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NATIONAL BASKETBALL ASSOCIATION MEDIA CONFERENCEOctober 23, 2008David SternCOMMISSIONER DAVID STERN: Thank you for being with us today. It's a convenient day. We just came out of a meeting two days with our Board of Governors, and we gave them a report on the game and the business of the game and the scope of the game, and on balance, I would say it was a very upbeat report. We talked about the season last year and the basketball that was played and what came out of it, and the exciting Conference races, the difference in the up-number of plays that were playing up-tempo, the excitement that our fans shared for the game. I reminded them of the ratings that we had, regular season playoffs, and The Finals. We gave them a briefing and a recap on the Olympics, which was an exciting time for all of us. It wasn't just about Team USA, but the fact that there were 26 of the 36 players on the medal stand; bronze, silver and gold were players with NBA experience. And I hasten to say the same was true with the women's competition, WNBA players were about 26 out of 36. So the Olympic experience was exciting for the NBA, but most important, uplifted basketball on a global basis. We did review with the owners the agreement with FIBA under which we authorize our players to play in international competition, and there was general agreement that the agreement continues to be a good thing for the NBA and for basketball. There may be some discussions with FIBA about how we might improve it, but we like it and we are planning to live with it, and it's now in it's 21st year. We gave them a report on the scope of our other activities, including the four exhibition games in Europe and the two exhibition games in China that reaffirmed the state of the game on a global basis. We played to sell-out crowds everywhere. Clay Bennett gave a report on the extraordinary results that are being achieved in Oklahoma City. I'm looking forward to being at opening night there on Wednesday, after I get the opportunity to give the Celtics their rings on Tuesday. Ron Johnson, the senior vice president of refereeing operations, introduced himself, and was part of an extensive presentation by Joel Litvin and John on our refereeing, on our refereeing program, on our observer program, our statistics, our recruitment. And we thought that in light of the fact that we were going to be spending more time telling people about our program on officiating, we thought the owners might be a good place to start or possibly finish, and did that. We are very excited about the upcoming season. We have extraordinary players of all ages, and from all over the world, and since all of our teams are currently undefeated in regular-season play, it was an amazingly ebullient time at the NBA owners' meetings. So we are pretty excited about that. We did spend a fair amount of time sharing ideas and talking about the state of the economy, looking for ways to keep our game relevant. Remembering that this is a game that's being played for 100-plus years, it's a familiar place for people to go. It's two and a half hours of fun. It's available on television. And we sort of confirmed that we will have, on average, on average, probably about a thousand tickets per team for $10 or less for every game. And we were sharing ideas on ways that teams in their individual markets might actually do more with respect to adding value to that opportunity to demonstrate to our fans that we do want to keep our game as close to them as possible; in addition to the fact that they will now be receiving more of it on-line, on TV, on satellite and digital table and the like. From a business perspective, we are going to be about flat in attendance, which is good news we think. Up a bit in gate receipt revenue we are projecting which is probably good news, and our sponsor renewals and presentations are very strong. We recently announced a marketing partnership with Hewlett Packard. We signed four significant renewals with T-Mobile, Anheuser-Busch, AutoTrader.com and SIRIUS XM Radio and our good partner, Kia Motors is the Presenting Partner of the NBA Tip-Off, which is promoting the start of the season in every U.S. team market and is hosting a large celebration in Union Square in New York on Tuesday. Our partners tell us they want to be involved with the NBA not only domestically, but on a global scale. All in all, we are looking forward to a good season and I'm happy to take any questions that you have. Q. You broached the subject of your presence in Europe and Asia and elsewhere, and when you're talking economy, it stinks over there, too, and I was just wondering in that regard, how does the economy impact on what you're going to and planning to do over there, and why or why not will it impact? COMMISSIONER DAVID STERN: Well, the economy will impact everyone, every place. But our share of the market there is so small, and our growth opportunity is so large, that the fact that we may grow at 20 percent rather than 30 percent, that may be something that happens. But in terms of our product in terms of how we are being received and in terms of the six sellouts as recently as two weeks ago, we don't think that that's going to impact us in any harsh or painful way; other than slow, perhaps, our rate of growth, but growth it will be. Q. I'm calling from the staph infection capital of the free world -- it's not funny, actually, but the NBA has had very few incidents of staph infection, and I'm wondering, has the league or your athletic trainers, doctors, is there anything that the NBA is doing to make sure that you do not have any of these staph infection outbursts? COMMISSIONER DAVID STERN: We have an infectionist disease control doctor that advises us. I have actually read more about this than I ever thought I had read. There are procedures that are recommended