Speaker 1: The NBA's popularity seems to be hitting a new peak
Speaker 1: as ticket sales, revenues, and franchise value continue to rise.
Speaker 1: NBA Commissioner Adam Silver sat down with Carlisle Group co
Speaker 1: founder David Rubinstein for his Bloomberg television show Peer to
Speaker 1: Peer Conversations and spoke about the history of basketball and
Speaker 1: why it's so popular around the world. You have been
Speaker 1: the commissioner since two thousand and fourteen, and you had
Speaker 1: spent twenty two years at the NBA office before that,
Speaker 1: And before that you were a graduate of the two
Speaker 1: best schools to go to in combination, Duke University and
Speaker 1: the university's Cargo Law School, right, which you happen to
Speaker 1: go to, right, So you can't do any better than that.
Speaker 1: So let's just start with the NBA today and how
Speaker 1: it's doing. And honestly, since you've been the commissioner, the
Speaker 1: revenues are up, uh, ticket sales are up. The owner's
Speaker 1: value of their teams is up by about three times.
Speaker 1: So are you adequately paid for the job you're doing?
Speaker 1: Do you think today? Um, the NBA it seems to
Speaker 1: be at at its peak right now. It's very popular
Speaker 1: all over the world. Why do you think it is
Speaker 1: that NBA basketball is so popular around the world, whereas
Speaker 1: our Major League Baseball and professional football isn't quite as
Speaker 1: global sport. Well, I think part part of the reason
Speaker 1: is that it's been an Olympic sport since the nineteen thirties.
Speaker 1: I think that's made a big difference, and that it's
Speaker 1: a sport that has been played around the world. It
Speaker 1: was actually invented by Christian missionaries in you know, James
Speaker 1: Naismith was a Christian missionary, and the game was shortly
Speaker 1: after it was invent in Springfield, Massachusetts, brought to China,
Speaker 1: and so it's it's been global since its earliest days.
Speaker 1: And I think when you think of that the two
Speaker 1: most popular global sports, I don't think it's an accident
Speaker 1: that both involved round balls. One you kick and one
Speaker 1: you shoot use your hands. And I think there's almost
Speaker 1: something um evolution ary about it about round balls. And
Speaker 1: I think most people, even if you're not a basketball player,
Speaker 1: if you know, whether it's your you know, balling up
Speaker 1: paper and shooting it into a garbage can, or if
Speaker 1: your little kid I have I have a young daughter
Speaker 1: and she sees a ball, she she kicks it, or
Speaker 1: she picks it up and she throws it. So today,
Speaker 1: are there any more franchise than might be for sale?
Speaker 1: By the way, is there any not that I'm aware of?
Speaker 1: Not they're were okay, But some of the people that
Speaker 1: have bought these franchises have done extremely well. People bought
Speaker 1: I think that, like said, the seventies Sixers were brought
Speaker 1: a few years ago for three or four hundred million dollars,
Speaker 1: the Bucks for maybe four or five million dollars. And
Speaker 1: when Steve Bamber came in and paid two billion dollars
Speaker 1: for the Clippers, where all the other owners happy because
Speaker 1: it made their their team look more valuable or not? Yes,
Speaker 1: they were happy? And uh but and and since Steve
Speaker 1: bought the Clippers, two teams have sold for more than
Speaker 1: he paid, Um Houston Rockets and the Brooklyn Nets. So
Speaker 1: one of the most difficult things you had to do
Speaker 1: after you became the commissioner was to an effect banned
Speaker 1: the then owner of the l A Clippers. Was that
Speaker 1: a tough decision for you? Um? Yes, I mean I
Speaker 1: think people may not realize it, but he's the only
Speaker 1: owner who's ever permanently been banned from a sport. Um
Speaker 1: and it's it's difficult because I in essence worked for
Speaker 1: the owners. I worked for the owners collectively. I don't
Speaker 1: work for any one owner, but my job is to
Speaker 1: do what's in the best inches of the league. And
Speaker 1: as people here may remember that the tape that came out,
Speaker 1: the recording for which he was banned, came out, Um,
Speaker 1: you know, in the middle of the night l a time,
Speaker 1: so I was in New York, so I didn't hear
Speaker 1: until Saturday morning, and he was banned on Tuesday. So
Speaker 1: I mean, he received NBA style due process. But I
Speaker 1: think in most walks of life, people you know, to
Speaker 1: think that from beginning to end that was four days
Speaker 1: as was remarkable. I think he paid be less than
Speaker 1: a hundred million dollars when he bought the team many
Speaker 1: many years earlier, was in San Diego. Then, I know
Speaker 1: that's the way you look at it. That but he
Speaker 1: made a big profit, I know. So my view is, yeah,
Speaker 1: I don't think frankly, from his standpoint, he's an extraordinarily
Speaker 1: wealthy guy, and um, I don't think his reaction was,
Speaker 1: look how much money I just made the team was
Speaker 1: worth that regardless of what the family didn't call you
Speaker 1: up and say thank you for doing that. Nothing they
Speaker 1: didn't do that, Okay, So but I understand that's how
Speaker 1: you look at it. Private equity. So one of the
Speaker 1: controversial things in college basketball has been the so called
Speaker 1: one and done situation where college are high school players
Speaker 1: go to college for one year more or less, and
Speaker 1: then they get drafted into the NBA. UM are you
Speaker 1: in favor of continuing that one and done policy? And
Speaker 1: what would you change it to if you did change it.
