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NATIONAL BASKETBALL ASSOCIATION MEDIA CONFERENCE
April 15, 2011
COMMISSIONER DAVID STERN: If the regular season is any indication, we are in for an extraordinary postseason. Anticipation, I think around here and amongst our fans across the nation and literally around the world, is extremely high. This season, the fan response has been extraordinary in a difficult market, we have managed to be up a bit in attendance. It was the most-watched regular season ever in the history of our relationship with TNT, ESPN and ABC. Local viewership was up double digits and attendance is up, as well. So it's all good.
With respect to the Board of Governors meeting we had a visit with Tom Gores with respect to his purchase of the Detroit Pistons. We are not ready for any formal action but I would say the meeting went well. Tom I think impressed the Advisory Finance Committee with his sense of community and commitment to making the team and continuing the team as a community asset. And he committed to us that although the closing under the contract would be as late at June 30, he plans and Karen Davidson plans to close by the end of May.
We had a couple of long sessions which covered a variety of things. No. 1 was Sacramento where finally the board voted to extend the time for the Maloofs to file for relocation to Anaheim until May 2. There were very good presentations from the Mayor of Anaheim, the City Manager of Anaheim, Mr. Samueli, the owner of the lease on the Honda Center, Mike Schulman, the chief operating officer; and there were very good presentations from Mayor Kevin Johnson of Sacramento, who presented several economic scenarios that involved improved performance for the Kings in Sacramento; while the ability to build a building there was demonstrated, and the mayor, Kevin, said that he had a strong sense of confidence that that could be done at this time.
And so we are looking forward to a bit of a fact-finding visit, probably either late next week or early next week or thereafter by Clay Bennett and league office staff. Clay is now chairman of the Relocation Committee based upon his yeoman work on that committee and on the League Relations Committee. He's become an important person upon whom we rely for many things.
We had a long discussion about revenue sharing. Like all discussions on revenue sharing, it's in the language of diplomacy: It was open; it was frank; it was emotional in some cases, but it was good. And we are moving along in lock step with what we hope would be the successful conclusion of a Collective Bargaining Agreement to develop a plan for robust revenue sharing.
With respect to the Collective Bargaining Agreement, the board authorized the labor relations committee and particularly its chairman, Peter Holt, to communicate to the union a revised proposal, which will we'll do at the next meeting.
I called Billy Hunter and I spoke to him and told him we would be doing that and we would try to set up a meeting -- actually Adam Silver and I called Billy Hunter. That's now something that is going to be on the schedule.
What will happen is I think Peter will circulate some ideas based upon the discussion to the labor relations committee, and then he'll take that and he'll go with a proposal, what I would call the revised proposal.
With that, I'm happy to take it any questions.
Q. What is your overall take, you go into the playoffs with all of the positives but at the same time with the threat of a lockout; just your overall take on how that can weigh on just fan sentiment and kind of where the NBA is right now.
COMMISSIONER DAVID STERN: Well, I think that fan sentiment into the playoffs, into the final s is going to be terrific, if we don't have a new Collective Bargaining Agreement by the end of the old agreement on June 30, I think the fans will be disappointed, in us and in the union.
So we are trying to be optimistic. We are coming up with a revised proposal and we are hoping for the best case.
If we don't, and there's a work stoppage, then you know, all we can do is tell our fans that we can't continue to operate under this system that we currently have. As good as the revenue production is and the fan response is, the financials tell the story that we lost $340 million last year, and we are on target to lose somewhere in the neighborhood of $300 million this year. It's nice to lose less each year, but it doesn't seem to be a quick path to profitability, and that's where we want to head.
Q. You said you were optimistic. Wonder if you can expand on that. Is the new proposal going to be substantially different? What gives you optimism?
COMMISSIONER DAVID STERN: I think, A, I'm an internal optimist. And B, I am hoping that the proposal will indicate to the players when Peter Holt and the committee finish with it, that there's some modicum off flexibility in our approach, and we are trying to engage the union in a dialogue. And you know, we are now going to see whether we can meet after we get this revised proposal out as often as possible.
Q. For Stu and Ron, how would you evaluate how your referees have officiated Dwight Howard? And as a follow up, do you believe that the ten-second free throw violation rule has been inconsistently enforced?
RON JOHNSON: Let me start with the rule for free throws. Of course, we all know the rule is ten seconds allowed for a player to shoot a free throw; if not, it's a violation.
