Silver’s Golden Touch

NBA Commissioner Reaches High In His Rookie Year
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After 22 years with the National Basketball Association in five different positions, Adam Silver assumed the role of the league’s commissioner on Feb. 1, succeeding David Stern. Over the course of his tenure, including eight-year stints as deputy commissioner and chief operating officer and as president of NBA Entertainment, Silver played an integral role in growing pro basketball’s worldwide presence and in negotiating the league’s last three collective bargaining agreements with the NBA Players Association, as well as its last two TV pacts. He also helped with the development and launch of the WNBA and the NBA Development League, the creation of NBA China and the partnership with Turner Broadcasting System to jointly manage the league’s myriad digital assets.

Silver began his time atop the league presiding over February’s All-Star Game festivities in New Orleans. In April, as the playoffs tipped off, he was thrust into the thicket of controversy emanating from racial remarks by Los Angeles Clippers owner Donald Sterling. His decisive leadership defused the highly charged situation that ultimately resulted in the sale of the team to former Microsoft CEO Steve Ballmer for a record $2 billion.

Earlier this month, Silver secured the league’s national media rights into the middle of the next decade via extensions with Disney’s ESPN and Time Warner Inc.’s Turner Sports. Not only do the deals expand linear game and digital rights for the partners, but the $24 billion pacts represent the largest rate of increase for any of the major North American sports leagues.

As part of the deal with ESPN, the NBA, long at the forefront of technological and digital development, will hold an equity stake in an over-the-top service melding pro basketball and other properties.

And as the NBA tips off its 2014-15 campaign this week, it is poised to become the first league in which regional sports networks will live-stream in-market games on a widescale basis.

For these and other reasons, Silver is the Multichannel News sports executive of the year. He touched on these and other subjects during a recent interview with online news editor Mike Reynolds and programming editor R. Thomas Umstead. An edited transcript follows.

MCN: You’ve been with the league a long time and with [former commissioner] David [Stern] for many years. Are there things you can only realize by having the job?

Adam Silver: I’d say, just day-to-day, there is a huge difference between being the No. 1 and the No. 2 guy.

I think someone in basketball once said the longest distance in sports is the distance between the coach and the assistant coach … And I think it’s just very different at the end of the day when you are the one making the ultimate decisions — big decisions and small decisions — most of which never become public, but in terms of dealing with 30 disparate teams and 30 independent owners, many of whom have a different point of view from other owners on certain issues, that it’s a constant balancing of priorities. I would just say being the CEO of the organization poses very different challenges than my prior five positions.

MCN: Do you speak to David often? Can he stay away from things?

AS: David (laughter) remains a consultant to the league and a very close personal friend. We talk now and again and in fact, David came to Berlin, where the San Antonio Spurs played Alba Berlin. It was great to spend time with him and his wife, Diane.

David has an office down the street from the NBA’s offices in New York and he’s doing some consulting and some speaking and is doing very well. As for me, obviously in a new role, it’s been a really exciting first few … I guess nine months now.

MCN: The league has a presence in Europe. [National Football League commissioner] Roger Goodell has talked a lot about London. Do you want to expand there, or will you go stateside first?

AS: There are no plans to expand anywhere at this time. Europe expansion is something we’ll continue to look at. It’s a long-term project, but we’re seeing the emergence of true state-of-the-art facilities in Europe … But there are still economic issues in southern Europe that are an impediment to expanding in Europe.

The league right now, we’re in the process of sort of solidifying the 30 franchises that we have in the U.S.; we’re seeing the benefits of the new collective bargaining agreement, plus revenue sharing, kick in where we’re moving to the point where every franchise is in a position where they can compete for championships and hopefully run profitable franchises. Expansion is not on the front burner right now. It’s something we’ll continue to look at both in Europe and domestically, but there’s nothing imminent.

MCN: How do you see the season going this year?