Speaker 1: It's it's interesting when so when I first became commissioner
Speaker 1: UM five years ago, I announced that I thought the
Speaker 1: minimum age for entering the NBA should be twenty instead
Speaker 1: of nineteen. Roughly eleven years ago we changed it from
Speaker 1: eighteen to nineteen, and that has to be collectively bargained
Speaker 1: with our players Association. So that's an area where I
Speaker 1: don't have the unial lateral right to make a decision.
Speaker 1: I'd say, then, once I became commissioner and and and
Speaker 1: became more aware of how the one and done situation
Speaker 1: was actually worked in operations, sort of how the recruiting worked.
Speaker 1: UM then there's obviously been some very high profile um
Speaker 1: UH criminal proceedings around sort of college sports right now.
Speaker 1: And then in the middle of that, Um Mark Emritt,
Speaker 1: the head of the n C Double A, appointed a
Speaker 1: commission that included what was chaired by Conna Lisa Rice
Speaker 1: um to look at lots of issues involving college sports,
Speaker 1: but particularly to focus on the one and done situation.
Speaker 1: And ultimately, Conno Lisa Rice and her commission recommended to
Speaker 1: the NBA and our Players Association that we returned to
Speaker 1: the eighteen year old entry age. And I would say
Speaker 1: that that had a huge impact on me. That together
Speaker 1: with a better understanding of what is happening to these
Speaker 1: top players in that it's it's hard even to see
Speaker 1: it as a full year. In many cases in college,
Speaker 1: most of them leave once the tournament is over. I've
Speaker 1: changed my position eighteen. The Players Association has historically been
Speaker 1: that it should be eighteen, but there are a bunch
Speaker 1: of issues that need to be worked through between us
Speaker 1: and the Players Association, so it's something we're an active discussion.
Speaker 1: It's a few years away. I think also, if we
Speaker 1: were to make the change, I think the first season
Speaker 1: that would make sense to make that change for is
Speaker 1: two thousand twenty two, in part because that's the current
Speaker 1: class that's just an essence finished their freshman year in
Speaker 1: high school, and the cohort is pretty well known. I mean,
Speaker 1: lots of these young men may move from you know,
Speaker 1: tenth projected pick to third projected pick. But but there
Speaker 1: aren't that many surprises in the cohort. And so if
Speaker 1: there was no longer an issue of eligibility because remember now,
Speaker 1: because of n C double n A regulations, we can't
Speaker 1: be involved with that cohort of players right now. So
Speaker 1: if the rule were to change, we and our Players Association,
Speaker 1: USA Basketball other groups would work much more directly with
Speaker 1: those young players to prepare them for the NBA eight
Speaker 1: I mean the one and done after they finished the
Speaker 1: n s A tournament. They're not finishing their classes. I
Speaker 1: don't want to say that's the case for all schools, um,
Speaker 1: but it's the case with many of those players, understandably
Speaker 1: because um the moment they fin look I I think
Speaker 1: that's the whole hypocrisy in a way of the one
Speaker 1: and done program. Those top players are being recruited by
Speaker 1: those schools as the best path to being a top
Speaker 1: draft pick in the NBA. So once they once they
Speaker 1: finish their collegiate career, after one season, they are fully
Speaker 1: focused on preparing for the NBA draft. So whether or
Speaker 1: not they're still going to some classes. And remember, I
Speaker 1: mean just to put it in context, for a player
Speaker 1: into for a top player coming into the NBA, let's
Speaker 1: say a top ten pick that's going to come into
Speaker 1: next year's draft. Given our pay scale now, and assuming
Speaker 1: the NBA continues to prosper, and assuming that player stays
Speaker 1: healthy and and plays around where the expectations that player
Speaker 1: will play, that player, justin salary alone is going to
Speaker 1: make well over two hundred million dollars. So um, So
Speaker 1: this this the steaks. It's it's hard. It's hard. I
Speaker 1: think if you were that parent or guardian to say
Speaker 1: to that player it's more important that you go to
Speaker 1: three more classes as opposed to preparing for such a
Speaker 1: critically important decision. I think it's it. And I think
