Updated: Oct. 24, 2005, 12:41 PM ET
The ESPN Insider interview: David Stern
By Chris Sheridan
ESPN Insider
Editor's note: ESPN.com's new Insider columnist, Chris Sheridan, began his first week on the job with an hour-long interview with NBA commissioner David Stern. The wide-ranging conversation covered the explosion of technology, the NBA's plans for Europe, Asia and Latin America, the racial implications of the dress code, Stern's future and much more. The complete transcript follows.
Chris Sheridan, ESPN.com: In the year 2015, where do you see the league?
David Stern: Well, for us, we're sort of a triple play of the chain in sports. That's a bad word. I don't want to say the Holy Trinity, but there are three things that are going to occupy us.
One is the networks. You're going to see the same kind of network configuration, although the march and prominence of cable just continues, and I think that's sort of significant. There was a lot of commentary about the redistribution of network programming with this deal; now that commentary is over. The move of "Monday Night Football" to cable from network pretty much puts an explanation point on the migration.
The second is technology, and it's almost presumptuous to talk about which kind of technology because the developments are different every day.
I actually was looking back at a speech I gave in '97, and I was probably mentioning more than satellite even back then. But if you look at the development of technology, and yes, television is technology, we had over-the-air, then cable, then satellite, then digital cable, and of course video games and the Internet.
And the Internet really is multifaceted, because you can get in by dial-up, but of course high-speed Internet access, whether it's by cable, whether the satellite providers figure it out, whether it's by DSL through the phone companies, or whether through IPTV -- the phone companies laying fiber -- or it's through the power lines, because last week we were treated to articles about BPL, broadband over power lines. So there are now at least, for purposes of broadband ... four different high-speed technologies to get into your home.
And that doesn't even take account of the entire wireless phenomenon. ESPN has its own cell phone. Cell phones are distributed in a way where the projections by the end of the decade on a global basis are billions, and their screens are being reconfigured to give decent video. [That isn't] to suggest that our product should be viewed in its full length on cell phones, but the wireless environment is just changing everything.
The meetings we [have] now cover everything, they're about digital cable, satellite, networks. We just did a deal with T-Mobile ... we did a deal with Sirius satellite radio to become our exclusive satellite carrier, so this entire technology area is moving with so many different pieces, but that's the place where the one thing that is certain is that sports, or rather compelling content, is going to have a long life on both the traditional networks and the new networks, and the devices that are going to allow people to capture data anyplace and virtually on anything.
And that's really good for sports leagues. To define how that will be, I don't know how that's ultimately going to play out, I don't know because one day Steve Jobs announces the video iPod, and the next day there's an article about broadband over power lines, and then the next day someone says that the future is personal digital assistants, and the next day someone says it's cell phones.
So there's just an extraordinary opportunity, and for us that's not unrelated to globality, because those very same technological advances are bringing us to our audiences around the world in real time.
So there will be global developments by 2015, [though] I'm not prepared to say what they are because I don't know, but to me, the more likely series of developments [is] perhaps a series of leagues that perhaps see themselves affiliated with our development league as an offshoot of the NBA. I was just reading an article from the Japan Times, and an eight-team professional league in Japan is being formed, and they say it will be 12 teams by next year. We've had discussions with groups in Europe that would like to put development teams in Europe, not at the NBA level, but at the development-league level.
So I would say some parts of our business will look a lot like they do today, our arenas, our gates, our teams, our network distribution, some are wildly fuller because of technology and the way we communicate with our fans, and that encompasses us doing that on a global basis in a really extraordinary way that will be both [related to] technology and the ultimate strategy for tying the NBA in with the world of basketball outside the U.S.
Sheridan: What's going to keep you from having a team in Paris, Berlin and Barcelona 10 years from now?
Stern: The infrastructure is not there. The arena we play in in Paris is Bercy Arena. It's old, it's adequate, but it's not the kind of building that would generate the money.
Actually, I met with the mayor of Paris last week to talk about our visit to Paris [next year during training camp]. They need a new building, and I don't want to confuse our appeal to a small and growing base of fans with the ability to support 41 home games and an infrastructure that would allow the team to generate the revenues necessary to compete. I don't know where that critical point is that that would happen, but we're continuing to build.
Berlin, there's a plan for a building. Construction hasn't begun, but the land has been acquired and the building designer named.
London will have a state-of-the-art built in three years, but that's not necessarily the best market for the NBA. We'll have to see. But clearly they'll become more interested in basketball as the Olympics get closer.
So it's not there yet, but by 2015 I think that's a possibility. We'll have to see.
Sheridan: Would it be fair to say you're taking baby steps into Europe, trying a little here and there to try to figure out the best way?
