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Speaker 1: The NBA's popularity seems to be hitting a new peak

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Speaker 1: as ticket sales, revenues, and franchise value continue to rise.

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Speaker 1: NBA Commissioner Adam Silver sat down with Carlisle Group co

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Speaker 1: founder David Rubinstein for his Bloomberg television show Peer to

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Speaker 1: Peer Conversations and spoke about the history of basketball and

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Speaker 1: why it's so popular around the world. You have been

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Speaker 1: the commissioner since two thousand and fourteen, and you had

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Speaker 1: spent twenty two years at the NBA office before that,

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Speaker 1: And before that you were a graduate of the two

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Speaker 1: best schools to go to in combination, Duke University and

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Speaker 1: the university's Cargo Law School, right, which you happen to

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Speaker 1: go to, right, So you can't do any better than that.

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Speaker 1: So let's just start with the NBA today and how

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Speaker 1: it's doing. And honestly, since you've been the commissioner, the

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Speaker 1: revenues are up, uh, ticket sales are up. The owner's

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Speaker 1: value of their teams is up by about three times.

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Speaker 1: So are you adequately paid for the job you're doing?

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Speaker 1: Do you think today? Um, the NBA it seems to

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Speaker 1: be at at its peak right now. It's very popular

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Speaker 1: all over the world. Why do you think it is

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Speaker 1: that NBA basketball is so popular around the world, whereas

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Speaker 1: our Major League Baseball and professional football isn't quite as

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Speaker 1: global sport. Well, I think part part of the reason

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Speaker 1: is that it's been an Olympic sport since the nineteen thirties.

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Speaker 1: I think that's made a big difference, and that it's

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Speaker 1: a sport that has been played around the world. It

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Speaker 1: was actually invented by Christian missionaries in you know, James

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Speaker 1: Naismith was a Christian missionary, and the game was shortly

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Speaker 1: after it was invent in Springfield, Massachusetts, brought to China,

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Speaker 1: and so it's it's been global since its earliest days.

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Speaker 1: And I think when you think of that the two

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Speaker 1: most popular global sports, I don't think it's an accident

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Speaker 1: that both involved round balls. One you kick and one

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Speaker 1: you shoot use your hands. And I think there's almost

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Speaker 1: something um evolution ary about it about round balls. And

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Speaker 1: I think most people, even if you're not a basketball player,

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Speaker 1: if you know, whether it's your you know, balling up

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Speaker 1: paper and shooting it into a garbage can, or if

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Speaker 1: your little kid I have I have a young daughter

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Speaker 1: and she sees a ball, she she kicks it, or

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Speaker 1: she picks it up and she throws it. So today,

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Speaker 1: are there any more franchise than might be for sale?

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Speaker 1: By the way, is there any not that I'm aware of?

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Speaker 1: Not they're were okay, But some of the people that

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Speaker 1: have bought these franchises have done extremely well. People bought

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Speaker 1: I think that, like said, the seventies Sixers were brought

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Speaker 1: a few years ago for three or four hundred million dollars,

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Speaker 1: the Bucks for maybe four or five million dollars. And

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Speaker 1: when Steve Bamber came in and paid two billion dollars

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Speaker 1: for the Clippers, where all the other owners happy because

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Speaker 1: it made their their team look more valuable or not? Yes,

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Speaker 1: they were happy? And uh but and and since Steve

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Speaker 1: bought the Clippers, two teams have sold for more than

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Speaker 1: he paid, Um Houston Rockets and the Brooklyn Nets. So

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Speaker 1: one of the most difficult things you had to do

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Speaker 1: after you became the commissioner was to an effect banned

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Speaker 1: the then owner of the l A Clippers. Was that

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Speaker 1: a tough decision for you? Um? Yes, I mean I

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Speaker 1: think people may not realize it, but he's the only

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Speaker 1: owner who's ever permanently been banned from a sport. Um

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Speaker 1: and it's it's difficult because I in essence worked for

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Speaker 1: the owners. I worked for the owners collectively. I don't

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Speaker 1: work for any one owner, but my job is to

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Speaker 1: do what's in the best inches of the league. And

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Speaker 1: as people here may remember that the tape that came out,

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Speaker 1: the recording for which he was banned, came out, Um,

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Speaker 1: you know, in the middle of the night l a time,

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Speaker 1: so I was in New York, so I didn't hear

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Speaker 1: until Saturday morning, and he was banned on Tuesday. So

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Speaker 1: I mean, he received NBA style due process. But I

