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NBA 2K LEAGUE MEDIA CONFERENCE

December 15, 2017

Brendan Donohue

New York, New York

KELLY BARNES: I want to thank you for joining the call today. As you know there are a lot of exciting announcements in the last few weeks with the NBA 2K league, including the qualifying in January, as well as the league logo reveal follow by all 17 teams announcing their names and logos throughout this week.

So I'm pleased to welcome the league's managing director, Brendan Donohue, to take questions on both announcements.

We're going to focus on those two today. But if you have questions with more specific detail or in broader form, please follow up with me after the fact, and we can set up some additional time.

BRENDAN DONOHUE: Brendan here. Appreciate you taking the time to talk and looking forward to chatting with all of you.

Q. I'm glad to be on the call and get an opportunity to kind of get some more information about the league. I know we're talking primarily about the logo reveal and the reveal of the 17 teams logo. But there are some questions that I had in regards to like avatars and player salaries and that sort of thing. Is that something you can speak to today?
BRENDAN DONOHUE: Yeah, I'll try to do my best, within reason, sure.

Q. Okay. It's a two-part question, basically. Do we know yet whether or not the players are going to be literally scanned into the game, similar to the way that the actual NBA players are scanned into the NBA 2K game? Are we looking at photo realistic versions of the avatars for the players?
BRENDAN DONOHUE: So, that's one we're still working on with 2K on. So it's possible, but we have not decided on that.

Q. The second part is do we have any concrete information yet about the players' salaries, like a range? Will the contract terms vary depending on the player, maybe their draft spot and so on and so forth?
BRENDAN DONOHUE: So we do know it's going to be a competitive salary plus benefits. The teams are going to offer them housing in one of the 17 markets. The one thing certainly we can add from the last time you and I talked about this was we know there is going to be an opportunity for them to earn additional compensation during the season in our tournaments or during the playoffs.

Q. Two quick ones for you. First of all, has there been a cut off established for when players need to turn 18 years old to qualify for the league?
BRENDAN DONOHUE: No, that's a great question, and no, that hasn't been determined yet.

Q. The qualifying round is obviously the players are going to be in for the 50 wins. That's going to be to get them in the conversation to move on. Has there been any discussion how many players you guys might cap the pool at to move on to the second round?
BRENDAN DONOHUE: No, we're not looking to cap it. All they have to do in January is win 50 games and fill out -- win 50 games in Pro-Am and fill out the online application. So there is no desire for us to have a cutoff.

Q. Brendan, I saw yesterday some details about the qualifying process for players, how they have to meet certain standards online and then go through more qualifying and then there's a draft. But I'm wondering, is there any provision for teams to try and have one local player on their squad, something like that?
BRENDAN DONOHUE: There is not, no.

Q. The actual site will take place in one city the whole season, will it?
BRENDAN DONOHUE: Right now we're looking to identify a studio or two to host all of our games. We'll fly the players from the 17 teams in on a weekly basis.

Q. You mentioned earlier that the players would be living in a house. I'm curious if any YouTubers are selected, will they be allowed to make content while living in these houses and function as they usually do?
BRENDAN DONOHUE: So, really -- I'm sorry, I didn't hear the last part of your question. Go ahead.

Q. I was saying in terms of brand deals and stuff like that that they get from their MCMs or even their management teams?
BRENDAN DONOHUE: We would fully expect that streaming is a part of the community culture, so we'd fully expect players to stream throughout the season. But in terms of how they're streaming, really, that's between them and their team that they're playing for. So, there is certainly -- we're going to have player guidelines, but some of that is going to be left up to the teams.

Q. Okay, so there is a possibility that they'll be able to stream, say, on their own, maybe not associated with the team, but just as they usually do on Twitch or YouTube or something?
BRENDAN DONOHUE: Yeah, we're still finalizing details around player guidelines and that will be one of the things included in there.

Q. It's a little ways out, but has any thought been put toward draft order? I know everyone's starting from a fresh plate. Obviously, like EA worst to first format. Is there any thought put into how these 17 teams are going to be put in the draft spot, I guess?
BRENDAN DONOHUE: Yeah, we're thinking about that constantly. So I think what I would say is it's going to happen logically how you think it with should happen. We're likely going to have to have some sort of lottery prior to the draft to determine that order.

