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NATIONAL BASKETBALL ASSOCIATION MEDIA CONFERENCE
October 6, 2014
COMMISSIONER SILVER: Thank you for being here.¬† I'm very excited to announce we are extending our partnerships with Time‑Warner and ESPN for another nine years.¬† These agreements will extend our existing partnerships through the 2024‑25 season, and will bring the total length of our relationships to 41 years with Turner, 23 years with ESPN and 17 years for NBA Digital with Turner.
I want to especially thank Bob Iger, the chairman and CEO of the Walt Disney Company; Jeff Bewkes, Time‑Warner chairman and CEO; John Martin, the chairman and CEO of Turner Broadcasting and of course my long‑time partners and close friend at ESPN and Turner Sports who led their respective teams in getting these extensions done, John, Skipper and David Levy.
I also want to recognize all of the owners on the Media Committee led by its chairman and Wizards owner, Ted Leonsis who I'm very happy to have with me here today.¬† The media members, the committee members combined with a group of team presidents on our media advisory committee representing 13 NBA teams and they all worked tirelessly flying to meetings all over the country making trips to both Atlanta and Bristol.
Those owners on the committee working with Ted included Clay Bennett of the Oklahoma City Thunder, Jim Dolan of the New York Knicks, Wyc Grousbeck of the Boston Celtics, Peter Holt of the San Antonio Spurs, Greg Miller of the Utah Jazz, Michael Reinsdorf of the Chicago Bulls, and our chairman of our NBA Board of Governors, Glen Taylor of the Minnesota Timberwolves.
I also want to thank the Team Advisory Committee, which included Tad Brown of the Houston Rockets, Len Komoroski of the Cleveland Cavaliers, Alex Martins of the Orlando Magic, Peter McLoughlin of the Portland Trail Blazers, Terdema Ussery of the Dallas Mavericks, and Eric Woolworth from the Miami Heat.
From the league office, I want to especially thank Bill Koenig, who is here in the front row this morning, our NBA president of global media distribution; and the dedicated and extraordinary narrowly hard working team he had including Danny Meiseles, who is also here this morning, David Denenberg, our senior vice president of global media distribution, and my deputy commissioner, Mark Tatum.
We decided to renew our agreements with Turner and Disney two years early because they have been terrific partners and they each share responsibility for the tremendous growth and popularity of our game. ¬†With these new agreements, our passionate fans will continue to benefit from the exceptional NBA coverage and programming provided by ABC, ESPN, TNT, NBA TV, along with their digital platforms.
A few highlights of these new agreements:¬† For the first time, ESPN will televise NBA D‑League and Summer League games and TNT will host an annual awards show, end‑of‑season awards show.
The WNBA has extended its relationship with ESPN through 2025.¬† And ESPN will launch an over‑the‑top offering in which the league will have an equity interest, and that over‑the‑top offering is going to be a new service designed to reach mobile consumers with NBA content and potentially other sports properties, as well.
Turner will offer an enhanced NBA content for multiple Turner platforms, and most significantly for its Bleacher Report.¬† To us these new agreements demonstrate the value of live sports in a DVR world, particularly NBA content, WNBA content and D‑League content, which continues to captivate fans on a nightly basis.
Lastly I'll just say, our game has never been better.¬† We can't wait till opening week.¬† Tuesday, October 28 is our opening night when we tip off a doubleheader on TNT with the Mavericks at the Spurs, followed by the Rockets at the Lakers.¬† And then on Wednesday night of that week, October 29, ESPN starts its NBA coverage with the Knicks playing at home against the Bulls followed by the Thunder traveling to Portland to play the Trail Blazers.
TNT Thursday night, October 30, has the Cavaliers hosting the Knicks and then the Thunder head to L.A. to play the Clippers.¬† And ESPN ends the first week with a Halloween doubleheader featuring the Cavs visiting the Bulls, and the Lakers against the Clippers.
I don't want to leave out NBA TV.¬† We also have three great games that weekend.¬† It's going to be an amazing week of NBA action, and none of us can wait.¬† It's been an exciting summer, a lot of player movement and great anticipation about this coming season.