Stern: Yes, but we don't see them as baby steps.
We're still doing development work. We're going to be having four NBA teams play exhibition games in Europe in '06, and they're going to play NBA teams and Euroleague teams. That's the next step in our evolution that says we're not only interested in the European market, but we're stepping it up. The same way we sent teams to do exhibition games in China in '04.
If truth be told, we're struggling to find some game opportunities in Latin America because there have been so many requests from down there. But we need to remember that it all comes out of the mother lode, which is here. So we have [had] to make sure our collective bargaining gets implemented, our network television arrangements get renegotiated, our arenas get built or rebuilt and our teams are in good financial shape, and our games gets sold to the fans in the markets, all of which are actually going swimmingly.
So we're proceeding on many different fronts at the same time.
Also, there's the beneficiaries of the Olympics, because basketball has become one of the tent poles of the Olympics in terms of tickets and worldwide interest, and that's very good for our game, and our development. You can expect that as a by-product of the Beijing Olympics that the NBA's presence in Asia will be enhanced and increased and lead to additional commercial opportunities.
Sheridan: I'm reading some hesitance of some kind. You're not hesitant to plunge forward into the future in a lot of areas in the U.S., whether it's moving games to cable, whether it's building arenas for the next century, but in terms of going global, maybe I'm misreading you, but...
Stern: You're misreading me. I just don't want to seem as certain, because fortunes have been lost by companies in, let's say, China.
So we're looking, and at the same time we're planting the seeds and growing the small plants. We're attempting to figure out what's the best place, because we tend to be an opportunistic organization. We never do exactly what we said we were going to do, because something new pops up that's even a better idea, and we grab it.
And so if you ask me about Europe, that's interesting. But it may be that Asia is actually a bigger play. So we're now working on exhibition games in Asia and Europe, and we're talking to people about league development in both places. So in fact, we have more irons in the fire than we've ever had, but I'm not ready to say that's the one that's going to ignite.
So we're not hesitant, we're actually making sure that we cover our bases. We don't want to overlook, for example, India, where a recent article said there will be 12 million satellite homes in 2012. And our manpower is not unlimited, so actually what you're seeing from us is so much opportunity, and trying to find a way to deal with it all at the same time.
I don't want to be pie in the sky, but I've never been more excited or more certain that the NBA's global growth will be extraordinary. I don't know when the ignition point is, but if you set the time at 2015, we will be spectacular by then.
And also, don't overlook Eastern Europe, which has a huge population base, is coming of age, is getting ready to move into the EU. So we find ourselves dealing with extraordinary opportunities. Everyone focuses on Turkey's movement possibly into the EU as an important issue. We have our important basketball issues, and Turkey's a great market for the NBA and for basketball in general.
The opportunity is actually overwhelming. We just don't want to jump too soon. And as long as it keeps increasing, which it does, and as long as we keep growing the opportunity, which we are, we think we're doing the right thing for our league, our players and our fans.
Sheridan: Can you put a number on how much your global fan base has increased?
Stern: The article in the Japan Times says that more people play basketball than play baseball and soccer in Japan. It's hard for me to imagine that. We don't quantify it because we don't have to.
The way we quantify it is to say that we just signed two more deals in China, so instead of having 14 we have 16, to get to regions that we never could before. We just signed a new deal in Brazil, we're in renewal negotiations in France and Spain, and we're in deep discussions in Russia and Eastern Europe.
So it's happening all over, and we're trying to hire up to meet the demand, but we're not quantifying it yet. We quantify it by television, by actually selling sponsorship time in international broadcasts to multinational companies that want to buy time, to product sales, which just continue to grow, and a lot of the times the problem is getting enough product into the market as the market will absorb. But we have trading partners whose job it is to do that, and every year, year after year, there are double-digit increases. And we're very happy with that.
And one of the things that always causes us to take a slowdown step is collective bargaining. Toward the end of last season we began to go into a neutral mode. We didn't schedule any exhibition games outside the U.S. other than Puerto Rico, because the disappointment outside the U.S. is as deep as it is inside the U.S. when you have a work stoppage. So we didn't do anything to raise expectations going into collective bargaining, but now that collective bargaining is concluded, we're all systems go and we're having almost round-the-clock meetings and discussions about selling our game.
Sheridan: Do you think you've ever plunged too quickly into things, such as taking a majority of games off network and putting them on cable?
Stern: If you look at the way the networks now compete, they talk about the 18-34 viewer, the 18-29 viewer...
Sheridan: But you've got to serve both your long-term, older fans and your younger fans.
Stern: Over time, fans find you where you are. ESPN now has "Monday Night Football," and I don't think that's going to hurt the NFL.
