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NBA MEDIA CONFERENCE
July 31, 2018
New York, New York
ADAM SILVER: Thank you all for being here. Jim, thank you for being up at this dais with me.
Today we're here for what we believe is a historic announcement. That is that the MGM will be the NBA's first official gaming partner. This is an industry and area we've been discussing a lot over the last several years. Of course, with the Supreme Court's repeal of PASPA a few months ago, this has all really come to a head.
I think it's no secret that the people following this league know our first choice was to have a federal bill that would replace PASPA and create a consistent national framework for sports betting. That's not the landscape we're currently working with. We're working state by state.
I've also said we've had discussions around the country with state legislatures. We also indicated we were open to entering into commercial relationships directly with casino operators.
MGM has a very unique position with the NBA and the WNBA. Of course, MGM, through Jim Murren as their CEO, is the owner of the Las Vegas Aces, our WNBA team in Las Vegas. In addition, MGM is our partner in the Las Vegas Summer League.
Jim and I had an opportunity to spend a fair amount of time together in July when I was in Las Vegas for the Summer League. We said, Let's take advantage of this opportunity to do something historic, and that is to enter into the first commercial partnership between a gaming establishment and the NBA.
What this relationship entails is access to official data for the many casinos that MGM operates. It's the use of the NBA's intellectual property. And as we discussed before, we're very focused on integrity provisions to protect our fans, to protect those who choose to engage and bet on the NBA.
We'll get into some of those details later, but as I said, to us, there was no better partner out there in the gaming business to begin with than MGM because of the breadth of their holdings. They have roughly 12 resorts just in Las Vegas alone and operate in several other states.
I'll add that Nevada has by far and away the most sports betting experience in the country. Sports betting has been legal in the state of Nevada for almost 70 years. So there's an enormous amount of regulatory experience there on how to deal with sports leagues and how to deal with bettors.
For us, I think I'll note the way Jim and I approach this would be that it would be a learning experience. We didn't overnegotiate the deal. I think there was a lot of good faith involved, which can only come about when you have a preexisting relationship with your partner.
And compliments to the folks at MGM and the people at the NBA that worked on this deal. We all realized there were certain areas we didn't have enough information, frankly, to keep negotiating to the nth degree. We were better off saying, Let's work in terms of reasonableness and good faith, and let's see how this business begins to unfold.
I think what was very important for the NBA was that we were able to establish through a commercial relationship that we should be compensated for our intellectual property and for our official data. I think ultimately it was on us to convince MGM that there was a commercial benefit to compensating us for that data, that this wasn't just about doing the right thing in terms of intellectual property, but that through this relationship with the NBA and the WNBA, that Jim could indeed differentiate his business from his competitors, number one, with this official gaming status designation that MGM and its properties will have, but also by creating better user experience for gamers so they know, whether they're a brick-and-mortar casino or whether they're using his app online, that it's going to be an experience that both MGM and the NBA have worked on together where the consumer is first and foremost.
Lastly, I'll say we're thrilled, Jim, to be entering into this partnership with you. I could not think of a better person and a better company to begin this relationship with.
Now I hand this over to my friend Jim Murren.
JIM MURREN: Thank you, Adam. Good afternoon, everyone.
This truly for us is a historic day. I've had the honor of knowing the Commissioner for several years. I have enormous respect for you as a leader, and the NBA.
What is so meaningful to me and MGM about this relationship is the cultural alignment between the NBA and MGM. The foremost mission is to maintain and preserve the integrity of the game, the fan experience for the NBA fans, in fact help catapult further the global presence of the NBA. As a global entertainment company, I feel MGM has an opportunity to partner with the NBA to do that.
For us, a company of about 80,000 men and women who is based in Las Vegas, we work every day to create entertainment experiences for our guests. In fact, last year alone we hosted over nine million men and women to our theatrical events, our sporting event. And, of course, our three arenas have hosted some of the most historic sporting events of all time, whether it's in boxing, UFC, hockey, basketball and the like.
Adam and I thought about how do we best position the league and, in fact, the sports industry in the emerging landscape we now have in the United States. How do we create and an enhanced fan experience? How do we create the trust and integrity of the gaming experience?