to our 30 teams. There's actually some difference of opinion about wiping down surfaces, as opposed to wiping down surfaces, and there's really some heated debate. But post the Mercer scare, we sent protocols to all of our teams and we check back periodically to make sure it's working. And I don't want to take, to say that what we do keeps the staph infections -- I don't want to say that that makes us better. We are just on top of it and maybe we have been lucky. But we are spending more time on it than we thought we would to make sure that our teams are formed from the center, and they all have very competent doctors at local hospitals that have it. It is true that there are sometimes that there are slightly different opinions on how best to deal with it, and after setting forth certain minimum protocols we allow teams to augment them or move in whatever direction they think is necessary. Q. There was a Forbes report last year that stated 20 of the 30 NBA teams were making money. Being that you met with the owners today, what is your updated read on how many teams are profitable, and in connection with that, what is your read on the likelihood that the owners would be inclined to let the CBA lapse, as opposed to extending it in 2011, which may potentially lead to the possibility of a work stoppage? COMMISSIONER DAVID STERN: Well, I think that the number -- I don't have the books in front of me, but I'll venture maybe half of our teams are profitable. I'm not sure of the exact number. But with respect to what my teams are going to do in three years to incite or not incite labor address, you have to give me a pass. Because you know, we talk about the system, we know that when you are going into collective bargaining, you are looking for ways to improve it, to make our game more competitive and to make our teams more competitive, to keep our game growing. But I think it's premature for me to speculate now, other than to say our owners are going to be very focused, and it's our goal, actually, to appoint a labor relations committee this season, and begin discussions with the players for a successor agreement much sooner than the expiration of the next three years. Q. Did you get any sense from the owners today that there's grave concern on their part with the uncertainty of where the economy is going and how it will affect their books? COMMISSIONER DAVID STERN: I think that if you are alive in this world and you have access to that ancient form of communication, newspaper, you can't help reading -- which I do and I have -- you can't help but reading the headlines of what's going on. Company after company are announcing large layoffs. People are talking about everything from sub-prime mortgages to credit card debt to student loans to falling oil prices to government intervention. So if you're having a business discussion, you just have to understand what's going on in the world around you, and we did that. That said, the owners were remarking upon the strength of the sports business and the value that it provides and the retention of that value that is represented by sound management and becoming part and remaining part of the community, which is something that our teams and our players do very well. Q. I spent some time in Greece last week with Josh Childress. COMMISSIONER DAVID STERN: How is he? Q. He says hi. COMMISSIONER DAVID STERN: Okay. Good. Q. He's kind of a big deal in Greece, which is different for him. But I met with the owners of the team, the Angelopoulos brothers, and you know, they are quite adamant that Josh Childress is just the beginning; he's a small piece of the pie for them, and that their plan is to continually take, as they put it, better, higher-salaried players from the NBA, and they plan to do that soon and they plan to do that continuously. And I'm just wondering, what impact you think that might have on your league, on the teams' decision -- COMMISSIONER DAVID STERN: Did you go to a game there? Q. We did. We went to a game where there were less than a thousand people that could fit into the gym. COMMISSIONER DAVID STERN: Okay. Then you've answered my second question. You know, I mean, I guess if they want to induce NBA players at salaries that exceed the budget of the team to play in games that a thousand to 5,000 people will go to, they are free to do that, and there will be one or two players that will benefit greatly from it, and it's good if you're a player to know that that option exists. But it's not something that we are seeing at the moment other than something that's good for the players, mostly players at the mid-tier or slightly below, who have the opportunity to apply their trade on a global scale, and we think that's good for the game. The fact that a billionaire who wants to open up an office to have NBA stars play under those circumstances, you have to ask yourself, well, whether that's something our players will want to do. It's not something that we spent a lot of time on. Q. If Childress reports back home to his friends in the league that 'they treated me great, they paid me on time, I made more money than I could ever dream of' -- COMMISSIONER DAVID STERN: 'And I played in front of a thousand people?' Is that part of the report, too? Q. Well, that was actually one of the smallest and only gyms of that size. Most of them are over -- some of them are over 10,000. COMMISSIONER DAVID STERN: And do you know what their average attendance is? Q. This team had 8,800 season ticket holders. COMMISSIONER DAVID STERN: Well, it makes it the high. The average is 6,000. So the system will not support it. It's true that there will be individuals who could decide to do economic things, and they may even do it once or twice, but it's important as we study the global world of basketball where we are very popular, the economic model does not exist that would support such contract. And we don't