We are thrilled to extend these highly successful relationships with our long time partners, and look forward to a new era of NBA basketball.¬† With that, I'd like to introduce Ted Leonsis, our chairman of the Media Committee.
TED LEONSIS:¬† Thank you, Adam.¬† Good morning, thank you very much to Adam Silver and Bill Koenig and the NBA league offices for their tireless and great work on getting these agreements reached.
There's never been a better time to be a basketball fan, be it of the NBA, WNBA or the D‑League.¬† There's never been a better time to be an owner of an NBA franchise or frankly any professional sports team.¬† We see the power of our content to bring together in realtime social settings very large and growing passionate audiences on a global basis.¬† The players are charismatic, and with our world‑class media partners, we know they will be presented in the right way.
This is an exciting day for all of us who have worked so diligently to extend these partnerships.¬† I want to personally give a huge thank‑you for the hard‑working team at Disney and Turner, led by John Skipper and David Levy.
David has great touch for us on production quality and has led all of our work in digital programming.¬† And John, I have to say personally, has done unbelievable work with us, also with the WNBA, and we'll talk about women's basketball and extending our reach to year‑round with both WNBA and the D‑League.
Also want to acknowledge Walt Disney's chairman and CEO Bob Iger, appreciate the time that he spent with Adam and I and the committee and Time‑Warner's chairman and CEO, Jeff Bewkes, for their company's commitment to the NBA and its fans.¬† Also need to recognize, as Adam noted, the fellow members of the Board of Governors, Media Committee, along with all of the team presidents.¬† This was a collective agreement and it was wonderful to hear so many voices with such diverse opinions.
Thirteen teams are represented between the two committees and they all did an outstanding job.¬† We have a remarkable group of owners in this league.¬† They are some of the smartest and most accomplished businessmen in the world and they represent markets of all sizes, many of whom have experience in the media business.¬† And those owners were able to bring their business acumen to these negotiations.
There's never been this level of commitment and involvement from the teams in this kind of process, and we are very proud of this collaborative result, which we think will benefit the league and its fans for years to come.¬† We're all very excited about the league's future.¬† This is a great way to launch another nine years of our partnership and on behalf of my fellow others, we can't wait to tip off the season.¬† Thank you very much.
DAVID LEVY:¬† On behalf of my Turner Broadcasting colleagues, I couldn't be happier than to be here today to announce the extension of our partnership with the NBA.
Turner and the NBA first started working together in 1984, and I have to say, it was a priority for our company to extend this important business relationship.¬† By the time this deal was completed, the NBA and Turner will be together for more than 40 years, and that's a long time for any relationship, let alone between a sports league and a media company.
This deal is significant for turner and locks in some of the most valuable and premium sports programming well into the next decade.¬† The NBA has been a consistent and strong property for us and the brand continues to deliver on so many levels.
When you look at it from a ratings perspective, the NBA on TNT holds nine of the Top‑10 programs airing on the network.¬† The ratings are consistently good during the regular season and even stronger during the playoffs.
You heard me talk about this many times about winning nights at television in key demos.¬† Well, that's what this property does, especially during the playoffs.¬† Each year the playoffs helps TNT win nights of television during the all‑important May sweeps.¬† With more playoff games on TNT than any other network, we look forward to that tradition to continue.
Deals of this nature do not get done without plenty of help and assistance.¬† I want to thank Adam Silver, Mark Tatum, Bill Koenig, Danny Meiseles and the staff at the NBA for their excellent work and for their partnership.
I'd also like to acknowledge two key individuals from Time‑Warner and Turner, Jeff Bewkes and John Martin for their continued support and their relationship.
I also want to recognize a few individuals from my team, including Lenny Daniels, John Cooper, Tina Shah, Christina Miller, Matt Hong and Valerie Immele.¬† I'm extremely proud of the effort they put into getting this deal done and I promise you it wouldn't have been done without them.