I felt that if we could work with a leader like the NBA, and a commissioner like Commissioner Silver, we could accomplish that. We could provide the gaming customer with that critical data that they need in order to make their best decisions possible. We can increase the fan experience to the benefit of the league and to the global customer that loves the NBA.
First and foremost, I would end how Commissioner Silver started. This is a partnership of trust. It's been based on an understanding that this is a new frontier. We have to figure this out together. We have to understand that there are many questions left unanswered. But it's been my commitment at MGM to try to answer those questions.
The fact that we have a passionate love for basketball, dating back many, many years, and a passionate love of sports in general, I felt this was the perfect partnership to try to enter into.
I have to credit Commissioner Silver's team of folks that negotiated this deal with the MGM team led by Scott Butera, the President of Interactive, in the audience. They worked collaboratively, quickly, but with great integrity, trust and confidence and faith in one another.
With that, I'm very honored to be here. Thank you.
Q. Adam, I don't expect you to disclose the price here, but can you tell me in any way is this deal predicated on how much is bet on NBA games?
ADAM SILVER: The short answer is no. I mean, it doesn't work specifically that way. I think we're still having our discussions with our states about so-called integrity fees based on handles.
I think here, as Jim said, there's so much that's unknown. I think we understood the value of our marks of official designations. I think that comes more from the world of what we would call marketing partnership at the league.
I think then in terms of the data we're providing, we have a sense of the magnitude of his current business, and a sense of where things may go over the next few years. We generally, I would say, tried to approximate, in a sense to come up with what we thought was fair compensation. I will say we do feel that we're being adequately compensated.
At the same time, again, to echo what Jim was saying, I think there was a recognition here that it's a leap of faith on both sides. It's a deal moderate in length where I think we can both step back and assess as we go and see is this working, is this deal fair, are we providing the consumers with the right type of experience.
I would just say that to me there's many different ways to skin the cat, so to speak. We decided here, rather than sort of relitigating the integrity fee, which is still being hotly discussed state by state, let's find an approach which is unique to us and where we both feel we're being fairly treated.
Q. Does this mean that no other big major casino will be able to do a deal like this? Is this exclusive to MGM? What about teams that may want to work with a local casino in their market to do an official data deal?
ADAM SILVER: The only thing that is exclusive about this deal is the designation, the official gaming partner of the NBA. I will say Jim very well understood, and he was someone who used to run the American Gaming Association. Of course, he has both sort of competitors and friends. There's a common interest in the entire industry in ensuring there will be an experience of integrity for all sports bettors regardless of what operator they happen to be doing business with. So Jim well understood that we also would be in the business of licensing our intellectual property, specifically our real-time data feed, to other casinos as well.
In fact, I would say because Jim, by going first and establishing the value, that it is appropriate to pay for that intellectual property, I think he actually should be rooting for his competitors to do deals; otherwise, he may be at a competitive disadvantage because he has a higher cost structure.
Do you want to add to that (laughter)?
JIM MURREN: Is this a rebuttal period (laughter)?
I think I'd go back to the fact that my overarching objective is the integrity of the game. I know the value of data. To be able to have the official NBA data for sports bettors around the world is very valuable. I was willing to and have paid for that.
I also think it's important to have this league relationship. But I'm certainly not in a position to begrudge any other casino company for having individual transactions with team owners locally or otherwise.
I have always been of the belief that you should not create artificial barriers for the consumer. This is all about improving the fan experience. I'm confident at MGM, based on our resorts, based on our brands, based on our people, that in a competitive marketplace MGM is going to win.
Q. Adam, it seems like there's a lot in this deal that looks a lot like what you guys were lobbying for on the state-by-state level, official league data, sharing. Is this a shift in strategy from accomplishing your goals state by state legislature-wise to maybe accomplishing the goals operator by operator on that end?