We knew over time that it wouldn't hurt us, but we were able to take advantage of the superior cash flow of cable to get our own increase,and really presage the migration of increasing numbers of fans to cable.
Fans know where to find everything. Whether it's a Spielberg movie or other programming, you name it, on the SciFi Channel, or a great show on the History Channel or another segment of "The Sopranos," the ratings go through the roof.
The distinction between cable and network is being blurred, even among the baby-boomer generation that is now 60. They're tech-savvy. Given the pickup of Internet utilization, mobile phones and the like, it's not an issue.
And we were first. We took a lot of uninformed heat on it, but that's OK. Every radio and television host became a broadcasting maven, but none of them said, 'Oh, isn't that interesting?' The most important programming in the history of U.S. sports, "Monday Night Football," just went from over-the-air to cable, and it went without a peep because people have been primed for that.
The networks understand that given the dual revenue streams of cable over over-the-air television, that's where the money is going to be, and that's where viewers will turn to get their programming.
Sheridan: I agree that your fans know where to find you, but casual fans or people just looking for something to watch...
Stern: On Sunday afternoons they will turn to ABC, and we'll be on as many Sundays as we've ever been on. From the January game through the regular season, we will have every Sunday covered except on All-Star Weekend.
And between cable and satellite, we're building our audience. Because the reality is that every year, one of those kids that grew up on cable is now moving into adulthood. We're the sport of the future then, because they're all growing up on ESPN and TNT, so it's not a concern for us at all.
Sheridan: How hard is it to strike a balance between providing for your fans who are 18-40 and taking care of the long-term fans over 40 who are more ingrained in their habits.
Stern: We think we're able to achieve both.
If you look at it, our ESPN audience is one grouping, the TNT audience is a little bit different, the ABC audience is a little bit different yet, and the NBA TV audience is even a little bit slightly different than all three. The in-arena attendance, 23 million, is a little different yet. Older.
We have shoulder programming we create for additional networks. The History Channel has NBA programming. We did programming for the Food Network. We have NBA interactive events, going to county fairs in non-NBA markets where people who go with their kids might never go to an NBA game but like it on television.
So there's a huge mosaic of things that we do. We don't trumpet them. We just do them. Last week we were at the Mississippi State Fair. It was a beautiful setup. Six hundred thousand people came through that fair. They got a chance to shoot baskets with Bailey Howell.
So, that's ongoing, and we do really find ways to reach out to a lot of different areas.
Sheridan: On the dress code, some of the black players have taken offense to different aspects of the dress code, and it's got to be tricky for you, as a white man, to implement a rule but try not to offend the sensitivities of black people to being told "dress this way" or "act this way." How difficult is that for you, and do you think it worked out for you in this case? Did you press buttons that could have been pressed more softly?
Stern: Not difficult at all. We pressed the buttons as soft as we possibly could.
We had a lot of discussion, we decided not to do a jacket and tie. We have loads of teams with much more stringent dress codes. We're talking about a shirt with a collar, a pair of jeans or slacks and a pair of shoes. Hardly onerous.
And actually I feel pretty good because this is a league where 57 cents of every dollar that we're able to generate goes to the players, and we've generated a fair amount of dollars so that our players are now the highest-salaried players of them all. And the notion is that if you're a professional, with it are certain protocols, one of them is the way you dress when you're on business.
Our players are off a lot, certainly in the offseason, and when they're not playing or traveling, this [dress code] doesn't affect that, and they can feel free to express themselves the same way that all corporate America expresses itself, putting on shorts and sandals and a ratty old T-shirt and doing what you do.
Certainly it makes for spectacular copy, and clearly the media doesn't enjoy following all the players, the majority of them, who say, "What's the big deal? That's the way I dress already, and that sounds fair enough. We're all in this together."
But it's such a delicious issue that it will get a lot of ink.
I like it because it allows me to tell you that our players have announced an initiative called NBA Cares. No one would have even picked that up, but we're getting mentioned in the articles as a throwaway. If I held a press conference to announce NBA Cares, it might make it into the agate, the transactions.
I understand people's sensitivities, but we're in this together, and I think the NBA's track record speaks for itself.
Sheridan: The policy has been called "racist." Do people throw around a loaded word like that too easily?
Stern: Well, things involve race. Whenever you have a league in which some significant percentage is black, then things involve race. That's just the way it's going to be. When you have a league like the WNBA that has all women in it, you're going to end up with gender issues. That's just dependent on the composition of the league.
But there's a difference between involving race and having actions interpreted as racist.
Sheridan: Are you surprised by the way racism has been thrown into this debate?
Stern: No, because it was thrown into the issue of raising the entry age. That was an issue that was absolutely, positively about basketball, to have better players, older and more experienced, to have better business by being able to look at players a year later so you can tell whether you were making a good investment or not.