We can do better enforcing that rule. It's an ugly thing when it takes a player longer than ten seconds, and we plan to enforce that rule. It's a rule that everybody is aware of. It's one that infrequently occurs, and one that infrequently, therefore, become a violation.
I will let Stu talk to how we are refereeing on the Orlando player that you mentioned because he's got oversight across the entire league.
STU JACKSON: Could you repeat the first part of your question?
Q. Yes. How do you evaluate how referees have officiated Dwight Howard this season? As you've you're have heard Stan Van Gundy several weeks ago, there has been criticism for the referees saying that it seemed impossible to him that opponents did not commit any flagrant fouls against Howard during the regular season.
STU JACKSON: Yes, I think front-court players and players the size of Dwight Howard are always a challenge to officiate. However, with respect to Stan's assertion that he had not received a flagrant foul, it's not uncommon for post players to be at the lower end of players that receive flagrant fouls.
Generally players that get flagrantly fouled are typically more slasher-type players. While Dwight leads the league in terms of fouls drawn, the location on the floor and the type of player that he is, lends itself to fouling, but not of the flagrant variety.
For instance, if you look at the player that has drawn the most flagrant fouls in the league, it's Blake Griffin. And while he's a front-court player, and the style of play is that generally he takes the ball from the wing to the basket far more frequently than a post player would.
If you look at the next four players that have drawn the most flagrant fouls in the league, which are your Parker, Kirilenko, West and Garnett, they, too, are slashing-type players. So while we understand that he gets fouled a lot, he doesn't get fouled in the manner that players from the perimeter generally do.
Q. Can you talk about what you specifically are approaching the union within terms of this revised proposal? Is there an area where you are conceding the hard cap percentage? Can you elaborate a bit?
COMMISSIONER DAVID STERN: I can't, because that would be saying something before it was delivered to the union, and it's not final, in final form. There were lots of views expressed to the labor relations committee to shape it, and then it will be forwarded to the union.
I'm really just reporting on that's what the board authorized. I really can't. It would be disrespectful of me to get into any discussion of a proposal that has not been delivered.
Q. If I could just follow-up then, you had mentioned you discussed the issue of revenue sharing. Is there a possibility that there are ways in which you can address the financial concerns through revenue sharing?
COMMISSIONER DAVID STERN: No, I think that revenue sharing goes to sustainability and the ability of all teams to compete. It's an easy slogan, but it is true, that you cannot revenue share your way to a sustainable business model.
If the league overall is in a profit situation, you can smooth out the issues of profitability versus losses. But if the league is in even up to a break even, even there, then you would be asking all of the teams that are making money to give all of that money to all of the teams that are not making money; so that everybody would be working as hard as they work; they would just break even.
So revenue sharing is an important part growing forward, because we believe that it will enable all teams to economically compete. Some of our proposals with respect to player issues are also designed to make the league more competitive, but I don't -- but those are out there, and I don't want to discuss them at length. But our issues are not solved by revenue sharing.
Q. I wondered on both sides of the Kings situation, in their presentation, did they do anything to allay some of the concern that seems to be out there about their financial viability long term? And on the flipside of that, Mayor Johnson obviously bringing Mr. Burkle into the fray, what genuine potential is there for impact with him being part of their proposal?
COMMISSIONER DAVID STERN: Actually the owners heard -- with respect to Mr. Burkle, the owners heard that. But they really were more focused on Mayor Johnson's delivery that talked about enhanced sponsorship revenue, enhanced season ticket sales, and enhanced prospects for a building. There was no discussion of the Kings financial condition.
As it related to Anaheim, it was a discussion of certain areas having to do with the contractual relationship between Mr. Samueli's organization and the Kings, having to do with the building, having to do television revenue, and really, having to do with upgrades that have to be done, substantial upgrades to the Honda Center to both comply with NBA operation standards and to enhance the fan and revenue generating experience at the Honda Center.
Q. Obviously the Sacramento situation has been disappointing for all involved; the league clearly wishes something would have gotten done there. But is there any hesitancy on the of the league to enter the Anaheim market for all of the reasons, clearly Dr. Buss is not a fan of it and some of the other owners; on the league's view, any hesitancy at all there?
