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April 15, 2016

Adam Silver

New York, New York

ADAM SILVER: I appreciate you all being here. Of course we had a storybook ending to one of our greatest seasons ever. I think the numbers 73 and 60 will be part of the permanent history of the NBA, and it capped just an extraordinary season of just fabulous competition. As you know, I've been with the league for a long time, and I can't remember when we've had such engagement across the board, so many interesting teams, and as a result we had record attendance this year. We had a record number of season-ticket holders. Ratings were up across all of our networks. We created a social media community that has now over a billion people on a global basis, and that sort of was the tone in which we went into our Board of Governors meetings.

I think there was just a sense throughout the room that the league was in great shape, that our collective bargaining agreement is working, to the extent that we're seeing the desired competitive impact. I think from a business standpoint, we're seeing our business is good and is continuing to get better.

From that standpoint, we put out an announcement earlier today that the board approved these new sponsorship patches on our jerseys. These patches are roughly, if I were wearing one, it would be right here, about two and a half inches by two and a half inches are the new rules. This will not go into effect the next season but the season after next, the '17-18 season, and that is the first season in which Nike will be our official uniform provider.

As you may know now, we don't have the manufacturer's logo on our jerseys, so that will begin in '17-18, as well. For those teams that choose to sell the sponsorship patch, it'll be here, sort of on the left front of the uniform, and the Nike swoosh will be on the right. The Nike swoosh will be on all the uniforms with the exception of the Charlotte Hornets', where because their owner happens to have his own brand, which is part of Nike brand Jordan, it is likely we're in discussions that brand Jordan will be represented on Charlotte's uniforms. But again, not for next season but the season after next.

I'm looking forward to really just a fantastic playoffs. They've been widely anticipated. I think if they're anything like the regular season, we're going to see some fantastic competition. And so with that, I'm happy to answer any questions.

Q. The league about a month and a half ago or so put out a statement regarding the All-Star Game in Charlotte. What was the topic of discussion about the All-Star Game for 2017, and are there circumstances in which the All-Star Game would be moved, and what are those circumstances, and is the status quo good enough to keep the game there?
ADAM SILVER: So we did discuss the North Carolina statute at our owners' meeting, and let me begin by saying there's a long track record in this league of being in the forefront on issues impacting human rights and discrimination, and of course this league, and I think I speak for all leagues, is against discrimination in any form.

There were no votes taken in the room, but it was unanimous among our owners that we stand united being against any form of discrimination for any group in our society.

The law as it now stands in North Carolina is problematic for the league. There was no discussion of moving the All-Star Game. What the view in the room was, we should be working toward change in North Carolina.

I have been working very closely with the Charlotte Hornets, with Fred Whitfield, who's the president of the team, and together with ownership down there, to seek to effect change in North Carolina.

I would say it's a complicated issue for the league because of course with the situation in North Carolina is that the city of Charlotte passed an ordinance, and that ordinance was in essence overturned by the state of North Carolina, so this is an intra-North Carolina dispute. I would say I'm very familiar with the state of North Carolina. I went to college in North Carolina. We do a lot of business in North Carolina through the Charlotte Hornets, and I have great faith in the people of North Carolina. And I think that the best role for the league to play here is through constructive engagement toward change, not setting deadlines, not making ultimatums, but working with the private sector and the government to effect change in North Carolina.

You know, let me add that one of the things that makes this issue so complicated for us is that we recognize we don't live in North Carolina, and we do business not just throughout the United States but across the globe. While we want to make sure we operate in a non-discriminatory environment, we also have to be respectful of the people of North Carolina. Let me say, my concern here is that it would be easy in a way to grandstand here and announce we are moving the All-Star Game, even though that game is not scheduled to take place for 10 months.

The issue for us, and maybe this is different than where some of the other businesses find themselves in North Carolina, is that we have a team in North Carolina, and that distinction, for example, between the All-Star Game and the regular operation of a team is not clear to me. I mean, for example, we have a playoff game in Charlotte, North Carolina, in roughly a week from now, and I'm not sure what statement we would be saying about our team, we'd be making about our team in North Carolina, if we now announced that the All-Star Game would not take place in North Carolina but our team continued to operate there.