Q. In terms of the qualifying stage players will need to win games in the Pro-Am mode, is there any restriction or any kind of just parameters around the players that you can -- the sort of avatar you can use to get there? There's been a lot of controversy this year about the amount of transactions and the 2K18, and how you can use them to boost up your player. Are there going to be any kind of restrictions around whether people use that kind of thing in building up their my player?
BRENDAN DONOHUE: Yes, that's a good question. There's actually not for the qualifying portion, simply because all you have to go is go into Pro-Am and win 50 games with your my career player. So we're actually not really judging talent in the January stage. So that's the reason why we're not putting any restrictions on those types of things or parameters around that.

In February, however, that portion of the tryout for those who make it through, that will be a completely balanced playing environment.

Q. I'm wondering, you're probably in negotiations that you can't yet divulge with national and local sponsors, and as you have now ruled out these team names and logos, what kind of feedback you've gotten from those potential partners on as far as in a general sense and whether or not that sparked their interest any further?
BRENDAN DONOHUE: Yeah, honestly, what I would say is we already had a lot of interest, and our conversations have been progressing great. I think this week their interest just may be a little more because of the fact they're starting to see the league kind of come to life a little bit more. So I think it's only enhancing our conversations. We've had a couple more this week and they're going extremely well and all heading in the right direction. We were having great conversations before this week, and now it's only getting better.

Q. I think my question has been asked in regards to the draft order and stuff like that, that there will be a lottery. Do you have any indications of how many separate players may try to qualify for these, I guess, rare spots?
BRENDAN DONOHUE: No, I mean, we have data that would suggest the amount that could potentially -- or the data would suggest would tryout. However, I mean, given the fact that we're putting out there that you have to win 50 games in order to try out, I would imagine that number would likely spike. But the data would suggest that 10, 15,000 players are going to make it through to February. But that number could go higher just based on interest and excitement.

Q. I have a question about the balanced level playing field. Will there be a change in archetypes or badges being involved, and how important they will be to the game play in terms of the E-league?
BRENDAN DONOHUE: Yeah, and just to be clear, I don't want anyone to think we're hiding the ball here. Truly, 2K is working on this right now to make it the perfect environment for the tryout in February, as well as during the season. So we have not gotten to that stage yet.

But 2K's development team, which as you know from following the game, are some of the best in the world. They are working on making this a great experience for the player community. So they have not come to any kind of final decision on that.

Q. With the G-League streaming on their broadcast, the first broadcast is tonight, is that kind of an indication of where the 2K league is going?
BRENDAN DONOHUE: No, not at all. We're having great conversations on the media rights front, but the G-League is a totally separate operation. We're excited about that partnership, but, no, it's totally separate and really has no bearing on what we're doing.

Q. You mentioned earlier that you guys are going to be flying the players to the various studios that you're going to be playing out of. Will those studios have the capability of having a studio audience, so if people want to come and watch the games in person?
BRENDAN DONOHUE: I can tell you that we are now looking at studios all over. The majority of them have room for some sort of studio audience. Roughly from I'd say a hundred to 500 in terms of studio audience. It's really not a huge factor in our decision of which one to choose, but it is nice to have.

Q. I've got a question about the commercial inventory available for teams and also the league to sell. Could you identify what assets are being offered and what's being sold, and what assets the league is retaining?
BRENDAN DONOHUE: Sure, any specific questions? Anything in particular you're curious about, because I don't want to go through an entire menu of inventory.

Q. Sure, obviously, jersey patches, on-court signage. I'm just wondering what are the main assets being sold here? And also just a question, how you guys are valuing this kind of product given that it's never really been done before and also the media distribution side of things isn't yet kind of announced or confirmed yet?
BRENDAN DONOHUE: Sure. So we benefit from the fact that we're used to selling sponsorship assets in basketball games already. So a lot of the inventory is pretty well defined from what you see watching any NBA game.

Teams will have the ability to create grass roots events or local content they definitely have their quote/unquote, home games, that they'll own inventory for, and it's inventory you'd expect, courtside signage and things of that nature. So the teams will have that. And certainly the league will have assets you wouldn't normally think of as -- whether it's tournaments or the platform we're playing on, all those type of things are certainly sponsor opportunities.