COMMISSIONER DAVID STERN: On the league's view, if the application gets dropped on Anaheim -- for Anaheim, if it's made, there is a detailed procedure in our Constitution which talks about analyzing whether it can support a third team; and what the prospects are with all of the other teams that are in the market and all of the other teams that will come in or are likely to come in in terms of an NFL team.
But that's the only concern. There will not be any consideration with respect to impact on existing teams; assuming the finding is made that the team can -- the third team can be supported by the market.
Q. Just wanted to ask you where does the pursuit of the local ownership stand with the Hornets?
COMMISSIONER DAVID STERN: I think it's fair to say that we are not pursuing local ownership at this time. The direction that Jac Sperling and Hugh Weber are taking is to make this team desirable for local ownership or ownership that intends on keeping it in New Orleans.
And we spent time explaining to the audit committee and explaining to the board that we operated this year within the proposed budget when we bought it, actually improved a little bit.
And next year, we are aiming with the "I'm In" campaign with the new sponsorship sales, with a season ticket drive and with a very consequential assist from the mayor and Governor, both who have been great, as well as the business council and the community, that we are trying to polish up this apple to make it something that multiple investors will want to keep in New Orleans.
I'm not suggesting it's going to be the easiest thing we have ever done, but we are intent on doing that and we are working very hard at it. But so when people call and express an interest, we say terrific, we'll take you to a game, take you to a meal and put you in the queue so that we can be ready to talk to you when we are ready for this asset to be sold.
Q. As far as like the negotiations with the state, has it reached a point beyond just the feeling-out process? And the second question to that, the "I'm In" campaign, were you impressed with the attendance situation there this season or do you feel that that campaign is going to increase?
COMMISSIONER DAVID STERN: We need to increase attendance. But we are seeing some very good signs with respect to season ticket sales. And that's what our attendance issues always start within all markets, because once you start with a base of season tickets and then you go to full-season equivalents and then you go to groups and then you go to single game tickets, I think that we are doing well on both renewals and new tickets.
I'm very impressed with the "I'm In" campaign and the support that it's gotten. And I don't want to characterize the discussions with the Governor and the mayor, other than to say that they have indicated to us that, you know, within the confines of the other issues that they are dealing with, they want to be as helpful as they can be; and I am positive that they will be.
Q. There was some surprise when people heard that Clay Bennett was on the committee today; can you explain how that decision was made?
COMMISSIONER DAVID STERN: Right, the committee was appointed and he was on it, and we had him appointed as chairman. And he has stepped up to become quite involved in the issues with Anaheim, with Sacramento. And frankly, he's been doing such a heavy lifting with respect to labor relations and its participants; and he's a very willing participant in league Board of Governor affairs, that it seemed like a good idea to lean on him on this one.
Q. You don't think there's any kind of conflict or anything like that; that he recently moved a team?
COMMISSIONER DAVID STERN: I don't think there's any conflict at all. It might help maybe if he gets into negotiations with Sacramento.
Q. In what regard?
COMMISSIONER DAVID STERN: Well, what would the conflict be?
Q. Well, I mean --
COMMISSIONER DAVID STERN: What's your issue with respect to an alleged conflict?
Q. No, a lot of people, I'm reading across Twitter and everything, people are surprised that someone who moved the team would be in charge of the relocation committee.
COMMISSIONER DAVID STERN: And that's what I said. Maybe Sacramento will think the same thing you do; although I don't; that he favors movement. In this case, he favors what's best for the league and the Kings.
Q. Out of all of the cities, why are the Maloofs choosing Anaheim, and how do you think a team will do in that market?
COMMISSIONER DAVID STERN: Well, my own personal view is they are choosing it because it is a huge market. It has a significant population. Even if you put up -- in some ways, even though as a television matter, it's part of the L.A. market, I think you're going to find that if you put a wall up, L.A., it's still a very substantial market. It's one of the sizable markets in the NBA, and has as, we were told, it has important offices of big companies and small companies and companies that employ lots of people. It has an interested fan base.
I can tell you all this because I have just sat through a presentation on it. So I can understand why the Ducks are located there and why people would think it would be a good sports market.
Q. What upgrades need to be done to the Honda Center to bring it up to NBA standards?
COMMISSIONER DAVID STERN: Well, there are two different sets. One is locker rooms -- one is driven by our needs for locker room and referee locker room, player locker room, visitor locker room, and also media amenities; we do worry about the media and wireless and all kinds of things like that.