AS: The state of the league is terrific. I can’t remember a time when there were more interesting and exciting franchises that fans were hotly anticipating watching. I can’t wait to see the new Cleveland Cavaliers, the new Chicago Bulls, Phil Jackson’s New York Knicks, the impact that Luol Deng will have on Miami. What’s [Los Angeles Lakers star] Kobe [Bryant] got left in the tank? The Clippers under Steve Ballmer. The Spurs, let’s not count them out. Let’s see if they can repeat and if Tim Duncan can get his sixth ring before he retires.

We have a really healthy combination of young players coming in, experienced all-stars.

What we’re seeing, too, as part of the impact of the new collective bargaining agreement, it’s not just financial. It’s not just creating a better financial environment in the league, but also we’re seeing greater parity and we’re seeing every team, regardless of market size, in a position to potentially compete, and I think that’s really healthy for the league.

MCN: Does that translate into higher ratings?

AS: Absolutely. I know ESPN and Turner are anticipating ratings growth this year. Again, I think it’s a function of more so-called national teams, more exciting teams that people throughout the country are interested in watching.

MCN: How important is the NBA’s move into more digital technology in terms of getting things to the consumer?

AS: I think it’s really important. We’re seeing now, with the announcements of HBO and CBS going over the top … I think we were early adopters in that we recognized we had to take the games to whatever platform our fans wanted to consume them on.

Some of the [regional sports networks] have been experimenting with authenticated subscribers. And so, if somebody is already paying their distributor for the games and wants to watch those games on his or her tablet or whatever mobile device, we think it makes a lot of sense to deliver them the games in that fashion.

So if you’re not able to be home in front of your large-screen HDTV, but you’re on the go or at a friend’s house, you’re able to just take out your mobile device and watch the game. So we think that’s critically important for our fans.

MCN: Can you give us a sense for the OTT service ESPN is going to launch with the league?

AS: It’s going to be a 24/7 streamed service to mobile devices. It will contain a full package of NBA games, and will likely include other live sports as well. It’ll be a package that is going to be made available directly to the consumer and possibly paid through their mobile provider, with potentially some sort of surcharge on top of whatever their monthly fee is in order to get that additional programming.

Depending on the technology, it may be an always-on service based on the new technology we hear is coming to cellphones. There potentially will be a surcharge for the content but won’t be an additional charge for the additional bandwidth that that service is using on a monthly basis, making it more affordable.

But we think it’ll be a very attractive offering, and we see ESPN sort of dipping their toe into the over-the-top waters and at the same time balancing that against the fact that they are very much part of the [cable package].

MCN: You mentioned the HBO and CBS announcements. [Both programmers announced plans for over-the- top subscription-TV services earlier this month.] Can the service launch earlier than 2016-17?

AS: I think there’s a possibility. We wanted to get our core television agreement done and then we agreed we’d quickly turn back to the OTT service. So we have an agreement in principle with ESPN but, in fact, I just spoke to [ESPN president] John Skipper earlier today about continuing our discussions so we can firm up exactly how we’re going to launch this OTT service. There is certainly no reason that we’re going to wait two years in order to do something.

MCN: Given the streaming from the RSNs and the OTT service, won’t they compete head-to-head with [out-of-market package] NBA League Pass?

AS: I think for those fans, customers, that want League Pass, I think it’s a different customer that wants a larger selection of games, or wants to get all games of a particular team that he or she wants to follow, or get the full complement of games every night that aren’t offered on a national service. So I think the services will be complementary.

MCN: How is NBA TV performing?

AS: We’re very happy with NBA TV. We love the production being supplied by Turner and the use of their talent down in Atlanta. And in fact, as part of our new television relationships, Turner has agreed to now take on the affiliate sales for NBA TV as well. So rather than the league office selling NBA TV to the distributors as a one off, we’ll now be part of the sales team that’s providing TNT, TBS, Cartoon [Network], CNN and other networks, which we think will give us a much stronger position in the marketplace.

MCN: The new deal is $24 billion dollars over nine seasons, with the biggest rate of increase among the major sports leagues in the states. Is that a function of being the last to the table, the league’s being in a great position, or are you guys just the best negotiators?

AS: [Laughter.] I think it’s a testament to the fantastic long-term partnerships we’ve had with Disney and Time Warner.