I think we as a league are in the best position to effect change by working with the government, by working with the private sector, and I'll say over the last few weeks, I'm not going to be specific, but I've talked to many people in government, outside of government in North Carolina, and the view is there is a constructive role for the NBA to play. I think that if we were to announce that we were moving our All-Star Game now, first of all, I'm not sure what incentive would be left for the legislatures in North Carolina to change the law if we announced that we were moving our game. And number two, I think sports leagues play a unique role in our society. We're not just like any other business, and I think people look to sports, look to the NBA in particular to set a standard, to set a tone, and I think part of that tone is that we have to listen.

We have to understand all perspectives here, and as Governor McCrory has said, I think there's enormous misunderstanding about this law. I would say I also believe there's enormous misunderstanding here about this law. I frankly am not even sure I understand the genesis of this law. I don't understand why the legislature felt the need for this law. And I would say I'm very concerned about singling out any minority group, in this case minority groups based on sexual orientation or gender identification.

The league believes that these groups need to be protected, but again, I think the right way to work to the proper resolution here is for the league to remain engaged in the conversation rather than setting ultimatums or announcing we're not going to play our All-Star Game in Charlotte.

Q. Just to clarify quick before my question, does that mean that there are no plans to move the game at all, or is it still possible that down the road if things don't change, that could still happen?
ADAM SILVER: Where we find ourselves right now is that the current state of the law is problematic for the league. I mean, that's nothing new. We said it the day after the law was passed.

But we're not making any announcements now. As I said, I think we can be most constructive by working with the business community and working with the elected officials both of Charlotte and North Carolina to effect change.

Q. And you mentioned during your opening statement about the state of the CBA, how it seems to be working. What is the status of the negotiations at this point with the players' union?
ADAM SILVER: The status is that we have ongoing discussions with both the executive committee of the Players' Association and the staff, in essence of the union, and from our standpoint, those discussions have been constructive, and I remain optimistic.

I think, as I said, the league is in great shape. I believe that that's how the players see things, as well. I think we all understand what's at stake when it comes to collective bargaining, and there seems to be a real commitment in the room, when we've sat across from the union officials and their executive board, that we all should just bear down, work behind closed doors and do whatever is necessary to ensure that ultimately we of course miss no games but that there's no disruption whatsoever in our season.

Q. Adam, coincidentally, the owner of the Charlotte team has a fairly famous quote attributed to him in NBA history that "Republicans buy sneakers, too." How do you think the Governors go about the approach of weighing the commerce and business of the league with any social role because of the high-profile nature?
ADAM SILVER: It's a good question, and I think for our governors, our owners who are in the room, I think they were balancing all those factors. One, as I said initially after that law was passed, this is about something much bigger than the NBA, and even if the NBA were to move in essence blindly forward and say, "We'll play our All-Star Game regardless of the state of the law in North Carolina," we're impacted by the entertainment community because of the performers that appear at our All-Star Game. We have hundreds of vendors that supply services for us around the All-Star Game. We have thousands of guests who we anticipate coming to North Carolina for our All-Star Game. And I've heard from many of those constituents, many of those -- the CEOs of those companies have already been outspoken about this law.

So I think that from a business standpoint, there was a discussion, of course, about our ability to hold this game, regardless of sort of what our historical position has been on discrimination. But now putting aside business issues completely, as I said earlier, I think there is a special place for the NBA in these discussions. There's a long record in this league of speaking out where we see discrimination.

I think that many owners in the room took the opportunity to say that we stand for something much bigger than the game, that this is not about business, that there is an appropriate role for us to play, that there's an appropriate voice for us to have in these conversations, and that we can be a force to work toward constructive change.

Again, as an outsider to North Carolina right now, the one place where I know I agree with the governor is that I think there is enormous misunderstanding about this law. I think that when the legislature meets again later this month, and as I understand it, they have a session that begins April 25th, and I think that when things settle down and legislators together with the governor are able to think through the implications of this law, the impact that it potentially can have on minority groups in their state, I think they will see clear to a change in the law.