mind the competition. It's probably good for our players. Q. You've mentioned the $10 tickets that you've got at all of the arenas, and obviously when you started this program, it was a very different economic time. Can you go back over some of the reasons you thought that was important, and now even more so, having a program like that for every team? COMMISSIONER DAVID STERN: I think it's fair to say that when we went to it, we were concerned that there were issues, or the average fan could not come to our game, and we said, let's put an end to that forever. We are going to price tickets so that the average fan can. Now what our owners were talking about, they want to do more. They want to either increase the number or add value to the experience. It will vary by market. Some might add, you know, a coke and a hot dog or a corn dog; I'm from New York, so I haven't had a corn dog recently. But I heard corn dogs discussed. So our owners were quite concerned that every team will deal with it differently and there were some teams that were actually going to go down, like Dallas, to have ten game, 20 games, ten games, at two bucks a ticket. So it's going to vary by market, but our owners seem quite determined to demonstrate that they want to be contributing members of the community and focus on what two and a half hours of fun can offer families. Q. Following a February 1 trade between Memphis and L.A., the one that included Pao Gasol, Greg Popovich said: What they did in Memphis was beyond comprehension." He went on to suggest a trade committee is formed. While I'm certainly not suggesting that, my question for you is: Do trades of that nature, are they problematic for the competitive aspect of the league, and if so, how do you balance trades like that with the need for a salary cap? COMMISSIONER DAVID STERN: Why do you accept that valuation? I saw Marc Gasol did a pretty good job for Spain in keeping them within two points of Team USA with four minutes to go. When I was preparing my alternate speeches. So I guess in reading that, you have written off Marc Gasol and his NBA career? . Q. And Javaras Quinn (ph) too. COMMISSIONER DAVID STERN: I just don't know. It takes time for these trades to evaluate. And it's not something that -- I would say this trade does not raise something to the level of where we should have a committee of opposing coaches to evaluate the trade and its wisdom. I think that you know, we give our teams certain discretion to run their teams, and usually these trades take more time than the reaction of an opposing coach for us to go scurrying to make changes in a system that we have been living with for decades. Q. I have a Seattle question. COMMISSIONER DAVID STERN: Thanks for joining us. Q. Thank you. Good to be here. Is there any update or have you had any contact or any progress report from the city or the state regarding next year, or are you kind of still in postmortem in that situation? COMMISSIONER DAVID STERN: I don't want to mislead, so I will say that we have had some contact and we are aware of what's going on. But I'd rather not deal with the specifics of it at the time. But we have had some positive contact. Q. Okay. And you also have a fan base in Washington obviously that will be without the NBA for the first time in 42 years. Any suggestion on what they should do now as far as following the league? Some are very angry at the league who blame all sides, both sides, one side, whatever side; what do you suggest for the fans here? COMMISSIONER DAVID STERN: Well, obviously I think that Portland is going to be vying for the affection of fans in an adjacent state. We understand the fans and their anger, frustration, depression. You know, we have something over 900 games available on NBA League Pass, either on cable or satellite, and potentially broadband and NBA TV where we have four games a week. So there's a lot out there in terms of content and a lot of an ability to follow our league. If they are so inclined, then we certainly invite them and welcome them. Q. I'm sure you have seen stories in the Washington Post about NASCAR and some of the corporate cutbacks that they have had, the fairly significant ones that they have had in the last year -- COMMISSIONER DAVID STERN: I've been in an owners' meeting all day that just ended, so I haven't read today's Washington Post. Q. Well, there was a story about NASCAR and how some of their very significant sponsors are cutting way back on sponsoring teams, minor leagues and some of their on-site promotions. Just wondering if you've had similar concerns or similar notions expressed by some of your -- COMMISSIONER DAVID STERN: I don't know if you missed my opening statement, but actually we recently announced a marketing partnership with HP and signed four significant renewals with T-Mobile, Anheuser-Busch, AutoTrader.com and SIRIUS XM Radio. Kia Motors is moving into another year of kicking off our season as the Presenting Partner of the NBA Tip-Off. That's not to say that there are other sponsors in considering renewals will be looking at value at both the national and the team level, but one of the things we talked about with our teams is the extraordinary sales effort and value-added engineering that our teams are doing to maintain their partnership relationships. So we are pretty optimistic that this will be a season that will be better in our industry than it will be for some other industries. Q. I read last week, you've said more or less you've capped the idea of an All-Star Game over in Europe, you said last year you had players talk to you about the idea. Wondering why you were not interested in the idea anymore when it sounded like at one point you might be? COMMISSIONER DAVID STERN: Well, we have players talk to us, and it would be neat from a player perspective, really neat, to play in either Paris or London or Berlin. But the logistics