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September 20, 2019

Adam Silver

New York, New York

ADAM SILVER: Appreciate everybody being here today.

We've just concluded two days of our board meetings. Number one, Larry Tanenbaum, the principal governor of the Toronto Raptors, was re-elected chairman of our board.

And probably what you're most interested in is we discussed a package of proposals to increase compliance with existing league rules. We had, I think, a very healthy discussion on those issues. Certainly the provisions passed unanimously, and there was a strong view I think of every single person in the room that we need to ensure that we're creating a culture of compliance in this league and that our teams want to know that they're competing on a level playing field, and frankly don't want to feel disadvantaged if they are adhering to our existing rules.

I think there was, again, a long, involved discussion about what the appropriate tension is that's necessary to ensure compliance, and that means there needs to be consequences when rules are violated. I'd say that a lot of what we talked about is work we've done over the summer to learn best practices when it comes to compliance. That includes random aspects of audits. It includes record keeping on behalf of our teams. It requires appropriate processes in place to ensure compliance. It includes ensuring that there is a culture, as I said, of compliance at the teams. And that includes certification. That means that the governors of the teams, that the heads of basketball operations, have to be certified that they are complying with our rules.

I'm sure you've heard some of the chatter around these rules. As I said, I understand it, that none of us want people looking into our private affairs. I think part of the discussion, of course, went to what the scope of any investigation should be. I am not interested in looking in any aspects of people's life outside of what is relevant to the operation of their teams, unless of course there is an issue that requires that we look into something outside the scope of what we're addressing here.

The league has the authority, in essence, to promulgate what those procedures will be going forward. The only thing that actually required a vote of our team governors was, in essence, the discipline schedule, which included increased fining authority for the league. Although I'll say, I think there's a general sense in this league that among the tools we have to ensure compliance, fining authority unto itself may be one of the least effective tools. So within the power that already has been vested in the league, there is the ability to impact competition directly by suspending executives, taking away draft picks and voiding contracts. All of those provisions are on the table.

But again, the ultimate goal here is to ensure compliance and to ensure that there's that appropriate tension that exists at the team. So there is sort of a significant threat that if a team doesn't comply that there will be consequences.

With that, I'm happy to answer any questions.

Q. I want to go back to the other day with the Nets vote. Obviously expected, and Joe [Tsai] has been in the family for a while, but your expectations for the Nets with Joe in charge and sort of the importance of keeping David Levy in the NBA family, so to speak?
ADAM SILVER: One, I've known Joe Tsai for a while now, both through his position at Alibaba in China and as an investor in the Brooklyn Nets. My expectation is that they are going to operate a first-class operation. As I said when they closed on this transition, he is one of the best-known media, internet and technology executives in China. He has had incredible personal success through Alibaba. He is a passionate basketball and sports fan. He not only wants to win but he wants to operate a first-class organization.

I'm thrilled that he's hired David Levy. He's not only been a longtime business associate at Turner Sports but he's a good friend as well. He lives here in the New York market. He knows the New York market. He also has a huge Rolodex and real expertise in media.

I think while all our owners are incredibly competitive with each other, Joe is very much welcomed to the fold. I think he'll add enormous value to the entire league, not just because of his business operations in China, but again, because he's a visionary media executive.

Q. In Las Vegas, there was some chatter about changing the dates of free agency to try to lessen or limit the tampering. Is that still on the table? And secondly, if you increase the consequences of tampering, won't owners, executives and players just get smarter about it? Use apps like Signal and things that can erase communications?
ADAM SILVER: Well, first on potentially moving the timeline for free agency, yes, that's still on the table, but that's not something that the league has the ability to unilaterally change. The provisions we talked about today are all either already part of the collective bargaining agreement and we were announcing our intention with our teams as to how we'll enforce that rule, or again, were things that were already within our purview.

There is a whole other bucket of issues that would need to be collectively bargained with the Players Association. We've had some informal discussions with the Players Association as to their view, for example, on whether it would make sense to move the beginning of free agency. Again, I think there is a mutuality of interest between us and the players in operating a level playing field, and so my sense is those conversations will continue. I don't have any expectation that anything is going to happen in the near term, but those are all going to be on our list.

In terms of increasing the consequences and whether that just pushes inappropriate activity more underground, number one, my sense of the room was this was not just about league office versus teams, that what we are really seeking again is a cultural change in the league, that all the partners in the league are essentially saying, this is the kind of league we operate.

I think if someone is absolutely determined to cheat in any industry and people are willing to do anything to be successful, I guess you have rogue actors in every field and in every industry. I think what we're saying, though, is that we believe through these tools, we think we're dramatically going to increase the likelihood that we're going to catch you. I don't want to suggest there's any perfect system. I think at some point you're relying, at least in part, on the good faith of partners working together and a sense from all of them that, as I said, that is a culture in which people want to compete fairly.

But I think just as there are new tools that potentially people could use to communicate, there are other tools that are available to the league to try to ferret out inappropriate behavior.