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Speaker 1: think in most walks of life, people you know, to

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Speaker 1: think that from beginning to end that was four days

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Speaker 1: as was remarkable. I think he paid be less than

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Speaker 1: a hundred million dollars when he bought the team many

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Speaker 1: many years earlier, was in San Diego. Then, I know

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Speaker 1: that's the way you look at it. That but he

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Speaker 1: made a big profit, I know. So my view is, yeah,

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Speaker 1: I don't think frankly, from his standpoint, he's an extraordinarily

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Speaker 1: wealthy guy, and um, I don't think his reaction was,

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Speaker 1: look how much money I just made the team was

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Speaker 1: worth that regardless of what the family didn't call you

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Speaker 1: up and say thank you for doing that. Nothing they

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Speaker 1: didn't do that, Okay, So but I understand that's how

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Speaker 1: you look at it. Private equity. So one of the

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Speaker 1: controversial things in college basketball has been the so called

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Speaker 1: one and done situation where college are high school players

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Speaker 1: go to college for one year more or less, and

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Speaker 1: then they get drafted into the NBA. UM are you

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Speaker 1: in favor of continuing that one and done policy? And

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Speaker 1: what would you change it to if you did change it.

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Speaker 1: It's it's interesting when so when I first became commissioner

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Speaker 1: UM five years ago, I announced that I thought the

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Speaker 1: minimum age for entering the NBA should be twenty instead

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Speaker 1: of nineteen. Roughly eleven years ago we changed it from

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Speaker 1: eighteen to nineteen, and that has to be collectively bargained

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Speaker 1: with our players Association. So that's an area where I

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Speaker 1: don't have the unial lateral right to make a decision.

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Speaker 1: I'd say, then, once I became commissioner and and and

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Speaker 1: became more aware of how the one and done situation

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Speaker 1: was actually worked in operations, sort of how the recruiting worked.

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Speaker 1: UM then there's obviously been some very high profile um

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Speaker 1: UH criminal proceedings around sort of college sports right now.

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Speaker 1: And then in the middle of that, Um Mark Emritt,

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Speaker 1: the head of the n C Double A, appointed a

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Speaker 1: commission that included what was chaired by Conna Lisa Rice

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Speaker 1: um to look at lots of issues involving college sports,

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Speaker 1: but particularly to focus on the one and done situation.

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Speaker 1: And ultimately, Conno Lisa Rice and her commission recommended to

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Speaker 1: the NBA and our Players Association that we returned to

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Speaker 1: the eighteen year old entry age. And I would say

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Speaker 1: that that had a huge impact on me. That together

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Speaker 1: with a better understanding of what is happening to these

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Speaker 1: top players in that it's it's hard even to see

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Speaker 1: it as a full year. In many cases in college,

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Speaker 1: most of them leave once the tournament is over. I've

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Speaker 1: changed my position eighteen. The Players Association has historically been

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Speaker 1: that it should be eighteen, but there are a bunch

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Speaker 1: of issues that need to be worked through between us

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Speaker 1: and the Players Association, so it's something we're an active discussion.

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Speaker 1: It's a few years away. I think also, if we

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Speaker 1: were to make the change, I think the first season

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Speaker 1: that would make sense to make that change for is

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Speaker 1: two thousand twenty two, in part because that's the current

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Speaker 1: class that's just an essence finished their freshman year in

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Speaker 1: high school, and the cohort is pretty well known. I mean,

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Speaker 1: lots of these young men may move from you know,

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Speaker 1: tenth projected pick to third projected pick. But but there

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Speaker 1: aren't that many surprises in the cohort. And so if

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Speaker 1: there was no longer an issue of eligibility because remember now,

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Speaker 1: because of n C double n A regulations, we can't

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Speaker 1: be involved with that cohort of players right now. So

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Speaker 1: if the rule were to change, we and our Players Association,

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Speaker 1: USA Basketball other groups would work much more directly with

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Speaker 1: those young players to prepare them for the NBA eight

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Speaker 1: I mean the one and done after they finished the

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Speaker 1: n s A tournament. They're not finishing their classes. I

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Speaker 1: don't want to say that's the case for all schools, um,

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Speaker 1: but it's the case with many of those players, understandably

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Speaker 1: because um the moment they fin look I I think

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Speaker 1: that's the whole hypocrisy in a way of the one

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Speaker 1: and done program. Those top players are being recruited by

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Speaker 1: those schools as the best path to being a top

