NBA Commissioner On The Media Rights Deal, New Technology And WNBA's Growth

Introduction (0s)

• Adam is being thanked for being present (11s)

Media rights (12s)

• The NBA has chosen new media rights partners, effectively ending a nearly 40-year relationship with Warner Brothers Discovery, with the decision being made after a long period of conversations and negotiations with various parties, including dozens of discussions with current partners to discuss what was working in the deal and potential changes (38s).
• The exclusive negotiating period involved considering a third party, which ultimately led to Amazon joining the table, and while a deal couldn't be reached with Warner Brothers Discovery, agreements were made with Disney and Amazon (1m27s).
• The decision to end the relationship with Warner Brothers Discovery was not taken lightly, given the long history between the two parties, but ultimately, a meeting of the minds could not be reached (1m49s).
• The NBA has previously ended and re-established partnerships, such as with NBC, with whom they had a longtime partnership before going out of business and now being back in business (2m5s).
• Despite the limitations due to the pending Warner Brothers Discovery lawsuit, it is acknowledged that there was a very good chance of reaching a deal with Warner Brothers Discovery, but ultimately, the negotiations were unsuccessful (2m35s).
• The relationship between the NBA and the leaders of media companies is important when agreeing to a deal, as partnerships involve working together to solve problems, particularly in a rapidly changing media landscape (3m23s).
• The NBA has entered into an 11-year deal, and it is understood that things will change over time, requiring adjustments to be made in the partnership, rather than strictly adhering to the contract (3m52s).
• Relationships matter in business partnerships, and when things are going well, there is less need to refer to the contract, but when business is struggling, the contract may be brought up more frequently (4m25s).
• The reason one side may bring up the contract could be due to secular forces affecting their business, such as losing millions of cable subscribers, rather than the relationship with the NBA (4m36s).
• Money is always an issue in business, and when coming together in a partnership, both sides try to do well for their business while taking a long-term view of the partnership (5m7s).
• The NBA considers all factors when evaluating partnerships, including the potential loss of a studio show, and did not weigh the loss of "Inside the NBA" more than the loss of the long-term partnership with TNT (6m3s).
• The WNBA has seen a surge in popularity, which is a significant change in the sports landscape (6m16s).

The rise of the WNBA (6m20s)

• The WNBA's media rights deal was done in partnership with the NBA, and given the surge in ratings and attention, it's questioned whether they should have done their rights deal separately (6m21s).
• The WNBA and NBA are considered one integrated business, and when negotiating the media rights deal, they collectively went out and had discussions around the WNBA (6m37s).
• The market may be in a different place now than it was at the time of negotiating, and there are still additional WNBA deals to be done to determine if there are different valuations (6m54s).
• The aggregate of the deals already done, plus the deals the WNBA is going to do, is expected to result in roughly a six times increase from the current rights fees (7m16s).
• Resets are built into the existing deals, allowing for both sides to sit down in good faith and make adjustments if the market is better or different than predicted (7m27s).
• The WNBA had experienced upticks in ratings along the way, and there was an acknowledgment from both sides that they would make adjustments if the market changed (7m37s).
• The regional media rights business model seems to be in disarray, and a solution is being sought (7m58s).

Regional media rights (8m2s)

• The NBA is studying the regional media rights situation extensively after completing national deals, as 18 teams are dealing with regional sports networks that are either defunct or in bankruptcy (8m18s).
• Local rights are worth as much as national rights, and historically, they are worth more due to the concentration of fans in specific areas, such as New York having more Knicks fans than nationally (8m43s).
• The issue with regional sports networks is that they are mainly cable-based, and the world has changed with streaming services picking up viewership, requiring a change in the model (8m56s).
• The NBA expects more games to become available on streaming, and local sports has become more prominent in the market share hierarchy, commanding more interest (9m26s).
• There is a special connection between local providers and fans, and a competition for the default channel, with people often starting with their local sports teams (9m53s).
• The NBA believes that when local rights become available, competing platforms will be interested, and the marketplace will ultimately determine the value of those rights (10m34s).
• The ideal scenario would be for a service to offer unique content for local viewers, whether it's a national or global service, or a local-only service, taking advantage of available technology (11m1s).
• The current regional sports network model may evolve into a broader-based service with certain rights only available to specific markets, offering more possibilities with technology (11m29s).
• The NBA is bullish on the long-term value of local media rights, expecting them to be valued similarly to national rights (11m40s).