of it, that's one case where when you start to consider moving your audience, which is 30 teams and their sponsors, domestic licensees and broadcast partners, and generally a very large family where we use 6,000 rooms and there's maybe only a thousand of them or for international guests; I'm not sure the logistics of movement of that sort of mass is at the moment causing us not to rush out and make pans. I'm not saying never, but we have sort of an a domestic agenda to burn off for the moment in a positive way. So I didn't want to sort of suggest that something was in the offing that wasn't. Q. The NFL is playing regular season right now. There is hockey already played; what's the allure any more of just playing a regular-season game in Europe? COMMISSIONER DAVID STERN: I'll remind you, we played regular-season games in Japan in 1991. So we know how to play regular-season games. The allure of playing any games, of what the Europeans call friendlies, is to put the game on the ground. And we have six sellouts to show for it with respect to Europe and China. But to the extent we are asked the question, what about a regular-season game, we decided, okay, with the lead-up to the Olympics, we'll top a regular-season game or two or more by the 2012 Olympics. It's not about using one game to establish a base. We have got our headquarters in London. We have offices in Paris, Milan, Madrid, Istanbul. So we have a functioning business, and these games are nice to add to that business, and we are going to look for an opportunity to do a regular-season game or two, as well. But the distinction does not drive news any particular direction. We have had great success. Q. You touched on some of this already, but with this severe credit crunch that's going on right now and the shocking downturn in the economy, are you concerned at all that franchises might be over-leveraged and be potentially in trouble? COMMISSIONER DAVID STERN: No. We have no concern whatever. Our franchises are subject to debt limitation. We are aware of what their financial situations are and our owners seem to be in position to weather severe storms. And if I'm over-optimistic on one and two, obviously three is the league does keep an eye opponent all of our franchises and we have for the last 30 years combined financial statements, ticket sales, sponsorship sales. We have the most interaction and most complete information exchange amongst our teams that's ever been in sports, and ever been in the NBA. So we are comfortable there. That does not mean that businesses won't be subject to bumps and some franchises won't be affected more than others, but right now our comfort level is pretty high. Q. Can you give us any idea what franchises might be facing bigger challenges in this economic environment? COMMISSIONER DAVID STERN: No, because I don't have a particular franchise in mind. We saw the renewals which I think are pretty good; new season ticket sales are pretty good; partial plans, pretty good. They may not be the historic high levels where they like them and much of this will depend on individual markets where the economy impacts and so it may affect their group sales or their day-of-game sales. But we don't know that yet, and we'll see how the season begins before I can speak intelligently to that subject. Q. There was answer announcement today about the expansion of instant replay for the season. Can you give us a sense of how easily those proposals passed, and if there was any discussion by the owners -- COMMISSIONER DAVID STERN: I don't seem to remember a vote. Joel, did I get up for a cup of coffee? JOEL LIVTIN: No. Actually these were voted on a couple of weeks ago electronically and both proposals passed overwhelmingly. They were not discussed today. COMMISSIONER DAVID STERN: We didn't even explain that to the owners today. We just explained them in the vote -- I knew we sent a Memo out. I didn't remember that we did the e-mail vote. Q. So there wasn't a discussion about maybe other scenarios in the future that may be considered? COMMISSIONER DAVID STERN: No. Because they look to the competition committee and the league office to deal with the increments of how we engage in encouraging more utilization of instant replay. Q. Last year in the playoffs, on eight different occasions, the home team took 12 more free throws than the away team and on three occasions, they took 19 more. The discrepancy on free throws especially in the playoffs has been pretty big in recent years. Is this something that you have talked to the refs about, is there concern in the league or do you not see it as a problem at all? COMMISSIONER DAVID STERN: Don't see it as a problem at all. Have you watched the games and you could conclude there was anything other than the calls on their merits, Scott? Q. Home dominance in the NBA has kind of outdone any other sport, 22 of 24 games last year were won by home teams -- COMMISSIONER DAVID STERN: You're falling too easy into the tyranny of statistics. The question is, if you reviewed the tape, which we do, and I tell that you we are without concern on that subjects. The question is not the imbalance, because if any game or series of games, there will be an imbalance. The question is: Are the referees getting the calls right. And if you called by saying, well, there were 17 errors or something like that in favor of the home team, which there weren't; in fact, we think the refereeing during our playoffs continues to demonstrate the progress we are making in developing a very, very professional staff and trying to meet our goal of having the game called the same way no matter who is refereeing. Q. I'll take your word for it. COMMISSIONER DAVID STERN: Thank you. Thank you, everybody. THE MODERATOR: With no more questions in cue, I'd like to thank you all for joining us. End of FastScripts |
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