And Skip, congratulations on ESPN completing their deal, as well.¬† Look forward to continuing our partnership, as well.
The details of this partnership are really in the press release, so I don't want to spend too much time to go over all the deal points.¬† But this is a multi‑faceted package that includes television, digital and TV (ph) everywhere rights.¬† Additionally we'll have the ability for new ad sales enhancements, including the opportunity to run a new NBA Awards Show that Adam spoke about very briefly.
It's worth noting that TNT will have an additional 12 regular‑season games that will air on another night of the week other than Thursday.¬† The games will start the second half of the season and will feature marquis match‑ups of key teams that are looking to secure a postseason berth.
We are also proud that Turner will continue its business relationship with the NBA to manage the league's extensive digital portfolio including NBA TV, NBA.com and League Pass.¬† We have committed considerable resources to develop and expand the content across the portfolio, and that investment is paying off with the fans.
Finally, I want to take a moment and mention the rights we have secured for Bleacher Report.¬† Turner acquired Bleacher Report in 2012 and this brand has grown tremendously, especially with Millennials.¬† With the enhanced rights we have secured, it will allow us to provide NBA content to Bleacher Report's growing, engaged fan base around the NBA.
Again we are excited about our continuing relationship with the NBA and look forward to serving our mutual fans well into the next decade.¬† Thanks, and let me turn it back to Mike.
JOHN SKIPPER:¬† Thank you.¬† We're very well prepped for this meeting, including ‑‑ Mike Bass handed me something right before I got up here that suggested it would be on stage facing the audience.¬† So I appreciate that, Mike, because there's only a one if four chance I would have gotten that right.¬† (Laughter) but I did.¬† It makes a lot of difference.¬† You know, it's a lot better.¬† (Laughter).
I want to thank Ted and the owners for their participation.¬† Did you hear that they made the trip up to Bristol, Connecticut?¬† We appreciate that.
I want to congratulate David Levy and his team, they are a pleasure to have as co‑partners with the NBA and we enjoy working with them, and congratulations, David.¬† Did sound like they went above your and my head's though, with Jeff and Bob.¬† (Laughter).
And of course mostly I want to thank Adam and Bill and their team at the NBA who are a pleasure to work with, and we're thrilled to be in partnership with them for nine more years in addition to the two we still have.
And I have to thank my team at ESPN which did an exceptional job.¬† You guys don't know how many sleepless nights have been had over the last week, ten days, as people have stayed in the office.¬† We have a lot of people at ESPN, so I'm not going to try to name names because I will inevitably forget somebody.
We are thrilled with this deal and it continues ESPN's long‑stated strategy to invest in a portfolio of live rights.¬† And this is a key property for us given the ascendant nature of the league and allows us, along with the other rights that we hold, many of which we hold into the next century, to make sure that ESPN maintains its position in the sports media landscape.
And this deal, like all the deals we do, contemplates a broad swath of rights that allows us to build new businesses, to engage our fans on new technologies and new platforms, and if you look across all of our platforms, we have got a number of new rights in this deal.¬† ESPN Audio, we have more games on an exclusivenational ‑‑ we are the exclusive broadcast home for their radio rights.
ESPN International, we have significant new rights in Latin America, Australia and New Zealand and the Caribbean.¬† Deportes, the Hispanic initiative is crucial for both the NBA and ESPN.¬† We had our best year ever on ESPN Deportes in Spanish language; for ESPN our largest Hispanic audiences in English on ESPN ever on for the Finals last year between the Spurs and the Heat and we hope to build upon that.
And you heard Adam mentioned other NBA product that's important to us, the WNBA, the D‑League, the Summer League.¬† All of those things allow us to make a year‑round presentation of the NBA.¬† We acquired over 750 new studio hours that allow us to present pre‑draft, pre‑camps, pre‑trades, moves that the teams make and fans now care year‑round about the NBA and what is going on.¬† We can build on that.
We are thrilled with the position of the NBA right now.¬† They have ascendant stars, more competition than ever within the league.¬† We had our highest four rating years in the history of our relationship with the league on ESPN the last four years.¬† We believe we will build upon that with turner and with our friends at the NBA.