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Speaker 1: draft pick in the NBA. So once they once they

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Speaker 1: finish their collegiate career, after one season, they are fully

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Speaker 1: focused on preparing for the NBA draft. So whether or

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Speaker 1: not they're still going to some classes. And remember, I

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Speaker 1: mean just to put it in context, for a player

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Speaker 1: into for a top player coming into the NBA, let's

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Speaker 1: say a top ten pick that's going to come into

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Speaker 1: next year's draft. Given our pay scale now, and assuming

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Speaker 1: the NBA continues to prosper, and assuming that player stays

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Speaker 1: healthy and and plays around where the expectations that player

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Speaker 1: will play, that player, justin salary alone is going to

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Speaker 1: make well over two hundred million dollars. So um, So

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Speaker 1: this this the steaks. It's it's hard. It's hard. I

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Speaker 1: think if you were that parent or guardian to say

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Speaker 1: to that player it's more important that you go to

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Speaker 1: three more classes as opposed to preparing for such a

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Speaker 1: critically important decision. I think it's it. And I think

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Speaker 1: that's where the hypocrisy lies. Your referees are. They seem

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Speaker 1: to be in pretty good shape there. Sometimes they're you know,

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Speaker 1: not twenty years old, but they seem to be. You

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Speaker 1: require them to exercise a lot. They don't seem that

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Speaker 1: pot bellies. They seem to be really good shape. They

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Speaker 1: I hope that's not the best you can say about them.

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Speaker 1: They don't have pot bellies. Well, they seem to be

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Speaker 1: for guys that are age, they'rething to being pretty good shape.

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Speaker 1: But I think that are there women referees? Yeah, absolutely,

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Speaker 1: by the way that we have UM. We have three

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Speaker 1: female referees right now, and I think it's an area

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Speaker 1: frankly where I've acknowledged that. I'm not sure how it

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Speaker 1: was that it remained so male dominated for so long,

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Speaker 1: because it's an area the game where UM, physically, certainly

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Speaker 1: there's no benefit to being a man as opposed to

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Speaker 1: a woman when it comes to refereeing. And in fact,

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Speaker 1: you know, we're now in terms of the last group

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Speaker 1: of referees that we hired into the league, and they

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Speaker 1: came from our development league is are is called our

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Speaker 1: g league. UM. Two of the last five officials that

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Speaker 1: came in where women and the and the goal is

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Speaker 1: going forward it should be roughly fifty new officials entering

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Speaker 1: the league. OK. So let's talk about UM. One serious

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Speaker 1: issue that I didn't really address before. You've said that

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Speaker 1: players have UM depression and melancholy and they feel isolated.

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Speaker 1: Can you explain, you know, somebody's making fifty million dollars

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Speaker 1: a year. They seem to be well respected by everybody.

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Speaker 1: Why are they so depressed and isolated? Well, and in

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Speaker 1: all seriousness, what I've said is that when I in

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Speaker 1: talking about our players, I said they are no more

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Speaker 1: immune from mental illness than any other sector of our society.

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Speaker 1: And I think I'm sure people in this room no

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Speaker 1: families firsthand that regardless of how much money you're making,

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Speaker 1: or your position in life or your family, that in

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Speaker 1: some cases it's chemical, in some cases environmental, but that

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Speaker 1: it cuts across, you know, alsocio economic groups. And and

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Speaker 1: what's changing though in our league, and and again I

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Speaker 1: think this is it's it's wonderful that that players are

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Speaker 1: now willing to talk about these things. We had too

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Speaker 1: high profile players the Margin Rosen when he was still

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Speaker 1: with the Raptors and Kevin Love on the Cleveland Cavaliers

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Speaker 1: who came out publicly and said they were suffering from depression,

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Speaker 1: had issue is with anxiety, you know, and I know

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Speaker 1: firsthand they weren't the first players in our league suffering

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Speaker 1: with issues like those, but they were certainly the first

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Speaker 1: players while they were current players in the NBA to

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Speaker 1: talk about it and I think what what And I've

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Speaker 1: heard from so many mental health professionals that when it

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Speaker 1: really goes to the heart of your question, when people

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Speaker 1: who are perceived as having everything, and then especially in

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Speaker 1: something in professional sports where there's a certain machoism associated

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Speaker 1: with it and and a certain perceived toughness that and

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Speaker 1: I think that the stigma historically has been suck it

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Speaker 1: up right, and you're not tough if if if you're

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Speaker 1: dealing with something that's not physical and where you know

