obviously want us to get the calls right, some of those same coaches are saying this could slow down the game. For us, it’s about continuing to be mindful of striking the right balance of game flow versus getting the calls right. There are things we’ve done from a technological standpoint to speed up replay. And this year, we are also adding a new courtside administrator. So there will be a person who is dedicated to working as a conduit between the officials and the replay center in Secaucus. We’ve also experimented with earpieces and other technology for officials on the floor to communicate with the replay center. But in our tests in the G League, those earpieces have interfered with the ability for the officials to be fully attentive to the game action on the floor. And there are still other areas that don’t lend themselves as easily to technology, such as blocks and charges.
In recent years, the NBA has been rather progressive in encouraging players to be politically and socially outspoken if they so choose. With a divisive presidential election coming next year in the US, to what extent will this continue and what will be your role?
My role will continue to be encouraging the players to fully express themselves as human beings. It doesn’t go to just political speech. It’s demonstrating they’re truly multi-dimensional people, that they’re not just ballplayers. At the same time, it’s also telling players not to feel pressure to speak out politically if that’s something they’re not comfortable doing, if someone is pushing to take a point of view. We’ve had a great relationship with our Players Association on these issues, recognizing the players have multiple outlets in which they can express their political points of view and at the same time, once the game starts, let’s all focus fully on the game. Ultimately, even fans that may disagree with a particular position a player has taken respect their rights within this great system we have in the United States to be able to speak out on important issues. And I think people respect the way our players go about doing it.
You were obviously a first mover on gambling, striking the first league-level sponsorship in the space in the US, and the NBA has since set up a model of official gambling data partnerships. What does next phase of legalized gambling in the US look like for you?
The state-by-state model is obviously not ideal for a national league like us, because it means there’s something of a hodge-podge of regulations we have to adhere to. So I still favor national legislation. But I’m realistic. It doesn’t seem to be on the top of anybody’s list right now in Congress. So we will continue to work with the various states on legalized betting, and I still believe this framework is better than before where it was largely prohibited on a national basis. I believe a lot of the illegal conduct before is now converting to legal betting. That’s positive for the integrity of the league. It enables us to monitor betting action and aberrational behavior by anyone involved. Putting aside any business opportunities from sports betting, I do believe this increases the engagement by our fans, increases the time they spend watching our game. And it increases the passion in which they approach our competition. First and foremost, we’re focused on the integrity of competition, always have been, and that won’t change. We now have new tools and as sports betting continues to become more transparent, I think this will continue to be a growth area for the league.