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February 13, 2010
COMMISSIONER STERN: Thanks, everyone for being here, and welcome to Dallas. I'm happy to be here. We've had a great week. As I've said on many occasions, North Texas is the basketball capital of the wormed, and I have a few that you-s I want to deliver to Mark Cuban, Terdema Ussery and the entire Mavs organization and Jerry Jones and the entire cowboys organization and to Mayors Tom Leppert, Robert Cluck and Michael Moncrief of Dallas, Arlington and Fort Worth respectively. The cooperation that we have received in this area has been great. Don't ask me about the weather because we never noticed it.
On Sunday, we are going to set a Guiness Book of records number with something in excess of 90,000 people in a beautiful stadium that is one of a kind, and we are really excited about that.
Our game as we come into this weekend is in terrific shape. Stu Jackson led a meeting of the competition committee yesterday, and the report was that our shots are up, our percentages are up, our scoring is up, the fast pace of our game is being enjoyed by our fans, our ratings remain strong, and actually, our attendance -- and it is doing better this season than we were actually projecting it. We are going to be down a little under two percent and in this environment, that's really very good.
The game on the floor, watch our rookies, watch our sophomores, watch our All-Stars, watch our first-time All-Stars; it's really, you know, quite extraordinary. It's a lot of fun. It's a good time to be commissioner in the NBA.
Internationally, the interest remains strong, and here we are as the capital; when I say the basketball world, I really do mean it. We are going to be in 215 countries with our events and television. We are going to be in 41 languages, and in addition to that, we are hosting just about everybody, our international broadcasters, our international clientele, as well as domestic. What a time, what a great time.
We also are broadcasting more of these proceedings on NBA TV, which is approaching 50 million homes, more than ever before, and with NBA.com, more than ever before; the numbers I won't bore you with. Your eyes will blur. But the way our fans are consuming what we are doing is a surprise even to us, and that includes on a global scale. Because in addition to everything that's happened this year with NBA TV and with our television arrangements, we have also made available NBA League Pass broadband, which means you can get on your computer a League Pass in 200 different countries. So that's pretty exciting.
And I had a press conference this afternoon following the breakfast in which Christiane Amanpour shared her views on what's going on in the world with 500 of our guests. We had a press conference, a little reception announcing that we will be opening this month our first office in Africa, Amadou Gallo Fall, a long-time Mavs employee will be our vice president for Africa and be opening up that office for us.
And we had a reception with the federations who are in, I can't do justice to them but you know it was Nigeria, Tunesia, Morocco, Senegal, Angola, and you forget that we have been really lucky, we have had 25 players from Africa in this league. We have five or six -- I don't want to give away their complete identities, because some will be playing for Belgium and some will be playing for the U.K., and that was a very exciting event. And this year will also see us opening offices in India and in the Middle East, because the ultimate compliment to our players is that the world is really embracing our game and the way it's played, and that's what we are doing in a good way.
And Team USA is going to get ready soon to go to the World Championships in Turkey and the response to players wanting to represent their country has been robust.
So there you have it in terms of all of that, plus I just want to add that beyond the game, we have had a very successful week for NBA Cares. The caravan, the players who were in it from the NBA, the WNBA and the D League, the building of places to live, learn and play continues, and as well as the fitness clinics that have been conducted, as well. Our players understand how to give back, and they are doing a good job.
I guess -- is there anything I left out? (Laughter) I guess before I open it up to questions, I guess I should mention this thing about collective bargaining.
In August we began collective bargaining with our players. We have had, I'd say, two meetings -- well, now three, but before this weekend, two meetings with the entire committee, a couple of -- several additional meetings with smaller groups. And what we did in an early meeting was actually show the players the numbers that under score our current economic circumstances, both for this year, projected, and for all of the years under the existing deal. And basically, what those numbers showed, give or take, was this year we are projecting a league wide loss of about $400 million, and in each of the first four years of the deal, probably losses of a couple of a couple hundred million, at least $200 million a year.
And our response to the players was: We don't want to play any guessing games about that, all of the data which supports that will be made available to you. Certified financial returns, whatever you need, so that we can have a robust and open dialogue about how we are going to develop together a sustainable business model, and that's been what we wanted to do; based upon facts from which no one can hide. And that's been our mantra and that remains our mantra.
We had assured the players that we would deliver a proposal that was one that would lead to that sustainable business model and based upon the undisputed facts, and we delivered that, I'm reliably informed on January 29, and that was our first shot at how you do it; how you get to the result that we feel we need to get to.