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Speaker 1: when originally are our junior basketball programs were literally just

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Speaker 1: about basketball skills like keep your elbow in and shoot

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Speaker 1: this way and this is how you play defense. And

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Speaker 1: then we morphed those programs into more about physical fitness

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Speaker 1: in addition to basketball skills. And now in the last

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Speaker 1: year we've added a mental wellness component. It's been incredibly

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Speaker 1: well received by people throughout the country you know who who,

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Speaker 1: because I know from the letters we get and from

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Speaker 1: the mental health professionals we work with that kids are

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Speaker 1: now coming in and saying, Wow, this NBA player is

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Speaker 1: able to you know, raise their hand and say, you know,

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Speaker 1: I'm suffering, I need help. You know, regular kids feel

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Speaker 1: comfortable doing that as well, if you are, I suppose um.

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Speaker 1: But the Supreme Court has said that sports betting is

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Speaker 1: more or less going to be legal. Essentially it's legal.

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Speaker 1: So are you worried that in the nineteen fifties and

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Speaker 1: so on the college sports we had sports betting shaving

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Speaker 1: people were because of the odds are related to the

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Speaker 1: point spread, are you worried about that in the NBA.

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Speaker 1: I'm always worried that we could have a scandal of

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Speaker 1: any kind, certain certainly one involving sports betting. I think

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Speaker 1: that we are better off with a regular, regulated betting

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Speaker 1: framework than keeping it all underground and illegal. And I

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Speaker 1: know firsthand as the league that you know it's the

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Speaker 1: Supreme Court decision has only been within the last year,

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Speaker 1: and now something like eight states have now legalized sports betting.

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Speaker 1: Our preference would be that there would be a consistent

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Speaker 1: federal framework. Because of your league, and you're potentially dealing

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Speaker 1: with fifty different states and all their different requirements, it

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Speaker 1: becomes a huge burden for the business and it's also

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Speaker 1: a bit of a race to the bottom among the

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Speaker 1: states sometimes from a regulatory standpoint. But putting that aside,

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Speaker 1: in terms of our concern that like any public market.

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Speaker 1: Just if you think of NASDAC or New York Stock Exchange.

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Speaker 1: Part of their ability to to ferret out illegal activities

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Speaker 1: from the algorithms that that show when there's um deviations,

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Speaker 1: that that that caused their computers to to to you know,

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Speaker 1: issue red flags and say something aberational has happened here.

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Speaker 1: When everything is illegal, other than having in essence tipping

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Speaker 1: services and relationships, we can't know those things. So so

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Speaker 1: I think it's better that it be transparent, regulated, you know,

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Speaker 1: and controlled and authenticated. And this way also people are

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Speaker 1: betting with their credit cards, so you know who they are.

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Speaker 1: And there's it's been not only legal and obviously the

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Speaker 1: state of Nevada for a long time, but for decades

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Speaker 1: in Europe. And I've learned a lot from our counterparts

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Speaker 1: soccer leagues because they're they've worked and lived in regulated

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Speaker 1: betting frameworks for a long time, and they have much

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Speaker 1: better controls than we would. You like to own a

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Speaker 1: piece of the betting profits in the league, not the profits.

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Speaker 1: I think our proposal is um. I mean, it's been

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Speaker 1: a bit controversial, but you know, we've proposed that we

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Speaker 1: received something that that I've called an integrity fee and

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Speaker 1: some people said, oh, that's a euphemism for you just

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Speaker 1: getting a royalty, And I'm saying, all right, called a royalty.

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Speaker 1: You know. My view is this this year, the NBA

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Speaker 1: will spend roughly eight billion dollars creating the NBA, I mean,

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Speaker 1: will generate around nine billion, and we spend about eight billions.

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Speaker 1: And my feeling is as the creators of the intellectual

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Speaker 1: property and the organization in which the burden of regulation

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Speaker 1: has been imposed on us by the states. I mean again,

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Speaker 1: this is you know that the Supreme Court did what

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Speaker 1: it did, and now states are doing what they're doing

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Speaker 1: legalizing sports betting. They are now imposing a set of

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Speaker 1: requirements on us in terms of how they expect us

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Speaker 1: to protect the integrity of the product. And and so

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Speaker 1: my view is we should get a fee, not off

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Speaker 1: the profits, because I don't want anyone to think in

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Speaker 1: any way that we're incentivized for a particular team to win,

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Speaker 1: or for a game to go, or for a particular score,

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Speaker 1: or for you know, uh, seven games instead of six

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Speaker 1: games or whatever else. But yes, I feel as a

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Speaker 1: business matter, we should share in the proceeds. How do

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Speaker 1: you get to be NBA commissioner. Really, um, do you?