You heard Adam talk about the OTT, the over‑the‑top offering that we look forward to making with the team.¬† We have established a framework to do so.¬† It is part of our exploration to continue to serve fans where they are.
I know it will come up inevitably about what this means for the current pay television universe.¬† I would point out the preponderance of our deal is to invest in new product that goes on pay television, and that we continue to do so and we'll continue to do that while we explore new ways to reach fans.¬† There is no contradiction in continuing to enhance and buttress the current system while building new businesses and new ways to reach fans.¬† We think they are complementary, we applaud the NBA for being a very forward‑thinking league and helping us do that across all of our platforms.
So in summation, which it probably says somewhere on these pieces of paper; in summation, we are thrilled with this.¬† We are thrilled to remain partners with the league and look forward to the years between now and '24‑'25.¬† Thank you very much.
Q.¬† Since this was done so long before the previous deals were expired, who initiated the conversations to start doing this so early?
COMMISSIONER SILVER:¬† I'll start with that.¬† As we always say, I think we start negotiating the day after we finished our last deal and I think it's something we're always talking about ways to expand the relationship.
I think we began more formally negotiating in February of this year.¬† That's when we appointed both the owners Media Committee I mentioned earlier and the team presidents, and I would say we have been negotiating fairly intensively through February.¬† As I mentioned, included some field trips town to Atlanta so we could see their production facility and what they built out for NBA TV.¬† I wanted to make sure our owners were familiar with that.
We spent significant amount of time up at Bristol seeing their new digital facility.¬† And as John said, over the last several weeks, we literally have been going around the clock to finish these deals and we were determined to get them done before the season started.
JOHN SKIPPER:¬† I would point out they found the airport in Atlanta to be significantly more convenient than the airport in Bristol. (Laughter).
I would only say, I'm sure David would echo, we were never ambivalent about wanting to renew this deal.¬† We were anxious to get started as soon as possible.¬† You heard me say before that this is a key property for us in our aggregation of sports rights, and there was never any intention on our part not to renew this.
DAVID LEVY:¬† This is a foundation for us at Turner Boradcasting.¬† The NBA has been with us; this will be 40 years when this deal ends.¬† It's a priority are to us to get this deal done.
It wins of nights of television for us.¬† It helps our consumers.¬† It helps our cable operators and it helps, really, the advertising community, as well.¬† Priority for us and glad we got it done.
Q.¬† Can any of you talk about the complexity of what is the NBA's story in terms of development of character as far as what we have with LeBron, what we have with Kevin Durant; part of this deal I assume is based on how good the content itself is, not just the number of hours.¬† So can any one of you talk about just the idea of the complexity of characters that we have in the league, villains and guys that are good?
COMMISSIONER SILVER:¬† We have no villains but I'll‑‑ (laughter) I'll let these guys take a shot at it.
DAVID LEVY:¬† One thing about the NBA which really has built over the years is the fact that if you take a look at really on a market‑by‑market basis, you have a majority of teams now, not just one or two, but the majority of them can draw a rating every night, and that's because of the teams like Oklahoma City and Miami and Cleveland now that basically have really strong competition that we can put a game on Thursday night and draw a big, big number.
So we don't really look at it as individuals, each and every one, villains and not.¬† The teams themselves are drawing in big, big ways and it's about competition on the floor that truly helps us as well.
Sports programming in general is on the rise.¬† And what I mean by that, from a ratings perspective, it's probably the last, I would say, destination programming on television, appointment viewing.¬† And so if we can get a piece of this premium sports property and maintain it for the next nine years, for almost the next decade, it's something that we wanted to do.
But I would say that the league is continuing to grow.¬† Social media is going to help continue it to grow and that's what I think you're talking about, about the characters themselves.¬† I think the people are actually writing more about each and every player.¬† The players now are writing about themselves and using this new medium called social media to do so, and I think that will only enhance the value of the NBA and why we signed back up.