ADAM SILVER: Thanks for the question. It's a bit of a shift. Again, I go back to first principles for us. Our initial strategy was a consistent federal framework. There was a shift in that strategy when we saw that wasn't going to happen with the repeal of PASPA and no federal replacement. We were then going to be looking at a state-by-state strategy. Once we started discussions with the states, we're realistic. We saw it was going to be an uphill battle. By the way, it's still early days in those state-by-state discussions. At least 20 states are currently considering legislation, but only a small handful have passed bills so far.
I think we said at the same time, including to the states, we never ran from the fact that we thought we could accomplish commercially a lot of what we were trying to achieve with the state legislature. As I said, I don't think that's the ideal way to approach it.
I'm certainly a believer in this industry, both in sports and gaming, that there is a place for appropriate regulation. I think the notion that, again, by MGM's willingness to go first, he's increasing his cost structure potentially against a competitor that doesn't choose to purchase official data, isn't necessarily where you want to be either from a league or consumer standpoint.
Ultimately, though, I have complete belief in what Jim is saying -- that is that they're going to win in the marketplace. Those operators who create the best experience for consumers, that have official data, that have the official imprimatur of our leagues and other leagues as well, are going to be those that win in the hearts and minds of the consumers.
Q. Jim, it seemed in the past couple months, operators and leagues, especially the NBA, were at odds on specific points. Can you give us a sense of how you got to a point where you're sitting next to each other announcing this today?
JIM MURREN: Well, MGM has never been at odds with the NBA. As I said earlier, and I think Adam has reiterated, this is a work in process. We're trying to figure this all out together.
There's never been any disagreement that the integrity of the game was tantamount to any principle of negotiation. So I felt as one of the world's leading gaming companies -- a company that is licensed all around the world, a company that has these privileged licenses that are at risk if MGM does not uphold itself to the highest standards of compliance and integrity -- there was a transaction to be done with a leader like Commissioner Silver and the league.
I think we've accomplished that. I think we'll be able to help the league establish its dialogue in the states in which we operate. Now that we've also signed an affiliate agreement with Boyd Gaming, we're literally going to be in every state in the United States that will approve sports betting.
That's a tremendous market opportunity, but also, in my opinion, a tremendous responsibility that MGM has in order to be first, be a leader in integrity and fan engagement. I think we're accomplishing that with the NBA.
Q. I ask this question with all due respect, but Commissioner Silver, going into this partnership, were you aware of MGM's plans to sue the shooting victims in Las Vegas? Do you have any qualms in forming a partnership with such a company?
ADAM SILVER: I didn't have preexisting knowledge of their plans. I, of course, read in the media when that lawsuit took place. Jim and I discussed it. I dealt with Jim, frankly, the very day after the shootings took place last fall. I would just say I can't imagine a company that could have responded in a more appropriate and heartfelt way, and Jim did personally, to those shootings.
As someone who is a lawyer -- I haven't practiced in a long time, but I recognize sometimes a legal strategy does not always lend to the best communication strategy. I think when people actually step back and understand what that lawsuit was about, which is essentially whether folks should be suing under state or federal law, that his lawyers -- I don't know the details; I'll let Jim speak to this -- felt that was necessary on behalf of the company to sue and bring all those lawsuits into a common form. I would say as a lawyer, I understood it.
Again, I've only been sympathetic to both the employees of MGM and the hundreds if not thousands of lives that were impacted by that shooting. So, no, my reaction wasn't, This is not a company we want to do business with. In fact, as I said, just from dealing with Jim throughout that crisis, I don't know how he could have responded in a better way. I saw the toll it took on him personally.
JIM MURREN: Thank you, Commissioner.
I respect your question. That act of despicable evil was something that we can never have anticipated. It was an act of a lone gunman that wreaked havoc and pain, suffering and death on so many people.
MGM, from the moment of that night, has tried to do its best to help the victims, the employees, the community heal.
The only action that we've taken recently is trying to consolidate the cases that have been brought forward and move them into federal court. We're not looking for monetary damages. We're not looking to harm anybody. In fact, we would like to see those affected compensated as soon as possible.
If not for what we've done, this will likely go on for years and years and years, extracting even more unforgivable pain on those that have been affected. I know the headlines looked awful, but they don't reflect our intent, our compassion and what we want to do, which is to help everyone heal from this tragedy.