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Speaker 1: I mean, did you grow up saying I want to

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Speaker 1: be NBA commissioner. I didn't grow wanting to be the

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Speaker 1: commission I don't even think I had any sense of

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Speaker 1: what to do. But you did not go to Duke

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Speaker 1: on a basketball schollege. I definitely didn't. And and I'm

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Speaker 1: pretty sure that when even when I went to law school,

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Speaker 1: I if somebody had asked me what the NBA commissioner did,

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Speaker 1: I would have said, he hands out he hands out

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Speaker 1: rings and you know, intense the schedule. I wouldn't really

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Speaker 1: have even understood the joke. You graduated from the Universityicago

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Speaker 1: law school, you clerk for a federal judge. Then you

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Speaker 1: went to Krevass Sway and more like a well known

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Speaker 1: all street firm. And then how did you go from

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Speaker 1: there to the NBA? Because a lot of young lawyers

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Speaker 1: were not happy practicing law. I would love to go

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Speaker 1: work for the commission in the NBA. I did you

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Speaker 1: do that? Honestly? I got incredibly lucky. I um. I

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Speaker 1: had worked at Kravat for about two years and decided

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Speaker 1: that I was working one at the time. One of

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Speaker 1: Crevass big clients was Time Warner and I was doing

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Speaker 1: working on a lot of media cases and at the

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Speaker 1: time for HBO in particular, and I became fascinated with

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Speaker 1: the media business. And uh, well, I was working on

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Speaker 1: a particular litigation. I was following what was happening in

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Speaker 1: sports media and and the move of sports to cable

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Speaker 1: television really you know. And it was Ted Turner in

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Speaker 1: essence through TVs and then T and T who was

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Speaker 1: leading that charge. And um, David Stern, Um then the commissioner,

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Speaker 1: was at the forefront of that movement. And David Stern

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Speaker 1: had worked at Proscouer in New York, which was the

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Speaker 1: same law firm that my father had worked at. And

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Speaker 1: I didn't know David, but I wrote him a letter

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Speaker 1: and asked him if he could give me some advice

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Speaker 1: about transitioning from law into a media job. At the time,

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Speaker 1: having written a letter, not even thinking about working at

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Speaker 1: the NBA or understanding what that that this was something

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Speaker 1: I could do at the NBA. UM, make a long

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Speaker 1: story short, he gave me. He you know, this is

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Speaker 1: pre email, he he. I wrote him a letter, an

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Speaker 1: old fashioned letter. His assistant called me a few weeks

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Speaker 1: later said he can see you on whatever date I

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Speaker 1: went over. I met with him for a half hour.

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Speaker 1: He gave me some advice which I didn't follow. And

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Speaker 1: and then about a month later he called me and

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Speaker 1: he said, what are you up to? And he said,

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Speaker 1: I have an idea, And after a series of meetings,

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Speaker 1: he hired me as his assistant. And was my first job.

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Speaker 1: You got a letter from a young lawyer today, what

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Speaker 1: would you pass it to our HR department? And UH,

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Speaker 1: all right? So David Stern, David Stern was a spectacular

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Speaker 1: commissioner by everybody's account. He did it for thirty years,

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Speaker 1: and I think he retired when he was like seventy two.

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Speaker 1: So were you when he was sixty five, sixty six,

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Speaker 1: sixty seven, sixty eight, sixty nine, seventy Did you say, David,

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Speaker 1: maybe I'm ready. Did you ever give him a little

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Speaker 1: push or how did that happen? Never? Never, never, And

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Speaker 1: and again I was being commissioner of the NBA. Is

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Speaker 1: my sixth job at the NBA. And so for five

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Speaker 1: of those jobs I worked directly for David and he

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Speaker 1: gave me enormous opportunities. A brilliant guy. Um I ended

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Speaker 1: up running an entity called NBA Entertainment I was interested

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Speaker 1: in the media business, sort of the television and media,

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Speaker 1: and then became the Internet arm of the NBA. Many

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Speaker 1: years later, I became the deputy commissioner of the NBA.