State of the NBA (11m45s)

• The NBA is in a great place, with top players like LeBron James, Kevin Durant, Steph Curry, Nikola Jokic, Luka Doncic, and Giannis competing for MVPs every year (11m46s).
• The league has just come off a year where the world champion is arguably its most storied franchise, and it has tripled its media rights deal (12m7s).
• The WNBA is also experiencing significant growth (12m10s).
• The NBA has had six different teams win championships over the last six years, which is seen as an accomplishment due to the increased parity and competition in the league (12m47s).
• While some fans may prefer dynasties, data shows that more competition drives interest in the league, and the current system is designed to create more parity through the collective bargaining agreement (13m2s).
• The league's goal is to provide a process where all teams have a roughly equal number of "chips" and a decent chance to win championships, rather than just a select few teams dominating (14m5s).
• This approach is seen as more fun and engaging for fans, as it allows them to believe that their team has a chance to win, even if they're not a traditional powerhouse (14m19s).

The 2011 trade veto (14m36s)

• The 2011 veto of the Lakers trade for Chris Paul is a decision that has been debated by a segment of the NBA fan base for years, and it can be argued that it fundamentally altered the league's competitiveness from that point forward (14m39s).
• The players involved in the trade needed to be traded because it was public knowledge that the teams wanted to trade them, but in hindsight, it's unclear if the veto was the right decision (14m56s).
• David Stern vetoed the trade as the interim governor overseeing the New Orleans team, not as the commissioner of the NBA, and he made the decision because he didn't think it was in the best interest of the team (15m12s).
• The situation became very public and messy, but it's not uncommon for ownership to reject a trade proposed by a general manager, it's just that this case was highly publicized (15m36s).
• Adam Silver was involved in the decision-making process but didn't own the decision, and he learned from the situation, particularly when the league was running the Los Angeles Clippers after a well-known incident (15m43s).
• Adam Silver appointed Dick Parsons as the interim governor of the Los Angeles Clippers, making it clear that Parsons was in charge of the team's decisions, including trades and signings, and not Adam Silver himself (16m8s).

Innovative technology (16m51s)

• The current state of gameplay in the NBA is satisfactory, with a good balance of variety in plays and shot selection, and there's no need for a rule change to address the number of three-pointers being taken (16m58s).
• The NBA is exploring the use of technology, such as Hawk-Eye, to automate certain calls, like determining which team the ball went out of bounds off of, to improve the accuracy and speed of the game (17m28s).
• The implementation of this technology could potentially remove the need for line judges and reduce the number of replays, allowing the game to flow more smoothly and quickly (17m35s).
• The use of AI-powered technology could also help officials make more accurate calls, reducing the difficulty of their job and allowing them to focus on subjective calls (19m5s).
• The overall time of an NBA game is currently around two hours and 15 minutes, but the league is looking to improve the pace of the game by reducing the number of replays and stoppages (19m30s).
• Players and coaches generally prefer a faster-paced game, with minimal interruptions, and the use of technology could help achieve this goal (19m56s).
• The NBA is investing in the development of these technologies, but they are not yet ready for implementation this season (20m10s).
• The NBA is considering automating certain category calls with the help of companies like Hawkeye to improve the game (20m15s).
• There are no plans to introduce a four-point line in the near future (20m20s).
• The NBA is exploring expansion, but there is no set timeline, and the league is not limiting itself to specific cities like Las Vegas and Seattle (20m25s).
• Before considering expansion, the NBA wanted to finalize a new collective bargaining agreement with players and secure new media deals, both of which have been accomplished (20m45s).
• The league will begin an internal process to understand the dynamics of expansion, including the potential dilution of talent and the value of interests being sold to new partners (21m7s).
• Expansion is equivalent to selling equity in the league, and the NBA must consider the impact on its existing partners, media deals, and international opportunities (21m15s).
• The league also owns a large part of the WNBA, which is also considering expansion and faces similar challenges, including the potential dilution of talent (21m31s).
• The NBA will assess various factors, including the availability of talent, the competitiveness of teams, and the attractiveness of new markets, before making a decision on expansion (22m9s).
• Seattle and Las Vegas are two markets being considered for expansion, but other cities, such as Mexico City and Vancouver, have also expressed interest (22m19s).
• The NBA expects to begin the expansion process in the spring, with several months of evaluation and consideration ahead (22m44s).