TED LEONSIS:¬† I think it's important to note from an ownership perspective, that it's a global and national deal.¬† But local is still obviously a big driver of what the league is all about, and we do have transcendent stars that cut across the world, but we didn't give up any rights locally and we protected each ownership's individual franchise.
So we see this being a really, really important deal that celebrates the power of this kind of programming.¬† As David mentioned, it's very unique to have convening social programming in this world where the steering wheel is in an individual's hand, and other than sports, there really is no more appointment viewing.¬† The game starts at 7:06, and fans have to be there but TV starts.
That we can convene large groups of audiences is very, very important, and from a sponsor's standpoint, they are very, very appreciative of that social, realtime kind of engagement that we bring to our media partners.
Q.¬† Do you guys think you would have paid more had this gone to market, and for Adam, why not let more bidders get involved?
JOHN SKIPPER:¬† You heard me say before:¬† We were not ambivalent about wanting to renew this.¬† It's impossible for me, of course to speak about whether it would have cost more if it went to market, although clearly made the calculation that we were uninterested in exploring that possibility.¬† So we did our deal now.
COMMISSIONER SILVER:¬† I'll just add, we had lots of committee discussions with owners, team presidents and then with our entire board about the appropriate timing for these deals, and we ultimately made a decision that this was the right time to go.
There's no question that there are other competitors of these two companies who are interested in our rights, Comcast and Fox, in particular.¬† We have extensive relationships with those companies; 17 of our teams are in business with Fox in the RSN business, eight or nine of our teams, depending on the Comcast/Time‑Warner cable merger, will be in business with Comcast.
And so we know them well.¬† We had discussions but not negotiations with them.¬† We also had a sense of where the emerging potential content acquirers are, the Googles, the Apples and companies like that.
So we ultimately made a decision that this was the right time to go.¬† I think these are extraordinarily healthy deals financially, and we hope our partners do exceedingly well under them.¬† So while I don't think we left any money on the table, we hope they will be very successful and we're confident that we maximized what our opportunity was in the marketplace.
Q.¬† When you decide to pay, as you are, a lot more for these rights than you are currently paying, do you do a spreadsheet that says, these extra rights are worth this; these extra games are worth that; how do you figure out that you're going to pay nearly three times as much as you're paying now and be able to justify it?
DAVID LEVY:¬† We can't go through the whole models of what we do, but I tell you this:¬† It will be meaningfully valuable to our company at the end of this deal, and we'll have a strong ROI when the end of this deal happens.¬† We don't go into any programming or sports rights without feeling that it will be strategically smart for our company to do.¬† So we believe it will be meaningful valuable at the end of the deal.
JOHN SKIPPER:¬† It remains clear that sports rights continue to be more and more valuable.
David said, and I agree, it's the only thing that you have to watch live and the only thing live you have to watch that you watch by appointment.
We also acquired a wide swath of rights so that we can build new business and continue to grow and drive results to the Walt Disney Company.¬† We are quite content that we have done an outstanding deal here.¬† We manage our business by looking at portfolio.
We don't look at an individual deal in isolation.¬† What matters for us is what the entire portfolio of sports rights is and how we could use that to grow and drive results, and this deal fits very nicely in that.
Q.¬† When a deal like this gets announced, there's a lot of curiosity about the business side for the league, in 2011, the assertion was that a lot of teams are losing money and now these are very large numbers coming in.¬† What are the implications for the profitability of all 30 teams and what do you think might be the implications for 2017 and the CBA?
COMMISSIONER SILVER:¬† Well, from a financial standpoint for the league, obviously the implications are very positive to have this additional money coming in.¬† In terms of its impact on the CBA our current deal provides that players receive roughly 50 to 51 percent off the top.
So a lion's share of this money will be paid directly to the players, so I think it bodes well in terms of the effectiveness of the current Collective Bargaining Agreement.
Having said that, as you mentioned, there is a potential re‑opener in three years, and I'm sure both sides will be studying the impacts of this new deal and seeking to ensure that it remains a fair deal for both sides.