I'm hopeful they will. And as I said, if the NBA and my colleagues and our owners can be helpful to that process, we stand ready. And I do think that's an appropriate role for us to take.

Q. Can you tell us a little bit more about the stipulations on the jerseys such as has to be a team or league partner, whether there is a TV money tie-in requirement, and categories that cannot be touched?
ADAM SILVER: I'm not going to go into too many of the specifics, and we are in essence formulating guidelines for our teams. But the notion here is that to the extent possible, the team should be in control of this asset, that the idea here was this is -- one, it should be a team's decision whether or not they want to place a logo on their jersey, and their decision how they want to connect it to a current team partner, in some cases, and I've already heard from some owners, they may want to use the so-called patch for a not-for-profit that they associate with. There will be some protections for national sponsors, and we will work together with our national television partners, as well.

Let me just say, and maybe I should have said this at the top, this is a bit of an experiment. In fact, we're calling it a pilot program with our teams, and we're saying that teams have the ability to do deals up to three years beginning in 2017-18 season. Part of the reason we wanted to do that is that as always, I'm sure there will be unintended consequences here. We don't know how exactly it'll impact the larger marketplace, and we don't know how much money it'll generate, and so we want an opportunity to look at all of that information once they begin selling.

Let me also say, it's my hope, independent of whatever additional revenue is generated through this patch, that as I've said before, I think the greatest impact will be on sort of this amplifying effect of a company choosing to associate directly with a team's jersey, then going out and promoting that relationship in the larger market. I think that will lead to greater engagement of our fans with these teams.

I also anticipate that, again, the exposure for our game is enormous, as you know, outside of the United States, and some of these companies that may choose to associate with our teams may also be based outside of the United States.

And so we'll see. We've talked about estimates of how much revenue this may generate. To me, it's very unclear because asking an individual team to estimate how it will do sort of in isolation, you get back a certain response, but when 30 teams go out to the marketplace at once, it's going to be very unpredictable how the marketplace will react.

Q. There is a knee-jerk reaction from fans, especially those that tend to speak loudest, that some don't like this. What do you say to the fan that might say, oh, this is the NBA selling out; why do they have to do this? That sentiment is out there.
ADAM SILVER: You know, one, I'd say, I understand it. It doesn't surprise me that some fans may say, I'd like to see the jerseys commercial-free. Number one, the jerseys in Nike's sales channels will not include the patch. As part of our pilot program, the only jerseys that will include the patch will be those that teams choose to sell through their outlets, depending on whether there's consumer interest in having a jersey with the patch. Those will be available, but Nike's primary channel will not include them.

Number two, I would say that to me, this is part of building the league, and I think if you look at the progression of the league over the years, there has been many sponsorship opportunities that we've added, and they've been met initially with mixed reviews, and I'd say over time that as we generate more money and invest more money back into the game, improving the game, improving our marketing, improving and growing the footprint of the game, I think the results will be positive.

But there's a reason this is a pilot program. I mean, we listen very closely to our fans, and so we'll see what the reaction is.

Q. Adam, you mentioned there was a feeling in the room that the CBA is working, but there's the potential for disruption this summer to the system and to competitive balance with the dramatic spike in the cap. What provisions are you and the owners discussing to put in the next agreement to prevent that from happening again, and are there any future anticipated revenue streams that could cause a repeat of this such as, for example, jersey patches?
ADAM SILVER: You know, I want to say, as you said in your question, to the extent they're unanticipated, I would fairly say I haven't anticipated them. But I would say specifically to your question, we are discussing internally the mechanism -- this is in essence your question, the mechanism in which the cap levels and tax levels are set. That's where the disruption is coming this summer. Arguably a good problem to have, but an unanticipated rise in the cap, and as we've talked about many times, as a result, a free agency market that will be very difficult to predict.

Number one, I'd say let's see what actually happens this summer and let's see just how disruptive it is. And number two, to the extent it is, it's something, without getting into specifics, that we will be discussing internally and of course discussing with the Players' Association, and the only changes we can ultimately make are by agreement with the players.

