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NATIONAL BASKETBALL ASSOCIATION MEDIA CONFERENCEOctober 22, 2014Adam SilverTHE MODERATOR: We're going to start with some opening comments from the Commissioner about regard to the Board of Governors meeting today and then we'll take questions. ADAM SILVER: Thank you, Tim, and thank you all for being here. We just completed almost three full days of meetings, including committee meetings of the Board of Governors. I thought they were extremely productive. The owners were very engaged. We discussed a number of topics. Among them were revenue sharing, our new media deals, and extensive discussion about the draft lottery, and then discussed a new marketing campaign and other business. We had comprehensive presentations on domestic violence, diversity, and respect in the workplace, all critically important issues for the league and our teams. Lastly, the board unanimously elected Glen Taylor to one more year as our chairman of the board, and we also passed a special resolution honoring David Stern with a new scholarship, and in essence it's going to be the David J. Stern Sports Scholarship, and it's going to be administered in conjunction with the Thurgood Marshall College Fund. It's going to be a $30,000 scholarship named for David, and it will provide talented college students based on merit and need the opportunity to study sports management. In addition, these scholars will have the opportunity to intern at the league office in their junior year summer, and in addition, they'll have the opportunity for direct mentorship from David. We just spoke to him. He was honored, flattered, and he's looking forward to directly engaging with these young students. I'm happy to take any questions. Q. Can you kind of take us through the lottery reform vote and what were some of the concerns that the committee had and why anything didn't get adopted today? ADAM SILVER: As I believe has already been reported, the lottery proposal received 13 votes against it, 17 in favor, but because the change in our bylaws requires a three quarters vote of the owners, the proposal that was in front of the board was not approved. Ultimately the board unanimously agreed to send the issue back to the competition committee for additional study. I think in essence, the owners were concerned about unintended consequences. I think we all recognize that we need to find the right balance between creating the appropriate incentives on one hand for teams to of course win, and on the other hand allowing what is appropriate rebuilding and a draft to work as a should, in which the worst performing teams get the highest picks in the draft, and we've tinkered with the draft lottery several times over the years. I don't necessarily disagree with the way it works now. I'd say from a personal standpoint, what I'm most concerned about is the perception out there right now. Frankly the pressure on a lot of our teams, even from their very fans, to somehow underperform because it's in some people's view the most efficient and quickest way to get better, so I think that's a corrosive perception out there. Whether it's the case, I'm frankly not sure. I think sometimes perception becomes reality in this league. There seems to be a certain group think among general managers in terms of what the best ways are to build teams, and so it was a fascinating discussion and I think a very appropriate discussion for the board. I mean, the competition committee is comprised of coaches, general managers and owners, and of course the league is represented, as well. You know, we've been studying this issue for the last several months, but I think there was a further concern, too, that we're changing the rules mid‑course, that based on the current odds in the draft lottery, teams made certain selections in the draft, traded accordingly, and now we're already in essence mid‑season, because we're into the preseason already, rosters to a certain extent have been decided, and now we're changing the rules, and I think the sense from the board was the competition committee, one, needs to continue to make sure they understand potential unintended consequences, and also we have to come up with a timeline for implementing it where teams are appropriately on notice so that they draft and trade accordingly. Q.  I just want to get an update on the situation in Atlanta. Have any potential bidders come forward, and how long do you think that process will play out? ADAM SILVER: Several bidders have at least indicated interest, either directly to the team or to the league office, so there seems to be enormous interest in the marketplace for a new ownership group in Atlanta. Steve Koonin, the CEO of the Hawks, recently said he hoped that a new buyer was in place by the end of the calendar year. I think that's a little ambitious. I think they're just now in the process, the team is, of hiring investment bankers to lead the process, and it just takes time. But it seems that they are on a deliberate path at this point, and whether it's the end of this calendar year or the beginning of next year, I'm fairly confident that we will have a new ownership group in place in Atlanta. Q. Can you talk in a general sense about what the new media deals and the infusion of the money that's expected to come the league's way has meant in various facets? We've heard players weigh in about their expectations, and I'm wondering how it's affecting revenue sharing and how much it might be looked at maybe rightly