Q. I just want to clarify the tryouts or the way it works in moving on. Is it the case that basically if you meet the baseline of winning 50 games by January 31st, you move on to the second round and then there is something that you -- some kind of additional round or is there some set of players to be chosen from the large group that does meet the baseline there?
BRENDAN DONOHUE: No, so, yeah. That's a smart question. I will tell you that January is really the qualifying stage. It's to qualify for the actual tryout in February. So we're really looking to do in January is to have people commit and commit to winning 50 games and putting in the time and effort to do so, to really indicate that they're very serious about this and they're interested in trying out in February. So that's really essentially kind of the main pillar around the January qualifier.

Q. Forgive my ignorance with this question, but I know there are other eSports titles that have quite a few established leagues and things like that. Can you give me a sense of how mature the NBA 2K gaming community is? I presume, given the people involved in this, all the best players are going to want to be part of it. Do you feel you're going to get all of those people, and how good are these, given the history of professional gaming and this title?
BRENDAN DONOHUE: Sure. So what I would say is that you're right. In other titles, there are several leagues that are launching, and games that are wildly successful and they're fantastic games. In fact, several of our owners are actually involved on an ownership level with those games. You see, for example, League Legends recently awarded ten teams, seven of them are actually owned by NBA owners. So just to suggest our NBA owners broader view on eSports and how bullish they are about it.

In terms of the 2K game and league specifically, what I would say is while the idea of this league is new, the notion of us doing competitive gaming through the 2K game is not new.

For example, last year we did host a tournament, The Road to All-Star, where it started out with 500,000 competitors and 100,000 teams, and ended up concluding at All-Star New Orleans. We streamed that and had two million views for that. I may have mentioned previously, this isn't blind optimism. We have pretty good indication that there is an appetite for this.

Q. Will the players from the January qualifier be flown in for the February trial? Will that be done online or will it be done via Lan?
BRENDAN DONOHUE: No, it will be digital. It will be digital in nature.

Q. I was wondering if you could talk about this week. Obviously you've been revealing the logos and sort of for all the teams in the league, obviously, it's early. It's Friday. You've been doing this the past week or so. But if you've had a sense of the initial reaction from maybe the firsthand basis of the related basketball teams as well as the kind of fans of NBA 2K?
BRENDAN DONOHUE: Yeah, it's going great. Quite honestly, it's been fantastic. We came out with the league logo and identity on Monday. It was very well received. You know, as you saw over the last three days, roughly five to six teams per day came out with their local logos, and identities, and they've been very well received. If you follow just the community on Twitter, there is a lot of excitement about the league itself.

There is very positive feedback about the look and feel of the identities and logos. Just to kind of give a little background into just kind of why we came up with our logo, just first off, we wanted to -- at its core, it's about the NBA and 2K. So you'll notice the NBA colors, you'll see 2K's font. The other thing is you'll see the basketball, which really is, you know, what our players and the community share more than anything else, and our fans, is the love of basketball. So that's at the core.

Then we also noticed is the absence of a silhouette that you might see across most sports, and that's really to indicate just the fact that there is no prototypical NBA 2K player. Man, woman, young, old, domestic, international, it's really inclusive of everyone, so that's really kind of the genesis of the league's logo. Then what you also may notice is I would say the connective tissue of all 17 of the logos and the league logo, and that really kind of came about because we chose to work with an agency in rare that worked with all the teams in the league. It helped us get that consistency we were hoping for, and they were fantastic to work for. They had had a history of being a great partner for many of our NBA teams, whether the Hornets, with their transition from the Bobcats to Hornets, the Grizzlies, and several other teams.

Q. So the February trial you said is going to be done online. But will the league play be online or will that be Lan?
BRENDAN DONOHUE: Yeah, so league play will be, like I said, in a studio or two and that would be on Lan, yes.

KELLY BARNES: Thank you, everyone. Brendan, do you have any closing remarks?

BRENDAN DONOHUE: First off, I'm excited the number of people to actually people to join the call. We're excited about the league. From January to February to the season starting in May, we're thrilled with the excitement in the community about this, and that's really what's most important to us is we build this.

It's going to be community centric, and we're going to listen to the feedback from the community as we build this. If anybody has any questions, by all means, reach out to Kelly and we're happy to go into more details. We look forward to having several of these calls in the upcoming months.

FastScripts Transcript by ASAP Sports

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