Q. How much revenue are you modeling in for the jersey patches? Is it significant enough to cause this kind of disruption?
ADAM SILVER: Well, number one, so that begins in the '17-18 season, so to the extent that the agreement will be modified, we'll be able to take that into account.

Number two, I will say some projections just because we've been public about this before, that the way we're modeling the jersey patch on a league-wide basis, we're estimating it will result in approximately $100 million of additional revenue. Based on that by that year we will be a roughly a $7 billion business, it cannot by definition materially impact our financials.

But again, there is enormous uncertainty I'd say around this program. Of course, I'm hoping that ultimately there's even greater interest in these sponsorship opportunities. And again, ideally, it would be new companies coming into the NBA who, as the media landscape is changing and where people are watching much less live television outside of sports, people are watching fewer commercials, that this will become an important opportunity for companies to connect directly with their consumers. What that translates into in terms of dollars is unclear to me.

Q. I think at All-Star Weekend you had said that USA Basketball on its own had placed some checks and balances on Jerry Colangelo with his new role with the Sixers for USA Basketball, and there was a report this week that said that the NBA had put in some checks and balances because some teams might have complained about a potentially unfair advantage of his role. I was wondering did the NBA put these checks and balances or USA Basketball?
ADAM SILVER: Those were checks and balances put in place by USA Basketball, and so ultimately -- and it was nothing new in the last few weeks. It was something that in essence USA Basketball restated once Jerry Colangelo took a role with one of our teams, and that is USA Basketball has a board, and USA Basketball's board has ultimate say as to the composition of that team.

Let me also say about Jerry Colangelo, in fairness to Jerry, Jerry was not out there looking for an opportunity with one of our teams, and again, his getting directly involved with the 76ers was in part due to my reaching out to Jerry, not because it was necessarily my idea that the 76ers needed an advisor but once Josh Harris, the principal governor of the 76ers, said he would like to have a sounding board, someone with league experience, I was the one who connected him with Jerry Colangelo.

I would say I feel a little bit of an obligation to defend Jerry here, because he was not looking for that opportunity. He was unique in that initially when Josh was looking for someone to advise him, because he had a president of basketball or general manager who was fully engaged at the time, he was not looking at the pool of potential general managers. For example, Bryan Colangelo, who of course has ultimately ended up as president of basketball operations for the 76ers, was someone at the time that Josh excluded as a possibility because it was clear that Bryan was looking for a full-time job as the head of basketball for one of our teams.

So in essence, the 76ers ended up with Jerry because Bryan was not an option at the time. And in terms of Jerry's -- and it was something when I reached out to Jerry, the potential conflict with USA Basketball did not even occur to me. I think to me, my role is to ensure we have 30 teams operating well, competing on the floor, and I thought there was an opportunity here for relatively new ownership group to get the benefit of the experience of Jerry Colangelo.

Once he became the advisor to the team, some teams did point out that there was a potential for a conflict there, and in response to that, the in essence appearance that there could be a conflict, USAB sort of reasserted its role in the process here to ensure that there was, to your point, a checks and balances here and that ultimately team selections would have to be approved by that board.

So that's sort of how we ended up where we are. I think that sort of within the larger NBA, we deal with conflicts all the time. Of course Gregg Popovich is going to be the next coach following Coach K, and you could make the same argument there, that to the extent the coach has influence over the team, there will be a conflict, or you could make the argument that -- and we've had several NBA coaches during Coach K's tenure who have been assistant coaches to the team who have access to those players in the summer that technically under our collective bargaining agreement and our rules would not be allowed, but for the greater interest of the game, we allow those conflicts.

So it's something that USAB monitors from its standpoint and we monitor from an NBA standpoint, but I'd say ultimately in terms of the larger basketball family, we all work through these issues.