We had our meeting yesterday. You know, it's interesting, if I can get a little personal, as Peter Holt, the chairman of our labor relations committee, a Texan says, "This is not my first rodeo." I don't even know that this may not be my ninth rodeo, or my tenth, I've been around this. So I would give yesterday's meetings high marks on the list of theatrical negotiations. Literally out of the handbook of Negotiating 101.
The lawyer was brought in to threaten us as a tactic to say we are going to -- the union is going to go away; that's going to make you bargain harder. The right adjectives were thrown around, and our proposal as appropriately denounced. Our response is you can denounce it, tear it up, you can burn it, you can jump up and down on it, as long as you understand that it reflects the financial realities of where we are. And if you would like to have your own proposal, as long as it comes back and deals with our financial realities, that's okay with us. That's fine with us. In fact, that's what we would like to do.
And we were actually pleased to see the stars come out, in effect, because we think that a tradition that has all of the players involved is a good tradition, and particularly, the superstars, because as I told them when I spoke to them in between practices of East and West; they lead our league, they are ultimately the reason our fans are here, and it's always good to see them in any context, because they are so important to us.
There was one issue, which I think I want to mention, and that is, because I was so offended by it, and that is that some of our so-called team executives have been quoted, as you might expect anonymously in the media, and saying disparaging things about our players.
If you know me, and you know our owners, that's not what we do. That's not us. And the players were upset with those quotes, which I find cowardly, if they were actually said. And if I ever found out who said them, they would be dealt with; they would be former, former NBA people, not current. And we assured the stars of that. I think that, you know, they had had those things blast e-mailed to them, etc. And I took pain to tell the players that they should give such credibility as you would expect to give something that cowardly and anonymous as it was, and as offended by this as the players were.
And that said, we now await a proposal from the players, and hopefully since we have 18 months or some number of months, and this rodeo will continue. We will manage to get to a place where we always get to. There is always a deal and we plan to make a deal this time, too. Are there any questions?
Q. Given that there is so much time left on this deal and given that probably the players were not going to like the proposal you made, why would you do it so close to All-Star and knowing it was going to take some attention away from this week?
COMMISSIONER STERN: You know, I read the paper yesterday, or this morning; it's almost a footnote. Although, I was only reading the Dallas paper. We told the players that Billy and I had agreed that we wanted to start early and then we gave the background, we gave the numbers, and we knew that the next time that we were all going to be in one place to get together was All-Star, so between the sides, we said, look, let's get on with it. We are all adults; we might as well deal with the facts, and we are only fact-based. That's it. It's not an issue for us.
Q. Doesn't sound like Billy wanted to make another proposal before this July and you wanted one before then --
COMMISSIONER STERN: I'm not going to tell. I never have told Billy how he should negotiate or how he wants to negotiate, any more than I tell his lawyer what words he uses to threaten us. That's their choice.
We have been, you know, myself, I have only been at this since 1966. I started when I was in a crib. (Laughter).
Q. Billy characterized the league as eager or intent on getting a deal before July 1 of this season, because of the free agent class coming up.
COMMISSIONER STERN: Not so. You know, our proposal spoke to July 1, 2011, 2011 and 2012, according to my lead negotiator, Adam Silver.
It would be great. I always thought that given the potential sort of changes that needed to be made, having an extra season to do it in, would make things a little easier for us. But the proposal that we gave was for the end of next season.
But we also said we could make certain adjustments if we did it sooner; but that's up to the players. We have no -- you know, we thoroughly understand that they have options and choices and that's up to them.
Q. We have all heard a lot of details about what your proposal to the union supposedly was, I don't know if you want to clarify: Rollback in salaries, retroactively, to fully guaranteed deals no exceptions, BRI down to 45 or lower for the players. What can you say about the details?
COMMISSIONER STERN: I could say a lot but I'm not going to because I am not going to negotiate in the media. Never have and I don't plan to.
Q. Would you say any of that is inaccurate?
COMMISSIONER STERN: I wouldn't say anything about it, other than to say that we need to make significant changes to deal with very substantial losses that are hundreds of millions of dollars.
And I would add one other thing that I think is worthy. I'm determined to actually change the revenue-sharing model in the NBA, as well, but we can't do it until we complete the negotiations.
But our goal for our teams, our players, but particularly our fans is to come up with a model that says that every NBA team can compete. We understand the difficulties that the current economic environment and other things, market size and the like, put on teams, but when we get to where we need to get to, there will be a very robust revenue sharing where teams will not be in a position to decline to compete because of money.