MCN: During the press conference you said you held discussions, but not negotiations, with Fox and Comcast/NBCUniversal. Were you and the media committee unanimous in this decision?

AS: Yes, we were unanimous in this was the way to go. I will say that we have very close relationships with Comcast and Fox. Fox has 17 of our teams’ RSN deals and Comcast has eight … As to whether we could’ve gotten more if we went to market, I guess we’ll never know. But we feel very good about the deals we did.

MCN: There will be a 12-game package that Turner will have in addition to its Thursday-night doubleheaders. Was Turner ever in the mix for The Finals in some capacity, on a shared, alternating-years basis?

AS: I can say that over the course of many months of negotiations we discussed several different permutations in terms of The Finals and [the] All-Star [Game] and the other marquee properties. I think all sides agreed that in order to get these deals done on the timeframe, we weren’t going to be able to do it if we rejuggled where all the properties went.

MCN: In hindsight, how do you view the sale of the Los Angeles Clippers and the Donald Sterling situation?

AS: In the moment, I didn’t have the luxury of thinking long-term. But now to me what that incident represents is the NBA’s ability to defend the values we share as a league and as a community member of a larger sports community. For me, it was enormously impactful as an early experience in learning how to be a leader. Again, I can only say that I did the best I could under what was a very, very trying circumstance at the time.

MCN: The [Atlanta] Hawks situation [Bruce Levenson, then-principal owner of the team, voluntarily agreed to sell his stake in the Hawks after the leak of an email that urged team officials to make changes to attract more white fans to games]: Did the league get a bit of a pass because when the news surfaced the media was so focused on the NFL’s Ray Rice problem? Could new ownership be in place by year-end?

AS: To your first question, I’d say I don’t think we got a pass on Atlanta and I credit Bruce Levenson for the way he handled the situation. His situation was completely different than the situation we had in Los Angeles. Mr. Levenson self-reported that he made that mistake to the league office and he decided completely on his own to sell his stake in the team. So I think all the credit goes to him for the way it was handled and why it wasn’t necessary for it to be an ongoing story. He brought closure to it almost immediately.

And in terms of the timeline for sale, you know, Bruce Levenson remains the owner of that franchise. It’s his process that he’s running to sell the team. So I know that [Hawks president and former Turner executive] Steve Koonin said he is hopeful that the team gets sold by the end of the year. I’m not sure how realistic that timeline is … And while there’s not a set timeframe, I know they’re moving as quickly as they can.

MCN: Did you speak to Roger Goodell about the Ray Rice incident?

AS: Roger and I did speak and it would not be appropriate for me to comment on those conversations.

MCN: We wanted to wind down with a little bit of fun. We’re fantasy players: Any inside scoop from the commissioner about when Kevin Durant comes back?

AS: I don’t have any inside scoop. I mean he is a wonderful young man and the league is going to miss him almost as much as [Oklahoma City] will when he’s out. And I just wish him all the best and I hope he’s back on the court as soon as possible.

MCN: The 2015 All-Star Game is at Madison Square Garden. Saturday night is at Brooklyn’s Barclays Center. Was this a Solomonic or a Silver-esque compromise?

AS: Yes. It’s Friday and Saturday in Barclays. We’ve got the rookie/sophomore game Friday night and All-Star Saturday Night events. And this was something [Nets owner Mikhail] Prokhorov and [Knicks owner James] Dolan came to an agreement that it made sense. I think they both wanted the All-Star Game for this season and both, in essence, had a claim to it. You had a new building in Brooklyn and you had a transformed, as they call it, building in Manhattan. Given that New York is already such an incredible basketball Mecca, let’s make it the center of the world for basketball, so that we can amplify that impact by using two arenas instead of one. I think they both thought it was a great idea and are working together very cooperatively.

MCN: You dunking the ball or getting out of Shaq’s grip [Silver was hoisted at an All-Star Game event by O’Neal] — what’s more realistic?

AS: He kept coming closer and closer and I thought he was about to whisper to me and all of a sudden I was being levitated. And the only way I’m going to dunk, frankly, is if Shaq picks me up. I have no hops these days.

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