Q. With regard to the data piece, to what extent, if at all, does Sportradar and your other data partners get folded into this partnership?
ADAM SILVER: Our Sportradar deal is only operative outside the United States. The official data feed that will be provided to MGM will either come directly from the league's operation center or from a partner yet to be named by the NBA.
Q. Along the lines of the official data part. Just to be clear, does this include the Second Spectrum tracking data? For Jim, how do you envision using the official data once you have it?
ADAM SILVER: In terms of the Second Spectrum tracking data, it will include some of it. I think what we both agreed requires a certain amount of good faith and reasonableness. This goes to the consumer protections as well. It's precisely what sports bets on the NBA, MGM and its affiliates, should be taken.
What underlies the question is Second Spectrum data that tracks players throughout the arena. It's unclear how that data might be used in some sort of proposition bet or in-play bet. I think that's something we have to work out.
Again, how those bets would be verified, how that data would be provided. As Jim said, this is a whole new world for us. My sense is initially it probably would not include the Second Spectrum data, but I think it's something, as we build what the appropriate official data fields are for gaming over time, that's something we'll continue to look at.
JIM MURREN: I would add that how it's going to be used would be determined by a joint venture we just formed yesterday, at least announced yesterday, with GVC. GVC is the largest sports betting company in the world, based in the UK.
As you know, here in the United States, it's a fairly nascent business, a young business, certainly a young legal business. It's been a historically illegal business. It's not a young business in the United Kingdom. GVC is the most expert. They have the best proprietary technology. They have the best in-game betting analytics. As a result of that, they have the highest market share.
We believed in order to approach the United States, we needed to do the following. We needed to have great brands. We have that at MGM. We needed to have the right market access, be in the states where we can do so. We have that. But we also need the best possible technology and the best in-game betting experience, which we get with GVC. Now we have tremendous data, analytics, information from the NBA. That will determine who wins and loses in this arena, the sports betting arena, in the United States. I think MGM is going to win.
Q. Jim, I'm curious about whether you would be here today if not for the Supreme Court's sports betting ruling in May? I realize you have casinos and properties in emerging markets. I don't understand what's different in Las Vegas. You've been offering betting for decades in Nevada. How is it relevant to this?
JIM MURREN: Yes, we're based in Nevada. Again, going back to what I said earlier, I don't agree to artificial barriers. I don't agree that just because I'm based in Las Vegas, in Nevada, that only people in Las Vegas and Nevada can gamble on sports betting. That's an arbitrary barrier.
The fact that the Supreme Court overturned PASPA now gives states the independent opportunity to decide whether or not they want to allow for sports betting in their jurisdiction. That set the wheels in motion to determine whether or not MGM can play a leadership role with a league to create a global platform, to increase the fan experience for a league. I felt the best possible early adopter to this would be an innovative league like the NBA with an inspirational leader like Commissioner Silver, and that's why we're here today.
Q. Might this have happened anyway, even if the Supreme Court turned the case away?
JIM MURREN: It's a hypothetical I haven't considered.
Q. Jim, obviously you're getting the data feed now, which will enhance the in-game betting. How much more confidence do you have that bettors will have more confidence that that's a better product now? Then I understand that this deal will not include the actual in-game product where you can actually bet in-game. What would that look like in the future for you?
JIM MURREN: Well, fortunately we have a running start here because we operate the largest sports betting operation in Las Vegas with our 10 resorts. We hub out of the Mirage property. As you know, we own properties up and down the Las Vegas Boulevard. Our playMGM app has been in place for quite some time and is already popular.
Closer to home, we own Borgata. At the end of this week, we'll be taking mobile bets from Borgata and playMGM in New Jersey.
I think the experienced gaming customer, and even the novice, is going to really gravitate toward integrity, trust, branding, information. I think this provides us a tremendous advantage over my competitors. I think that has proved to be the case in the United Kingdom and in Australia and around the world. I think it will prove it's the case here.
Q. Jim, have there been any discussions with the players' union about using individual player likenesses? Are you satisfied with league marks?
JIM MURREN: I've had no discussions.
FastScripts Transcript by ASAP Sports