The second one had to do more with restaurants, clubs, essential escalators, things that we would want in a new building, and in this case, this is a building that's getting to be 20 years old. And for a team to be in it, we feel that for the long haul, it needed to be -- certain improvements needed to be made. It's really not fair to call them upgrades as much as improvements that would be good for all the tenants in the building.
Q. So what's stopping the Maloofs for upgrading their building in Sacramento or building a new one there?
COMMISSIONER DAVID STERN: Well, you'll have to check the record. They have been trying to get a new building built for the last decade and they have been having problems with it. It hasn't been successful.
Q. What did you hear from board here today, was it from the Maloofs or from Anaheim or from the mayor's office that made you feel you had to extend the deadline?
COMMISSIONER DAVID STERN: No, it's not what I didn't hear; it's what I did hear. From both sides. They really wanted to understand what Mayor Johnson was talking about with respect to various changes in the fortunes of a new building campaign, and the changes in how the team would be favorably impacted by sponsorships and ticket sales.
The mayor, you know, really understood that Arco is -- excuse me, Power Balance Arena is not the arena of the future; and that Sacramento has to face up to the issue that when Arco no longer is around; and it's on its last legs now; the NCAA won't even use it to host tournaments; that Sacramento will be the 20th city in the country. So it will be the 20th largest market, and it will be the only one of those 20 not to have any entertainment and sports center.
So, you know, and with respect to Anaheim, the various arrangements and the like had not been fully buttoned down. They were changing a little bit in the last few days, and so the committee wanted to study more about what the Anaheim final arrangements looked like.
And so it seemed smart to put off the application for a bit, and that's what Glen Taylor, who is the chairman of the board, and Clay Bennett, chairman of the committee, asked me to do. And so I did it by asking for a motion at the Board of Governors, and it passed unanimously.
Q. You've obviously gone down this road many times with Sacramento in terms of trying to find a new building. Did Mayor Johnson say anything today that would give you any indication that that aspect of it is definitely different now or is definitely possible now where it has not been possible for so long?
COMMISSIONER DAVID STERN: Actually I would say that the mayor, together with the ICON group that he brought in, Tim Romani; the mayor was persuasive in telling the committee that there seems to be an intensity that makes it the most intense time of interest in the community that he has seen; and that he thinks there may be some intelligent way to consider an arena project at a downtown site where the city owns land, where the federal government is supporting something called an intermodal, and so the owners wanted to know more.
Q. Given the situation with Kobe Bryant this week and Boston having covered a player who is kind of known for his on-court banter, would there be any adjustments to in the game conversations amongst players, officials? Is that something that will be addressed? Will there be any words that will be on a list that can't be said? Will there be any adjustments given what's happened this year with a lot of players' words being picked up by Twitter and by fans, etc.?
COMMISSIONER DAVID STERN: I don't think so. Not that I'm aware of. Our rules are what they are. You know, for the most part, our players conduct themselves in the manner that we would like them to conduct themselves.
Kobe apologized for his insensitive remarks. I think he understood it. He was severely penalized, and we are ready to move on without spending too much time on the subject that you just outlined.
Q. Do you believe is there kind of a perception or belief that what happens in the game, some of that stuff has to be kind of like excused because of the intensity of the game?
COMMISSIONER DAVID STERN: No. But I don't know what you're referring to.
Q. Just trash talk language, that type of thing; that maybe fans can overhear, four-letter words, that type of thing.
COMMISSIONER DAVID STERN: No. Our players have a pretty good idea of what and how they are supposed to conduct themselves, even on the court and around the fans. But if something that a player says gets picked up, then he's at risk, and our players know that. And that's the way it's always been.
Q. With the NHL lockout a few years ago, something like one-third of the teams actually lost less money when there were no games, no players to be paid. Can you address how the NBA's situation is or isn't like that? Do you have any teams that would be in that situation, and if so, how many?
ADAM SILVER: We do have teams that are in that situation. I won't say the precise number, but there are several that will do better financially if we are not playing.
Having said that, it is absolutely our goal to get a deal, and even those teams that in the short term would do better on a P&L by not playing, I'm sure would still prefer to be playing, and to be building their business. And there's no doubt from a league-wide standpoint, we will do enormous damage to ourselves if we are not playing.
So while that is true, then some teams in the short term will do better if they are not paying players salaries for that season. Our goal still is to not have a work stoppage and to get a deal done for next season.
FastScripts Transcript by ASAP Sports