And that's a very important thing that we are doing and that we are doing in lock-step with our collective bargaining negotiations. As you can guess, those are, shall I say, interesting discussions, internally as well as externally but we have separated them into different committees. The planning committee is meeting early next month and the collective bargaining committee meets, and it's my job and Adam's job and Joel Litvin's, who shepherds the planning committee, to make sure that we keep everything going in the right direction, and that's what we are doing.
About details and the like, if the players want to do that, that's okay, but we said we are not going to do it.
Q. Can you go more in depth, who was the lawyer that came in from the players --
COMMISSIONER STERN: I don't want to further his career any more than he deserves. (Laughter) But if you would like to know, you can watch the NFL negotiations.
Q. Also in previous years you have been sitting next to Billy, is there anything to be read in a the fact that Billy is not sitting next to you?
COMMISSIONER STERN: Actually Billy declined our continuing invitation, but I can understand it.
Q. Wonder what your thoughts were about Bobcats ownership in regards to a sale?
COMMISSIONER STERN: I'm supportive. You want to know more? Such as?
Q. Curious what you think about the prospect of Michael buying the team?
COMMISSIONER STERN: I think that would be good, too. I'm in a good mood today. (Laughter).
I think that, you know, as I said at the Tech Summitt, it seems like years ago, but I guess it was yesterday, I think Bob would like to -- wanted to use the snow in Dallas to freeze the season so that the Bobcats would go right into the playoffs for the first time.
So I think they have done a good job of putting a team together. I like the level -- increased level of Michael's involvement and if Michael were to be a buyer that would be a good thing.
Q. Do you think it's inevitable, regardless of who buys, that a sale is going to happen?
COMMISSIONER STERN: Yes, I do. And I think that might happen sooner rather than later, within the next 60 days or so.
Q. Could you tell us if there is any interest to have a game in Mexico City or maybe in another city of the country?
COMMISSIONER STERN: Actually I'm not allowed to announce it, but the answer is as to Mexico City, there is great interest in having a game. Stay tuned, okay, along with Barcelona, along with Paris, along with London, along with Guangzhou and along with Beijing and along with Milan. But I am not allowed to announce it yet because we are negotiating and we are doing all kinds of interesting things, (laughter) so no announcements today.
Q. For this year you don't have cities and dates in México?
COMMISSIONER STERN: I'm not announcing that we are playing in Mexico City yet. (Laughter).
Q. My question stems for the selection process for the All-Star, not so much the fans, but when the coaches select, at what point will teams such as the Warriors -- Monta Ellis -- will be considered, even if their team is not in contention for the playoffs?
COMMISSIONER STERN: The coaches do the first selection, and then there's the -- then I get to select, you know, and the selections that we added were Chauncey Billups; you have a problem with that? (Laughter).
Q. Well, I don't have a problem, but I think players who play hard --
COMMISSIONER STERN: Chauncey, okay, you want to get into it here? (Laughter).
Q. I think Monta deserved a chance.
COMMISSIONER STERN: Monta was sort of injured. Having J-Kidd here in Dallas -- the commissioner has to have some prerogatives. I mean, no disrespect. We have a lot of new blood in All-Star. I've been given the list, running through it, the first time All-Stars, it's great.
Monta is having a great season, and we went down the list, and you know --
Q. Next time?
COMMISSIONER STERN: I have no doubt, next time, hopefully fans; if he has a full season like he's having now and the team continues to improve, he'll be here.
Q. You are aware that the game is growing back home in India; what plans do you really have to promote it?
COMMISSIONER STERN: Well, this past summer, you know, and in summers past, we have had Robert Parish, A.C. Green, Baron Davis do clinics and the like. The Commissioner of the Indian Basketball Federation, Hari Sharma, is here as my guest. We are talking about an entire grass roots program, and doing more in the schools in India where we are launching, or have launched, a Web site in English and Hindi and we will be making an announcement relatively soon about enhanced amplified broadcasting in India, as well, and we will go from there, once we have an office open and a little bit more sort of feet on the ground. That's different than pants on the ground I guess (laughter). Feet on the ground at the NBA. We are going to -- we are going, and we are going to have a very substantial presence in India.
And because we are being talked to by the market; we are being talked to by fans in India who want to see more, who like our broadband offering, as well, who want the Web sites in Hindi and the like. We are really responding as we are in Africa and as we are in our discussions in the Middle East.