or wrongly as a panacea to the NBA's concerns. ADAM SILVER: Well, let me begin by saying when we negotiated the last collective bargaining agreement together with our most recent revenue sharing plan, the goal in totality was to create a system where every team, if well managed, could compete for championships and be profitable. It's my belief that under the current system when the new television money comes in in 2016‑17, we'll have created a system that does just that. Our other argument to the players, back four years ago when we began negotiating that collective bargaining agreement, was that if we created a system that allowed every team to compete and potentially be profitable, we would also grow the pie, and these new TV deals are an indication to me that the system is working, and in fact, the marketplace is demonstrating that a more competitive league has more value to our media companies and to our fans. So what this new television money will mean, of course, is that teams will have a greater opportunity to be profitable because remember, this money doesn't come into our system until 2016 and '17. We still have roughly a third of our teams that are not profitable under the current system, despite revenue sharing. So again, it's our hope that with that additional money, if we can keep our other expenses under control, we'll have a better operating league and a league that over time is going to continue to grow. Q. Since competitive balance was such a big proponent of yours on your platform four years ago, how do you view the details? The devil is always in the details of how this new money is going to be implemented and phased in or whatever the term might be in order to make sure it's fair for all the teams and certain players don't benefit versus others, and also how does the lottery in your vision of a competitive league where everyone has a chance, how does that piece fit into that? ADAM SILVER: So first of all, on the television money, we have begun a discussion with the union where we would in essence‑‑ the expression we use is create a smoothing of the money in essence, rather than having in '16‑'17 such a dramatic increase in the cap in one year, we would smooth the increase in. The players would still receive what becomes 51 percent. Just as an aside, the deal we negotiated with the Players Association created a band for the players to receive between 49 and 51 percent of the revenue based on hitting certain revenue benchmarks. Based on the projections, the new television money, the players would then be up to 51 percent of the pie revenue as opposed to where they are now, it's 50 point something. With the players at 51 percent in '16‑'17, if that money all comes in at once and goes directly to the cap, to your question, it will create an unintended impact on that class of free agents in that they will disproportionately receive the lion's share of that money, and what we've begun discussing with the union is a plan in which, for a smoother operation of the cap, while the players would still receive every nickel of their 51 percent that year, we in essence would artificially lower the cap and then make a shortfall payment directly to the union, and then they would then distribute that money, presumably proportionately to the players. From a competitive balance standpoint, that is one of the reasons why we are, in effect, in favor of smoothing in the increase of this additional television money. I also think it would be an unintended consequence of the collective bargaining structure for so much money to come in at once and create an enormous amount of cap room for teams that are otherwise trying to plan over a course of years in terms of free agency, keeping their players, having the ability to sign free agents. It's all part of one complex system. And so, so much money coming in at once, to your question about the draft lottery, again, falls into the category of unintended consequences. Michelle Roberts and I have begun this conversation. We called her right before we announced the new television deals to give her a sense of the new dollars, and she's committed to studying the issue, and I should say that we presented the issue to our owners, as well, and they're studying it, too. I think they're looking at it in terms of the macro impact on the league, but of course every team is looking at it as it will affect their individual roster and their situation. Q. What's your vision for how the lottery should work? ADAM SILVER: To me, again, it's a tough one because I've been with the league long enough to see several different iterations of the draft lottery, and while the intent, of course, is to not defeat the very purpose of the draft, which is to provide the poorest performing teams with the highest draft pick. At the same time, we have to balance that against creating a system where there in essence is an incentive to compose a roster that is not optimally performing on the court, and again, the reason we've tinkered with it over the years is we're never quite comfortable that we've hit the right balance, and my greatest concern right now is frankly one of perception, and that is that I think there's an unfair pressure on some of our teams to actually underperform because there becomes this view in those markets that they're better off performing poorly in order to win over the long‑term. So again, it was a fascinating discussion in the room today, and ultimately where the board came out was that even though a majority of the teams