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Speaker 1: But ultimately, you know, David could recommend me, but it

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Speaker 1: required the team owners voting me. That's how the commissioners determined,

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Speaker 1: and he sort of set his own timeline for when

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Speaker 1: he was going to step down. And I think also

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Speaker 1: I was very fortunate that the league was in great

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Speaker 1: shape at that moment. I assume there could have been

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Speaker 1: a scenario where things weren't going so well. They might

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Speaker 1: have looked outside the NBA. But again, I owe a

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Speaker 1: lot to David, and I was very fortunate to be

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Speaker 1: in that job. So what do you think is the

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Speaker 1: leadership trait that you had that enabled Dava to you know,

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Speaker 1: think you deserve to be the commissioner? Um, I I think,

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Speaker 1: you know it nothing necessarily so unique to me. I

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Speaker 1: was willing to work very hard, and I did work

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Speaker 1: very hard over the years. I certainly loved the sport

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Speaker 1: of basketball. I think that much of my job now

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Speaker 1: is spent on media. It's the primary revenue source for

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Speaker 1: the NBA. So the fact that I developed an expertise

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Speaker 1: and media over the years was very important. I'd say,

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Speaker 1: I think while certainly being a lawyer isn't prerequisite to

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Speaker 1: being UM NBA commissioner, no different than being a lawyer,

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Speaker 1: I obviously in your job. But I think you and

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Speaker 1: I would say the same thing. I think I think

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Speaker 1: you'd say the same thing. Having gone to law school,

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Speaker 1: learning those skills has been very beneficial. Large part of

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Speaker 1: my job is being a professional negotiator, whether it's collective bargaining,

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Speaker 1: whether it's commercial relationships that we enter into. So I

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Speaker 1: think it was it was all of those skills. A

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Speaker 1: lot of your media today and this is contractor with

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Speaker 1: the other leagues as social media. You encourage your players

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Speaker 1: to be involved in social media. Uh. You encourage uh

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Speaker 1: Lebron James, your best known players to really be, if

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Speaker 1: not controversial, to have public views. Why do you? Why

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Speaker 1: do you do that? And it's been helpful to the NBA. Yeah,

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Speaker 1: I don't. I don't certainly don't encourage them to be controversial.

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Speaker 1: I encourage them to be genuine and earnest about their views,

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Speaker 1: and I make sure that they know that that within

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Speaker 1: certain boundaries. Frankly, I mean I think there's still more

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Speaker 1: around issues of decency, not particularly political speech, but I

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Speaker 1: want them to know that they should feel safe frankly

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Speaker 1: as NBA players, and I ultimately think it's in our

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Speaker 1: business interest to demonstrate to our fans in the greater community,

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Speaker 1: these are multidimensional people that earlier on in my career

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Speaker 1: at the NBA, I think when we had the biggest

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Speaker 1: issues as a league, and this is before was that

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Speaker 1: opportunity with social media for players to um have that

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Speaker 1: ability to to show who they are directly to fans.

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Speaker 1: They were portrayed in many cases as being one dimensional people.

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Speaker 1: They were just sort of just ballplayers, and people didn't understand,

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Speaker 1: you know, that where they were from and what they did,

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Speaker 1: what the other interests were, and or if they were

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Speaker 1: if they were from other countries. They were just from China.

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Speaker 1: There was no sense, well it's a big place there

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Speaker 1: from Beijing and this is what they did and this

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Speaker 1: is how they grew up. And I think social media

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Speaker 1: as a compliment to the traditional media which is really

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Speaker 1: helpful to allows them to show who they really are,

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Speaker 1: and I think it helps to engage fans and the

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Speaker 1: best player in the NBA. There's many great players in

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Speaker 1: the NBA, David, And now you have recently married a

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Speaker 1: couple of years ago, right, uh, four years ago, years ago.

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Speaker 1: And now you have a baby who is two years old,

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Speaker 1: little little old over too. And is she interested in basketball? Absolutely?

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Speaker 1: She watches. And that's why I got to make sure

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Speaker 1: the w n B a prosperous. She's my wife is tall.

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Speaker 1: I'm tall. She uh she watches basketball games with me.

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Speaker 1: And I may get some tips from our other coach

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Speaker 1: k here in the audience of and uh um. I

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Speaker 1: would love to coach her one day. It's sort of

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Speaker 1: I want she loves the game. I'd love her. So

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Speaker 1: you're gonna You're gonna stay in this position for the

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Speaker 1: foreseeable future. You're not going to go buy a team,

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Speaker 1: going to private equity, nothing like that. You're gonna stay.

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Speaker 1: No plans to go anywhere, right, Thank you very much

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Speaker 1: for an interesting consecutive