WNBA team evaluations (22m56s)

• The WNBA team evaluations have been a topic of discussion, with some owners expressing frustration that the teams are not worth more due to the league's control, and efforts are being made to address this issue with owners who also own NBA teams (22m56s).
• The WNBA is highly integrated with the NBA, with shared office space, but under Commissioner Engelbert's direction, separate departments have been added, such as marketing and basketball operations (23m40s).
• The league is collectively looking at issues related to the operation of the WNBA, including valuation, and figuring out the right way to operate going forward (24m1s).
• An election is coming up in a couple of weeks, and there is no concern about players or coaches speaking out after the result, as long as they do so in a respectful manner (24m6s).
• Players, coaches, and owners have the right to free speech, and it is healthy for them to express their opinions, as long as they do so respectfully and within the league's guidelines (24m46s).
• The league has guardrails in place for speech, including respect for the listener, time, place, and manner restrictions, and would step in if speech were to disrupt a game (24m52s).

International expansion (25m31s)

• The NBA has more than experimented with expanding its presence in China, having played numerous games there and established a significant business in the country (25m48s).
• The league has also been playing games in the UAE and Abu Dhabi in recent years, but has not "dabbled" with Saudi Arabia from an investment standpoint (25m56s).
• The NBA takes direction from the US government, particularly the State Department, when it comes to operating in international markets and considers advisories and direct conversations with US officials (26m12s).
• The league also looks at what other similarly situated US companies, including entertainment and media companies, are doing in these markets to ensure it is not operating in isolation (26m25s).
• The NBA's direct experience in international markets and whether its activities align with the league's mission to improve people's lives through basketball and sport are also key considerations (26m49s).
• The league is directly impacted by global politics, particularly when the US government advises against doing business in a particular market, and takes these factors into account when making decisions (27m6s).
• Despite these challenges, the NBA sees sports as a unifying force that can bring people together, and believes that basketball can be used to connect people around the world in a positive way (27m30s).

Sports betting (28m13s)

• A regulated framework for sports betting is considered better than illegal sports betting due to increased transparency, and the current system with regulated markets in 35 states and D.C. is preferred over a federal framework, although the latter is still the ideal choice (28m42s).
• The possibility of a scandal involving a major NBA superstar is acknowledged, but the likelihood is reduced with regulated markets, as they provide more transparency and a greater chance of catching aberrant behavior (29m57s).
• The concern about regulated markets allowing for more sports betting and its negative impact on society, such as increased bankruptcy and targeting of low-income families, is acknowledged, but it is also noted that lotteries in every state are viewed as largely regressive (30m56s).
• The median bet in online betting companies is $5, and while there will be problem gamblers, a regulated market is considered better equipped to capture and address the issue than an illegal market (31m16s).
• The question of whether there should be more regulation around the marketing of sports betting is considered fair, and self-regulation by major leagues is currently in place, with a limit on the amount of advertising taken (31m32s).
• The growth of sports provided through streaming services may lead to additional regulation, and the impact of this on sports betting and marketing will be closely monitored (31m51s).
• The NBA is working on providing more functionality and personalization to its viewers, including the option to opt-out of sports betting ads and commentary, with the goal of catering to different viewer preferences (31m57s).
• The global nature of the internet and the sports market makes it challenging to regulate sports betting, as people can access betting sites from anywhere in the world, even if it's not legalized in their country (32m23s).
• Despite concerns about problem betting, it's unlikely that making sports betting illegal in the US would solve the issue, as it was already widespread before legalization (33m0s).
• The commissioner is concerned about the impact of geopolitics and divisiveness on the sport, as it can create a toxic environment and make it difficult for people to work together respectfully (33m30s).
• The commissioner believes that athletes have the right to express their opinions on politics, but encourages them to do so in a respectful manner and to be good listeners to other people's points of view (34m7s).
• The commissioner's concerns about politics and divisiveness are not unique to sports, but are also a concern for him as an American (34m29s).
• The commissioner is a self-described "worrier" and stays up at night thinking about various issues, including the challenges of playing West Coast games and the impact of politics on the sport (33m26s).