supported the proposal that we had presented, it didn't pass by a three quarters vote, and there was a sense that we needed to go back to the competition committee and spend more time studying this. Q. You mentioned the domestic abuse presentation. Can you shed some light on that, what it entailed, and then where is the league at in terms of examining the policy, and is change still possible and being looked at on that front? ADAM SILVER: The domestic abuse presentation was led by our executive director Kathy Behrens, and the focus is on prevention. This is something that I've already had several conversations with Michelle Roberts and the union about. I mean, of course we can all ratchet up discipline, but the ultimate goal here is to educate our players, educate our teams so we can prevent additional incidents. You know, I've spent a lot of time looking at the numbers in terms of athletes against the general population. I've had several direct discussions with Roger Goodell about what the NFL is in the process of doing. Our offices have discussed the experts that they have hired. We've brought in our own experts, and so that's where the focus is right now. We've already implemented a few changes on the educational side. We're going to have an additional program in place for this season, an educational and training session for our players. I think it's also raising the sensitivity of team executives so they can spot issues. We're going to create a hotline for our players and for our teams. And as to where we ultimately end up in terms of a change in policy, it's premature. I think, again, we're studying it, we're focused on it, but we'll probably see additional changes over the coming weeks. Q. You mentioned the power of group think. Are you concerned about in terms of 2017 and the perception that continues to grow that it's inevitable that we're going to be in the same spot we were in a couple of years ago in terms of a possible work stoppage? At this point with so much time between now and then, what's your level of concern about controlling that narrative, and how do you handle it? ADAM SILVER: It's premature even for me to be concerned. We negotiated a 10‑year collective bargaining agreement. There's a six‑year out for either side. We're only going into year four. We have in my mind something that's incredibly positive, and that is two new great media deals. 51 percent of that money goes to the players. As to some of these smoothing issues, the system elements, we're still studying those. As I've said previously, we didn't get everything we wanted in the last collective bargaining cycle, either, and again, Michelle Roberts is new, and I think what she's committed to me is that she's going to thoroughly study all these issues. She's going to work with her own executive committee of players. Chris Paul and I have had discussions directly about it. So many great things are happening in this league right now. I should say that I think everyone in the Board of Governors' meetings the last three days has had enormous anticipation about the season. Putting money aside, I think the system elements are working in the new collective bargaining agreement. I can't remember a time when we had so many competitive teams in the league, so much hope in markets throughout the league. I just came back from a trip in Europe and China for preseason games. Our international business is booming, and so again, as I've said to the players, from day one, when I became commissioner, my focus is on growing the pie, and if we do our job growing the pie, the incremental differences in percentages will be rounding air compared to us both sharing in the success of the league. Q. You mentioned also that one of the conversations was about diversity and respect in the workplace. How much of that did center on Donald Sterling, Danny Ferry, those kinds of headlines that were created, and what are you trying to do to address those situations? ADAM SILVER: So we did not discuss Donald Sterling directly, but we had an evening of presentations on diversity and respect for the workplace, led by an interview of Ken Chenault, the CEO of our longtime partner American Express by John King from CNN, and it was frankly fascinating. I took a lot of notes. A lot of it was not just about diversity in the workplace but leadership, business values, and I think for our owners who most of whom run other businesses, this is something that they spend a lot of time talking about, as well. We at the league for years, David Stern put in place programs more than a decade ago in terms of sensitivity training, what we call respect in the workplace, and I think we were just heightening awareness of those issues. That was essentially the focus. And then we separately had a panel in which Wolf Blitzer moderated. Again, just a cross‑section of people talking about raising awareness at our teams, at the league office. It's a valuable exercise, I'd say, and it's not unique to sports, and it's important for every business. What I will say is that, again, what we have learned for those in the sports profession and for those of you who cover it, that whether it's racially insensitive remarks, whether it's child abuse or domestic violence, those issues become national conversations when they happen in situations involving professional athletes, and we feel we therefore have an obligation to be leaders in terms of our response. FastScripts Transcript by ASAP Sports |
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