Q. Obviously you've made a lot of tweaks to the schedule this year to try to find more player rest, but players playing 82 games is down significantly from five, ten years ago, to the point where it looks like they don't want to play 82 games, coaches don't want to play them 82 games, a lot of healthy rest and shutting players down. Do you have any concerns, I understand if you play more games financially it's more money, but simply people don't want to play that many games anymore?
ADAM SILVER: You know, I'm so happy you asked that question because I was listening to one of our commentators on one of our networks the other night saying, sort of a form of your question, saying that the players don't want to play 82 games. In defense of our players, every player I know wants to play 82 games. It's their coaches and their organizations that are deciding that they shouldn't be playing 82 games. As we all know in this room, players want minutes. They want games. So I think, first of all, players want to play, and what we see has happened in this league, frankly the data has gotten better, the analytics have gotten more sophisticated, that there's a strategy of resting players occasionally.

I am concerned more from a fan standpoint. I certainly get lots of emails and have discussions with fans, especially ones who may have a one-time opportunity or once-in-a-season opportunity to see a particular player and then that player rests. I don't have an easy answer to that. One, there's a reason why our rosters are -- they're 13 actually now. They used to be 12, now they're 13, and teams can have up to 15 players under contract, and so, one, what we're seeing is teams are going deeper into their benches. When you think about it in terms of the NBA, we have the 430 greatest players in the world, and I think that's part of what we all have to get used to, that players who aren't the superstars will get more minutes in this league.

I'm also not sure it's just a function of an 82-game schedule. One, in terms of correlation with injuries, the best data we have is that the connection is with fatigue rather than absolute numbers of games in the season. I mean, as I've pointed out before, it's not as if we have more injuries toward the latter part of the season than earlier in the season. Where the correlation comes is when guys are tired, and because we understand that, what we have done with where we can do a better job is with scheduling, so we dramatically reduced back-to-backs and four games in five nights. We actually had a presentation at the Board of Governors meeting from our head of analytics, a young man named Evan Wasch, talking about how we're even going to get that much more sophisticated about the scheduling process for next year.

So I think we can do more. I have no doubt, but one of the things we'll be talking to the Players' Association about is the preseason, and can we find some additional days over which to spread the 82 games.

So you know, first of all, you're right, nobody wants to shorten the season right now. The players don't want it shortened, the NBA doesn't want it and I don't think our fans want to see it shortened. My sense is when the season is over, fans quickly turn to the Summer League and want even more NBA basketball. But can we do a better job keeping players healthy and on the floor? I think the answer is yes.

We entered into a relationship with GE Healthcare out in Milwaukee about collecting sort of the best scientific information, the best medical information and collaborating with our teams on the best rehabilitation, the best techniques for prevention. So those are all things that we're focused on.

But it's not unique to this sport certainly. In European soccer, with their multiple tournaments, they also strategically rest players at certain times, and I think it's just -- I don't think we can turn the clock back there. I think that that is going to become part of our game.

But again, coaches and teams have different philosophies, as well. I've been listening to a few coaches recently who also get concerned that when you rest players, they get out of rhythm, as well, and ultimately I'll just say, as we go into our playoffs now, it quickly switches to the criticisms that there's too much rest built into our playoff schedule, and people say, Oh, I can't believe there are three days before a team plays again.

We're always trying to find the right balance, but I think the good news is about the way our playoff schedule is set up, and actually we added even an extra day in The Finals this year, so once we get into the playoffs that the players do have an opportunity to sort of get their legs back and get adequate rest between games, which to me ensures the best possible competition.

Q. Can I go back to North Carolina?
ADAM SILVER: Sure, anything.

Q. Could you characterize how influential or persuasive the letters from the U.S. Senators might have been or the offers from Oakland or Atlanta or any other city might have been in your discussions? And then do you think that the league can be effective in bringing the kind of change you might like to see to the law without an explicit threat of pulling the game out of Charlotte?
ADAM SILVER: So I would say I have tremendous respect for elected officials and those who choose to serve their communities, those who choose to serve their states and their country. I began my career working in Washington, D.C.; I was a legislative assistant to a congressman. So I take those letters very seriously, and I think when we receive letters from elected officials that have a point of view, I think it's more information that we incorporate into how we view issues.