Let me just add, too, that there are dramatic revenue sharing implications of a deal like this.¬† That's something, in fact, we are going to begin discussing this afternoon.¬† That's something handled by the NBA's planning committee.¬† Coincidentally we have a meeting this very afternoon in which we are going to begin looking at new models based on this additional money, and I'm sure those discussions will continue into the Board of Governors meeting.
Q.¬† With all of this new revenue coming in, does that suggest that all 30 teams are going to be profitable by the time we arrive at that decision point?
TED LEONSIS:¬† It's on a market‑by‑market basis.¬† There's so much that goes into profitability outside of what the players get paid:¬† Your building deal, your lease, what kind of debt do you have on the team and the like.
But certainly this is a deal that is significant enough that it shows the value enhancement for owning a team.¬† And I think that's a very, very positive to know that you're going to have this kind of additional revenues that you can model into your revenue and your cash over a nine‑year period.
I also want to say that the league has done a really, really great job of integrating what this would mean for salary cap, for debt capacity, for values of teams.¬† There isn't any part of the league, of revenue sharing, that isn't being touched by this.
And today really kicks off that new era.¬† But we have to remember the deal doesn't kick in for two more years.
Q.¬† I was curious why the league embraced and wanted a stake in the over‑the‑top offering and whether you discussed those rights with any of the emerging providers, Apple, Google, Netflix.¬† And for John, why you decided to do this first with the NBA, the OTT and whether you know what it looks like yet or it can launch before the 2016 season.
COMMISSIONER SILVER:¬† In terms of discussing those rights with some of the emerging providers, yes, we have.¬† It's an ongoing dialogue with the Silicon Valley‑based companies.
We have relationships with those companies, relatively small relationships, compared to the kind of deals that we have with these large media companies.¬† But we're a major factor in social media.¬† It's something that we study all the time and experiment with.
I think what came from those discussions was this notion that the marketplace is ready for a so‑called over‑the‑top offering; that there should be programming provided directly to mobile devices.¬† As David Levy said in his statements, there is a Millennial consumer out there who has a different approach to the traditional cable or satellite package.
But we think ultimately it will be supplemental.¬† We think there's a demand to get live games on mobile devices, but it will ultimately supplement the premium content that they are providing through cable and satellite.
TED LEONSIS:¬† I'd also add that this is such a global phenomena.¬† There's two and a half billion people around the world connected to the Internet, and less than 300 million Internet connections in the United States.
So this phenomenon for mobile really serving as your computer of choice around the world and more and more people subscribing to mobile, that we needed to take advantage of that fact outside of the growing realtime television footprint.
And so OTT, I think is here to stay.¬† We have been doing OTT for a long time with our partner at Turner.¬† They basically helped write the book for the industry and so I just think this is a natural evolution to our rights.
JOHN SKIPPER:¬† It's really a questioning of timing and the partner.¬† The NBA has a long‑standing tradition of being able to embrace new technology and work with us on creating new businesses and new products and providing us the rights to do that.
And as Adam said, the timing is kind of right.¬† There are enough broadband connections now and broadband homes; there's receptivity and there's quality of video distributed over broadband pipes and wireless platforms that it seemed like a good time and with the right partner.¬† And I'm trying to keep up with David who already has his over‑the‑top offering here.
DAVID LEVY:¬† I was going to say, this is nothing new.¬† The NBA has always been at the forefront.¬† And League Pass was over‑the‑top and it's been over‑the‑top as a partnership with us and building that property.¬† So this is just an extension and we are excited to have it as part of the portfolio.
TED LEONSIS:¬† Has anyone noticed that Skipper and Adam are starting to look alike?¬† (Laughter).
JOHN SKIPPER:¬† You are a handsome definitely.
COMMISSIONER SILVER:¬† I think you still go to a barber shop.¬† (Laughter).
Q.¬† Right now the national TV deal every year that comes out is pretty set in terms of, there's a set slate of games that we flow in July what it's going to be.¬† As part of this deal, is there going to be flex scheduling?¬† Is that something you guys would pursue?