Speaker 1: that's where the hypocrisy lies. Your referees are. They seem
Speaker 1: to be in pretty good shape there. Sometimes they're you know,
Speaker 1: not twenty years old, but they seem to be. You
Speaker 1: require them to exercise a lot. They don't seem that
Speaker 1: pot bellies. They seem to be really good shape. They
Speaker 1: I hope that's not the best you can say about them.
Speaker 1: They don't have pot bellies. Well, they seem to be
Speaker 1: for guys that are age, they'rething to being pretty good shape.
Speaker 1: But I think that are there women referees? Yeah, absolutely,
Speaker 1: by the way that we have UM. We have three
Speaker 1: female referees right now, and I think it's an area
Speaker 1: frankly where I've acknowledged that. I'm not sure how it
Speaker 1: was that it remained so male dominated for so long,
Speaker 1: because it's an area the game where UM, physically, certainly
Speaker 1: there's no benefit to being a man as opposed to
Speaker 1: a woman when it comes to refereeing. And in fact,
Speaker 1: you know, we're now in terms of the last group
Speaker 1: of referees that we hired into the league, and they
Speaker 1: came from our development league is are is called our
Speaker 1: g league. UM. Two of the last five officials that
Speaker 1: came in where women and the and the goal is
Speaker 1: going forward it should be roughly fifty new officials entering
Speaker 1: the league. OK. So let's talk about UM. One serious
Speaker 1: issue that I didn't really address before. You've said that
Speaker 1: players have UM depression and melancholy and they feel isolated.
Speaker 1: Can you explain, you know, somebody's making fifty million dollars
Speaker 1: a year. They seem to be well respected by everybody.
Speaker 1: Why are they so depressed and isolated? Well, and in
Speaker 1: all seriousness, what I've said is that when I in
Speaker 1: talking about our players, I said they are no more
Speaker 1: immune from mental illness than any other sector of our society.
Speaker 1: And I think I'm sure people in this room no
Speaker 1: families firsthand that regardless of how much money you're making,
Speaker 1: or your position in life or your family, that in
Speaker 1: some cases it's chemical, in some cases environmental, but that
Speaker 1: it cuts across, you know, alsocio economic groups. And and
Speaker 1: what's changing though in our league, and and again I
Speaker 1: think this is it's it's wonderful that that players are
Speaker 1: now willing to talk about these things. We had too
Speaker 1: high profile players the Margin Rosen when he was still
Speaker 1: with the Raptors and Kevin Love on the Cleveland Cavaliers
Speaker 1: who came out publicly and said they were suffering from depression,
Speaker 1: had issue is with anxiety, you know, and I know
Speaker 1: firsthand they weren't the first players in our league suffering
Speaker 1: with issues like those, but they were certainly the first
Speaker 1: players while they were current players in the NBA to
Speaker 1: talk about it and I think what what And I've
Speaker 1: heard from so many mental health professionals that when it
Speaker 1: really goes to the heart of your question, when people
Speaker 1: who are perceived as having everything, and then especially in
Speaker 1: something in professional sports where there's a certain machoism associated
Speaker 1: with it and and a certain perceived toughness that and
Speaker 1: I think that the stigma historically has been suck it
Speaker 1: up right, and you're not tough if if if you're
Speaker 1: dealing with something that's not physical and where you know
Speaker 1: when originally are our junior basketball programs were literally just
Speaker 1: about basketball skills like keep your elbow in and shoot
Speaker 1: this way and this is how you play defense. And
Speaker 1: then we morphed those programs into more about physical fitness
Speaker 1: in addition to basketball skills. And now in the last
Speaker 1: year we've added a mental wellness component. It's been incredibly
Speaker 1: well received by people throughout the country you know who who,
Speaker 1: because I know from the letters we get and from
Speaker 1: the mental health professionals we work with that kids are
Speaker 1: now coming in and saying, Wow, this NBA player is
Speaker 1: able to you know, raise their hand and say, you know,
Speaker 1: I'm suffering, I need help. You know, regular kids feel
Speaker 1: comfortable doing that as well, if you are, I suppose um.