Q. I've been around long enough to recall about 20 years ago when the Joe Smith salary cap circumvention led to severe penalties, and those tools you mentioned were almost all used against Minnesota for the series of illegal contracts. Draft picks were stripped, executives were suspended, a major fine and a contract was voided. What would it take now in the spirit of compliance for you to use some or all of those rules again?
ADAM SILVER: It's hard to be specific in that way. I mean, certainly if we had an incident along those same lines, we have the same tools available to us. I think that was one for a variety of reasons that was just such a bright-line violation, and at the time the league office responded very forcefully.

Again, I think the environment I'd say has changed in certain ways. Having been involved with the league for a long time, I know there's been some people out there saying things have gotten much worse. I don't necessarily think things are worse than they were in the old days. I think there's a lot more transparency around the league. There's a lot more attention. There's a lot more media focus on the league than there used to be. There are more platforms in which people can discuss these things.

I can only say I think that that would be enormously risky behavior. It was back then, and if there were to be a similar fact pattern, we would respond in a very similar way.

Q. I'm curious, the teams are a big part of the equation. What sort of discussion was there about the player end of this, and particularly at a time where some of their noncompliance seems like empowerment?
ADAM SILVER: Well, let me again on the player empowerment point. I think in some cases what is being viewed as player empowerment is simply the rights that they have under the collective bargaining agreement. It's not empowerment or not; it's that we sat across from the union, we negotiated certain rights for players, and teams have certain rights. For example, contracts, especially from the time period you were talking about earlier, have come down significantly in length. It's two-sided. When contracts are shorter, players become free agents more often. Some people view that as player empowerment. I just view that as the operation as the collective bargaining agreement.

On the other hand, as the amount of attention has grown around the league, as the value of their contracts, sort of the value of our teams, it's brought even more attention to an individual player's ability to change the fortunes of a team, and that provides enormous leverage for that player.

Again, I don't necessarily see that as empowerment, either. I think there are certain issues, as I've said before, that need to be discussed directly with the Players Association, and that goes to what the appropriate balance of power should be between a player's ability to become a free agent, to choose the market that he wants to play in, versus creating a 30-team league where every team has the ability to be competitive. There are certain issues that teams want and there are certain issues that players want, and hopefully as we've done historically, you can strike a fair balance.

I think sometimes there are unintended consequences. I've talked about provisions of the collective bargaining agreement which then lead people to have a sense that things have now moved a little bit out of balance. That's when we sit back down with the players, not always at the end of a collective bargaining agreement, sometimes mid-term, and say how do you think these things are working.

I think what's lost sometimes is that for the 450 players or so in the league, they want a competitive landscape as well. They don't necessarily want a system where there's a sense that certain teams have a competitive advantage over other teams because then you're just benefiting the players that happen to be at those teams.

So I think in many ways that's why our relationship with our players has been so productive over the years, because at the end of the day, we have a common goal. We have a system where our revenue is essentially evenly divided. We have a common interest in growing the pie, and I think we all believe that the better the competition, the larger the pie is likely to be.

The environment we operate in is constantly changing. That's why we're making adjustments as we go, and that's why we continue to talk to the players about these issues.

I think the things we did today were areas where we already have rules on the books and essentially the league was coming in at the direction of our teams and saying -- and I'll accept responsibility -- you need to do a better job enforcing the rules that are already on your books and do a better job ensuring that there is a culture around the league where people believe there are absolute consequences if you don't play by the rules.

Q. You mentioned during your opening statement about how there were concerns expressed about privacy issues and I think you said there was only going to be a limit on what you guys were looking for. How did you allay anybody's fears that that's actually the case on that when you do get into people's communication then things kind of grow out from there?
ADAM SILVER: Well, I'm not sure I allayed everyone's concerns, but I will say it's my job to create an appropriate amount of tension in that area. Obviously, if people felt that they were absolutely free and clear to communicate in certain ways, you wouldn't be addressing the consequences notion of improper activity.

On the other hand, I'm not looking to take devices. I mean, as we all know, in the first instance, generally when there's legal type discovery, you work with lawyers, team counsel, who have an ethical obligation to produce appropriate communications when asked. I think what we agreed with our teams is we need to work through some of the specifics on how compliance will work, how audits will work.

Again, I understand it, as I was saying from the other standpoint, none of us want people looking into their personal communications. But I think people who operate in a public company environment, who operate in a financial world, who are used to compliance procedures, understand that you have to find the right balance of disclosure and privacy so that you can ensure that people of goodwill will understand that there will be consequences to inappropriate behavior.

Q. You mentioned in your statement and then again that you don't want to take people's devices. Do you have the power to take people's devices now?
ADAM SILVER: We do have the power to take people's devices. That is not something certainly in the first instance we would be looking to do. I think we can create the appropriate culture without certainly on a random basis people feeling that that's something that is necessary. We have lots of other tools available to us.

Q. What can you share with us at this point about the mechanics of the audit, how and when the five teams will be chosen? Will they be publicly identified, that type of thing?
ADAM SILVER: There's not much more I can share with you at this point, and not because I'm withholding information from you. It was, we listened to our teams. We heard their concerns. We said we would go back and, in essence, come up with a framework in which we would discuss with our teams before we implemented it and recognize the balance, again, of their privacy concerns with our need to ensure compliance. At some point there will be more information available, but the league has additional work to do in that area before we, in essence, promulgate the specific rules around compliance.

FastScripts Transcript by ASAP Sports

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