DAVID LEVY:¬† Well, again, our Thursday night games are pretty much locked in as we go through the process of picking out the games with the league and figuring out what's best for Thursday nights.¬† And there's arena situations that you have to deal with.¬† But the 12 games, the incremental 12 games that we have, at the back end after the All‑Star Break, will be selective based on where we think the teams are heading into the postseason and what the opportunities are.¬† So I guess that would be our selective process on those back 12 games.
COMMISSIONER SILVER:¬† Let me just add, what this new deal does allow is for some additional flexibility on the Thursday night games and the Sunday afternoon games on ABC.¬† There used to for the most part be window exclusivity on Thursday night and Sunday afternoons as opposed to game exclusivity.
By allowing our teams to schedule other games on Thursday nights and Sundays, one, it allows them to flex into the best game, make a decision two or three weeks before the game which one they will carry on a national basis.¬† But also allows our teams to schedule additional games in a very compressed, tight schedule, which means especially for Sunday afternoons when many teams want to schedule family friendly games, special games to reach kids on Sunday afternoons, we'll be able to schedule far more games during that window now than we could in the past, and we appreciate that accommodation from both Turner and ESPN.
JOHN SKIPPER:¬† The league has always provided us some level of flexibility on the Wednesday and Friday nights when other games are played, and now we'll have that on Sunday night.¬† So the answer is yes.
Q.¬† How great of an impact can this deal have on the salary caps and subsequent player salaries?
COMMISSIONER SILVER:¬† Well, I'll start.¬† Under our current formula, again, where the players, depending on the amount of revenue that comes in, get 50 or 51 percent, in essence, of the gross revenue.¬† When this deal kicks in in 2016‑'17, it will lead to a substantial increase that year in the salary cap.
There is precedent for smoothing that increase in.¬† It's something that the NFL negotiated with its Players Association when it then entered into large increases to help teams in the planning process of in essence smoothing that money into the system.
I had a brief conversation with Michele Roberts, the new head of the union, on Friday to tell her that these new deals were coming.¬† And, in fact, we have a meeting later this afternoon to begin those discussions with the union as to their interest in creating more of a smoothing effect.¬† They will get their 51 percent of the money no matter what.¬† It's just a question of how it comes in in terms of the cap.
So it will have a profound effect and I'm sure that the union has already begun studying it just as we have been studying how it will affect our system team by team, and a lot of it is sort of happen stance on who happens to have a free agent, who has cap room, what class happens to be coming up.
As we all know, certain agents and players have been timing their contracts so that they would become free agents in '16‑'17, knowing that we were going to be entering into new television agreements.
TED LEONSIS:¬† We all have to serve someone, and when you own a team your first point of service is to the fan base and the community that you serve, and then to the players.
As Adam noted, I feel like I work for the players.¬† They are getting 51 percent, and we did a really, really good job for them and the rising ride will raise all boats, and it's one of the great things that makes the league so competitive.
We have great players, they are charismatic and the fans want to watch them and by being able to pay them more money and keep your free agents and go into free agency, I think it will make for a very exciting time for our fans in the out years.
Q.¬† How do you guys feel‑‑ I guess this question is probably for John, because Adam has talked about it and David has talked about it, what social media has become, the fact that someone is opening up their computer or on their iPad or mobile device, as the game starts, sits down and has that second screen and that's kind of been an automatic response.¬† How is that in the back of your head as you go into these negotiations and complete them?
JOHN SKIPPER:¬† Well, we regard it mostly as complementary and for the NBA, it's clearly a very social league given the age and multi‑ethnicity of the audience.
So that's one of the things that's attractive to us about the NBA is how engaged socially it is, how engaged their fans, their players are.¬† And allow me again to say, that we care a lot about the demographics of the league and it is one of the reasons it is ascendant; the fan base is very young, it's very multi‑ethnic and it helps us in drawing fans to our network.
THE MODERATOR:¬† Thank you everyone for coming today.
FastScripts Transcript by ASAP Sports