Speaker 1: But the Supreme Court has said that sports betting is
Speaker 1: more or less going to be legal. Essentially it's legal.
Speaker 1: So are you worried that in the nineteen fifties and
Speaker 1: so on the college sports we had sports betting shaving
Speaker 1: people were because of the odds are related to the
Speaker 1: point spread, are you worried about that in the NBA.
Speaker 1: I'm always worried that we could have a scandal of
Speaker 1: any kind, certain certainly one involving sports betting. I think
Speaker 1: that we are better off with a regular, regulated betting
Speaker 1: framework than keeping it all underground and illegal. And I
Speaker 1: know firsthand as the league that you know it's the
Speaker 1: Supreme Court decision has only been within the last year,
Speaker 1: and now something like eight states have now legalized sports betting.
Speaker 1: Our preference would be that there would be a consistent
Speaker 1: federal framework. Because of your league, and you're potentially dealing
Speaker 1: with fifty different states and all their different requirements, it
Speaker 1: becomes a huge burden for the business and it's also
Speaker 1: a bit of a race to the bottom among the
Speaker 1: states sometimes from a regulatory standpoint. But putting that aside,
Speaker 1: in terms of our concern that like any public market.
Speaker 1: Just if you think of NASDAC or New York Stock Exchange.
Speaker 1: Part of their ability to to ferret out illegal activities
Speaker 1: from the algorithms that that show when there's um deviations,
Speaker 1: that that that caused their computers to to to you know,
Speaker 1: issue red flags and say something aberational has happened here.
Speaker 1: When everything is illegal, other than having in essence tipping
Speaker 1: services and relationships, we can't know those things. So so
Speaker 1: I think it's better that it be transparent, regulated, you know,
Speaker 1: and controlled and authenticated. And this way also people are
Speaker 1: betting with their credit cards, so you know who they are.
Speaker 1: And there's it's been not only legal and obviously the
Speaker 1: state of Nevada for a long time, but for decades
Speaker 1: in Europe. And I've learned a lot from our counterparts
Speaker 1: soccer leagues because they're they've worked and lived in regulated
Speaker 1: betting frameworks for a long time, and they have much
Speaker 1: better controls than we would. You like to own a
Speaker 1: piece of the betting profits in the league, not the profits.
Speaker 1: I think our proposal is um. I mean, it's been
Speaker 1: a bit controversial, but you know, we've proposed that we
Speaker 1: received something that that I've called an integrity fee and
Speaker 1: some people said, oh, that's a euphemism for you just
Speaker 1: getting a royalty, And I'm saying, all right, called a royalty.
Speaker 1: You know. My view is this this year, the NBA
Speaker 1: will spend roughly eight billion dollars creating the NBA, I mean,
Speaker 1: will generate around nine billion, and we spend about eight billions.
Speaker 1: And my feeling is as the creators of the intellectual
Speaker 1: property and the organization in which the burden of regulation
Speaker 1: has been imposed on us by the states. I mean again,
Speaker 1: this is you know that the Supreme Court did what
Speaker 1: it did, and now states are doing what they're doing
Speaker 1: legalizing sports betting. They are now imposing a set of
Speaker 1: requirements on us in terms of how they expect us
Speaker 1: to protect the integrity of the product. And and so
Speaker 1: my view is we should get a fee, not off
Speaker 1: the profits, because I don't want anyone to think in
Speaker 1: any way that we're incentivized for a particular team to win,
Speaker 1: or for a game to go, or for a particular score,
Speaker 1: or for you know, uh, seven games instead of six
Speaker 1: games or whatever else. But yes, I feel as a
Speaker 1: business matter, we should share in the proceeds. How do
Speaker 1: you get to be NBA commissioner. Really, um, do you?