Q. Understandably one of the things that Billy did not bring up yesterday was player conduct; the Gilbert Arenas situation, how much did that galvanize owners to make that part of collective bargain and the repercussions?
COMMISSIONER STERN: Not a wit. Not a wit. No discussion at all and no discussion internally.
We did what we had to do, and we -- and we are of one with the Players Association on the unacceptability of that conduct. And I don't think that anyone who gets caught in that situation again will be surprised with the swiftness and the strength of the response. So just not an issue.
Q. There's not a desire for ownership to have more of a say in what happens to the contracts after?
COMMISSIONER STERN: No. There's enough; we have adequate rights. We can deal with that without question.
Q. Billy described yesterday that the owner's proposal was torn up, I don't know if that was a euphemism for 'taken off the table,' using both terms, is that accurate in your mind or is your propose all still active in the discussion?
COMMISSIONER STERN: I don't know what that means. We are talking semantics and everyone around here knows that I am not anti-semantic. (Laughter) I don't know what to say. If they don't like it, you know, that's what counters are about. Speak to me, that's all. Off the table, on the table, under the table; I don't even understand it. The answer is, that it's their -- it's for them to make a proposal.
We told them, as far as we are concerned, the proposal was one way to get to the result that we need. There could be a hundred ways, and we welcome their attempt to deal with the ways that we can get through.
Q. Why do you feel that revenue sharing, changing the revenue sharing method should be separate from collective bargaining? Wouldn't some owners who are losing money be assuaged by changing that system and doing it all at once?
COMMISSIONER STERN: We are going to do it all at once. It's going to be when we have the new Collective Bargaining Agreement, there will be a new revenue-sharing model in place, as well, but there's a different set of issues that are internal that we are working our way through, and we actually have, I think it's fair to say, the support of the large-revenue teams that for the appropriate kind of revenue sharing that will be necessary at the conclusion of the bargaining negotiations.
So that's something we have always dealt with. We have a revenue-sharing plan. We have actually probably quadrupled the amount of money that's revenue-shared now, but there's more coming and that will be done in lock-step with the collective bargaining.
Q. Hall of Fame nominations came out yesterday, there have been criticisms in the fact that the Hall has given short-shrift to the NBA relative to college and international; wonder what your opinion is on the State of the Hall of Fame and if the league had any consideration of opening its own like college basketball?
COMMISSIONER STERN: No. As a matter of fact our view has been maybe to a fault, that one of the beauties of the Hall of Fame was that it represented everybody, and it had international men's women's college pro high school. And then FIBA went and opened its Hall of Fame; and the women opened theirs in Knoxville; and the colleges opened theirs in Kansas City.
But you know what, there's really only one Hall of Fame, and we are happy to support it. We think that the process has become a better process, and we are supporting the Hall of Fame.
Q. Are you pleased with what Jerry Colangelo has done?
COMMISSIONER STERN: How soon they forget. I think that the Hall is in very firm and good hands with Jerry Colangelo. I think he is doing nothing less than a spectacular job in USA Basketball and I think he will do the same job at the Hall of Fame and we are very happy with both of them.
Q. Can you just help us understand a little bit how the league has had such good attendance and ratings and all of these new international markets and yet hundreds of millions of dollars in losses?
COMMISSIONER STERN: You know, because of a couple of things. Our revenue generation has not been a problem. I mean, we are out there trying to raise revenue across the board.
The cost of that revenue has gone up dramatically. In attendance, we have teams now that are, No. 1, you know, maintaining their prices or cutting them; historically have added people to do customer service, group sales, enhance game presentation. And internationally, those initial dollars are very costly to come by.
We are out there; when you open an office and you ship people there and you do the investment spending; we have always investment spent and we are continuing to do that. But it's beginning to -- this economic environment, we are feeling it a little bit more. We have had cutbacks at the league, we have had cutbacks at the teams and reductions of expenses and the like.
The revenue side has not been the problem. I think it's been fair to say that the current business activities do not support the current structure, expense structure that we have.
Q. Are these things that get better with time? Is it a temporary problem?
COMMISSIONER STERN: No, I don't think so. I think that based upon the last several years, we have seen that the -- we have shown the players the facts, and at our current level of revenue devoted to players salaries, it's too high. I can run from that, but I can't hide from that, and I don't think the players can, either. Those are the facts, and that's what we are dealing with. We are fact-based. And so that's the story.
Enjoy Saturday night, enjoy the rest of the weekend and thank you for being interested.
End of FastScripts