So I think whether those letters come from elected officials, whether they come from fans for that matter, I think it's something that I think the league prides itself on being good listeners and also recognizing that we may learn new things, that there may be a point of view we're not understanding. Just as I said before, I think there is something I'm not understanding about the dynamic in North Carolina right now, because as I said, I went to college there, I travel frequently to North Carolina, and I have tremendous confidence in the people of North Carolina, and ultimately I'm very sensitive to this notion that someone who's very much an outsider to North Carolina or league is trying to dictate what the societal norms should be in North Carolina.

I also, to your question about deadlines, I'd say ultimately we've come to the conclusion, the league office, together with our owners and the Charlotte Hornets, that the best way to effect change here is by engaging with the community as opposed to setting deadlines. Just to reiterate, as I said earlier, this notion that sort of we set a deadline, and then somehow we're in the position to dictate to the community of North Carolina that, "Change this or else," and then we were to say, "Fine, we'll move on" -- we have a team that plays in Charlotte, North Carolina, and I'm not even sure what statement we'd then be making about that team, and I think what's next, and then people say, Should your team be playing in North Carolina.

As I said, we have a playoff game there next week.

So while I understand why certain entertainers have made the decisions they've made so far and maybe ultimately through those actions that will result in, to me, a needed change in North Carolina, but I think for us, by no means are we saying we're stepping back. The message is not that somehow the current state of affairs is OK for the league.

Let me be clear. The current state of the law is problematic for the NBA in North Carolina. I think for the league office and our owners, I think the discussion was how can we be most constructive in being part of a process that results in the kind of change that we think is necessary.

That's where we find ourselves.

Those letters I've received from senators, discussions I've had, continue to become part of the process, and I think to the extent that sports and the NBA can be used as a constructive force to bring people together -- I mean, I'm not a politician. We're not a political party. I mean, ultimately our interest is in conducting a successful All-Star Game in North Carolina, having a team that can play in North Carolina, in a non-discriminatory environment.

Again, I do think there's a special role for the NBA. It's something that's been part of the history of this league for many, many decades, and I'm very proud to have inherited that mantle. There was a sense from the owners in the room that this is much bigger not just than an All-Star Game for the NBA, but this is much bigger than the NBA. I think that even this league attracts a particular kind of owner with certain values, and from that standpoint, I know I speak for our players, as well.

Of course Michael Jordan is not just the owner of the Charlotte Hornets, but he's from North Carolina. Chris Paul is from North Carolina. He's the president of our Players' Association. Steph Curry is from North Carolina. And so we are part of the community.

You know, I do have a sense that, again, by us engaging in this process we're all together sort of better off, in many ways behind closed doors, working toward what to me should be the appropriate resolution, and that is a change in the current law.

Q. On a micro level, I guess there's a sense in Boston that a discrepancy in tie-breaking procedures related to multiple teams as opposed to two teams may have had a role in Boston ending up with the fifth seed. I'm wondering if that came up at all in terms of the discussion, and in a macro sense, I'm wondering how you feel about this year's Playoff seeding because that's been a topic all the way to 1 through 16 or other alternatives that have been suggested.
ADAM SILVER: That was not a topic specifically, the Boston seeding, at the owners' meetings we just concluded. We've talked a lot about seeding in the past. We didn't talk about it at this meeting, but in the last several years, there have been several presentations from the league office made to teams, and we've considered various other ways of doing it.

I know that from a fan standpoint, there is real appeal to this notion of seed your teams 1 through 16 going into the playoffs and possibly two Western Conference teams could meet in The Finals or two Eastern Conference teams, and where we ended up was that -- again, it relates directly to the resting issue and injury data, is that we would be dramatically increasing travel because if we're going to seed 1 through 16 we would need to have more of a balanced schedule throughout the year. That would result in more travel. Speaking of Boston, you could have a Boston-Golden State first-round matchup in the playoffs.

It's something we continue to look at. The current state of our seedings and drawings are what we think is the best way of doing it at the moment. I mean, maybe as planes get faster, new approaches to the season, we'll look at other ways to do it, but it's always a balancing act, as with so many things, so I'm comfortable with where it currently stands.

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