Speaker 1: I mean, did you grow up saying I want to
Speaker 1: be NBA commissioner. I didn't grow wanting to be the
Speaker 1: commission I don't even think I had any sense of
Speaker 1: what to do. But you did not go to Duke
Speaker 1: on a basketball schollege. I definitely didn't. And and I'm
Speaker 1: pretty sure that when even when I went to law school,
Speaker 1: I if somebody had asked me what the NBA commissioner did,
Speaker 1: I would have said, he hands out he hands out
Speaker 1: rings and you know, intense the schedule. I wouldn't really
Speaker 1: have even understood the joke. You graduated from the Universityicago
Speaker 1: law school, you clerk for a federal judge. Then you
Speaker 1: went to Krevass Sway and more like a well known
Speaker 1: all street firm. And then how did you go from
Speaker 1: there to the NBA? Because a lot of young lawyers
Speaker 1: were not happy practicing law. I would love to go
Speaker 1: work for the commission in the NBA. I did you
Speaker 1: do that? Honestly? I got incredibly lucky. I um. I
Speaker 1: had worked at Kravat for about two years and decided
Speaker 1: that I was working one at the time. One of
Speaker 1: Crevass big clients was Time Warner and I was doing
Speaker 1: working on a lot of media cases and at the
Speaker 1: time for HBO in particular, and I became fascinated with
Speaker 1: the media business. And uh, well, I was working on
Speaker 1: a particular litigation. I was following what was happening in
Speaker 1: sports media and and the move of sports to cable
Speaker 1: television really you know. And it was Ted Turner in
Speaker 1: essence through TVs and then T and T who was
Speaker 1: leading that charge. And um, David Stern, Um then the commissioner,
Speaker 1: was at the forefront of that movement. And David Stern
Speaker 1: had worked at Proscouer in New York, which was the
Speaker 1: same law firm that my father had worked at. And
Speaker 1: I didn't know David, but I wrote him a letter
Speaker 1: and asked him if he could give me some advice
Speaker 1: about transitioning from law into a media job. At the time,
Speaker 1: having written a letter, not even thinking about working at
Speaker 1: the NBA or understanding what that that this was something
Speaker 1: I could do at the NBA. UM, make a long
Speaker 1: story short, he gave me. He you know, this is
Speaker 1: pre email, he he. I wrote him a letter, an
Speaker 1: old fashioned letter. His assistant called me a few weeks
Speaker 1: later said he can see you on whatever date I
Speaker 1: went over. I met with him for a half hour.
Speaker 1: He gave me some advice which I didn't follow. And
Speaker 1: and then about a month later he called me and
Speaker 1: he said, what are you up to? And he said,
Speaker 1: I have an idea, And after a series of meetings,
Speaker 1: he hired me as his assistant. And was my first job.
Speaker 1: You got a letter from a young lawyer today, what
Speaker 1: would you pass it to our HR department? And UH,
Speaker 1: all right? So David Stern, David Stern was a spectacular
Speaker 1: commissioner by everybody's account. He did it for thirty years,
Speaker 1: and I think he retired when he was like seventy two.
Speaker 1: So were you when he was sixty five, sixty six,
Speaker 1: sixty seven, sixty eight, sixty nine, seventy Did you say, David,
Speaker 1: maybe I'm ready. Did you ever give him a little
Speaker 1: push or how did that happen? Never? Never, never, And
Speaker 1: and again I was being commissioner of the NBA. Is
Speaker 1: my sixth job at the NBA. And so for five
Speaker 1: of those jobs I worked directly for David and he
Speaker 1: gave me enormous opportunities. A brilliant guy. Um I ended
Speaker 1: up running an entity called NBA Entertainment I was interested
Speaker 1: in the media business, sort of the television and media,
Speaker 1: and then became the Internet arm of the NBA. Many
Speaker 1: years later, I became the deputy commissioner of the NBA.
Speaker 1: But ultimately, you know, David could recommend me, but it
Speaker 1: required the team owners voting me. That's how the commissioners determined,
Speaker 1: and he sort of set his own timeline for when
Speaker 1: he was going to step down. And I think also
Speaker 1: I was very fortunate that the league was in great
Speaker 1: shape at that moment. I assume there could have been
Speaker 1: a scenario where things weren't going so well. They might
Speaker 1: have looked outside the NBA. But again, I owe a
Speaker 1: lot to David, and I was very fortunate to be
Speaker 1: in that job. So what do you think is the
Speaker 1: leadership trait that you had that enabled Dava to you know,
Speaker 1: think you deserve to be the commissioner? Um, I I think,
Speaker 1: you know it nothing necessarily so unique to me. I
Speaker 1: was willing to work very hard, and I did work
Speaker 1: very hard over the years. I certainly loved the sport
Speaker 1: of basketball. I think that much of my job now
Speaker 1: is spent on media. It's the primary revenue source for
Speaker 1: the NBA. So the fact that I developed an expertise
Speaker 1: and media over the years was very important. I'd say,
Speaker 1: I think while certainly being a lawyer isn't prerequisite to
Speaker 1: being UM NBA commissioner, no different than being a lawyer,
Speaker 1: I obviously in your job. But I think you and
Speaker 1: I would say the same thing. I think I think
Speaker 1: you'd say the same thing. Having gone to law school,
Speaker 1: learning those skills has been very beneficial. Large part of
Speaker 1: my job is being a professional negotiator, whether it's collective bargaining,
Speaker 1: whether it's commercial relationships that we enter into. So I
Speaker 1: think it was it was all of those skills. A
Speaker 1: lot of your media today and this is contractor with
Speaker 1: the other leagues as social media. You encourage your players
Speaker 1: to be involved in social media. Uh. You encourage uh
Speaker 1: Lebron James, your best known players to really be, if
Speaker 1: not controversial, to have public views. Why do you? Why
Speaker 1: do you do that? And it's been helpful to the NBA. Yeah,
Speaker 1: I don't. I don't certainly don't encourage them to be controversial.
Speaker 1: I encourage them to be genuine and earnest about their views,
Speaker 1: and I make sure that they know that that within
Speaker 1: certain boundaries. Frankly, I mean I think there's still more
Speaker 1: around issues of decency, not particularly political speech, but I
Speaker 1: want them to know that they should feel safe frankly
Speaker 1: as NBA players, and I ultimately think it's in our
Speaker 1: business interest to demonstrate to our fans in the greater community,
Speaker 1: these are multidimensional people that earlier on in my career
Speaker 1: at the NBA, I think when we had the biggest
Speaker 1: issues as a league, and this is before was that
Speaker 1: opportunity with social media for players to um have that
Speaker 1: ability to to show who they are directly to fans.
Speaker 1: They were portrayed in many cases as being one dimensional people.
Speaker 1: They were just sort of just ballplayers, and people didn't understand,
Speaker 1: you know, that where they were from and what they did,
Speaker 1: what the other interests were, and or if they were
Speaker 1: if they were from other countries. They were just from China.
Speaker 1: There was no sense, well it's a big place there
Speaker 1: from Beijing and this is what they did and this
Speaker 1: is how they grew up. And I think social media
Speaker 1: as a compliment to the traditional media which is really
Speaker 1: helpful to allows them to show who they really are,
Speaker 1: and I think it helps to engage fans and the
Speaker 1: best player in the NBA. There's many great players in
Speaker 1: the NBA, David, And now you have recently married a
Speaker 1: couple of years ago, right, uh, four years ago, years ago.
Speaker 1: And now you have a baby who is two years old,
Speaker 1: little little old over too. And is she interested in basketball? Absolutely?
Speaker 1: She watches. And that's why I got to make sure
Speaker 1: the w n B a prosperous. She's my wife is tall.
Speaker 1: I'm tall. She uh she watches basketball games with me.
Speaker 1: And I may get some tips from our other coach
Speaker 1: k here in the audience of and uh um. I
Speaker 1: would love to coach her one day. It's sort of
Speaker 1: I want she loves the game. I'd love her. So
Speaker 1: you're gonna You're gonna stay in this position for the
Speaker 1: foreseeable future. You're not going to go buy a team,
Speaker 1: going to private equity, nothing like that. You're gonna stay.
Speaker 1: No plans to go anywhere, right, Thank you very much
Speaker 1: for an interesting consecutive