And frankly, given the percentage of all players who happen to be African-Americans, all it means is you'd be drafting and signing 19-year-old African-Americans instead of 18-year-old African-Americans. But at least in the media it became an issue that was somewhat involved with race.
Sheridan: But you yourself said you didn't want young people, preteens and 13- and 14-year-olds in urban America, to think that becoming a professional basketball player is a viable employment option for them when they get out of high school. And you said a lot of that was motivating your desire to raise the minimum age, get it out of kids' heads that "I can be the next LeBron James."
Stern: But the one thing I never wanted to do was to be viewed as telling a young person what was good for them.
In other words, this was based on the NBA's agenda. It wasn't social policy. The NBA was interested in not being viewed as being a magnet for kids coming out [of high school]. The NBA was making a business decision that it would be better to have kids a year older.
We were a little tired of getting abused by communities that think we were actively going out to reprogram their kids to become pro basketball players when they couldn't. To the contrary, if I had a magic wand I would say I hope everybody who's capable of it would go to college. But that's just for them, that's not NBA policy.
The NBA policy is we'll get older, more mature players, we'd make better judgments about basketball skills rather than making investments in guys that wouldn't pay off, but it's working, it's fine.
As you watch, the uproar over cable, the uproar over the game, the uproar over the dress code, these are things that are easy to read about, easily understood and delicious to write about. And we're the NBA, we're the place -- and that's the good news about the NBA -- we're the place where if you want to engage the world in a single conversation, there's always a safe place to do it in sports.
If you listen to the morning shows and you listen to the discussion, it's actually kind of a healthy discussion. "Should there be a limit? Should there be a professional dress policy? Should athletes be any different than other workers who know what is expected of them when they're on the job, in terms of dress ... or not?" I don't think it's a bad discussion. I think it's healthy, and it shows we have the capacity to engage.
Our season begins next Tuesday, and we've gotten as much ink on the dress policy than the preseason. But that shouldn't surprise us. Magic Johnson, Mahmoud Abdul-Rauf, Latrell Sprewell, Allen [Iverson's] rap record. It's the NBA, we're an accelerator, and actually, that's OK. We're live, unscripted drama, we're a soap opera, on the court and off the court, and we provide an awful lot of programming in both places to a lot of outlets, including yours.
Sheridan: How sensitive are you to not coming off as a dictatorial person or organization?
Stern: On the contrary, we've been getting a lot of internal heat from being too lenient. Dress jeans, a shirt, it's sort of like, "C'mon guys, show a little gumption."
Even there it's an interesting dialogue you're getting into regarding the nature of sports leagues. Our players, like other people, they have a job to do. And I don't think there are too many employers who don't set certain rules, and they're not necessarily viewed as dictators.
Sheridan: The jewelry part of it is what seems to be getting to some guys.
Stern: Our goal here is to project as professionals and to build upon the successes that have been entrusted to us and our players by everyone going back to George Mikan, Bill Russell, Dr. J, Elgin Baylor, to Larry Magic, Michael and Isiah.
Sheridan: Larry Bird was saying things went to a new low in a fashion sense last season, and Phil Jackson said guys were wearing "prison" clothing. Bird said he got more feedback from his fans on what his players were wearing than about how good ballplayers they were. Stern: But that's our fault, not the players'. In collective bargaining we said to the players, "Look guys, we've got this great group of guys who do as much or more as any other league or athlete, and nevertheless our reputation has taken a big hit, and we have to climb out of this together."
And we agreed. We agreed a dress code was something we had to do.
That's why in the collective bargaining agreement we said we're going to sign autographs, go to the season-ticket holders' functions, make additional appearances. It's just that maybe there are things we didn't have to tell an earlier generation. They just got it.
And maybe it's our fault that as we got younger, and certain mores changed, that we didn't tell them sooner and explain it earlier. And so you always have a readjustment. You have readjustment with rules, so as the game itself got a little rough or clogged, you change the rules, you enforce the rules, and the game opens up. I mean, there's a wide variety of issues like that.
If anything, you can hold us responsible for not doing this sooner rather than doing it [at all]. But for the vast majority of NBA players, it is not an issue. Sheridan: Why did your reputation take such a big hit last year because of the brawl? It was a bad brawl, looked horrible on TV, but why did it resonate so much, have so much staying power and almost became the defining moment of the season?
Stern: Actually, by the end of the season our reputation was very much on the uptick. That's a fact. We did the polls.
I think the brawl sort of became a flash point for a lot of feelings that are out there. With race, there's always an issue. And the brawl, unfairly, became the opportunity for the commentators to talk about all NBA players, although 450 of them were not involved in the brawl. "These people." "These thugs." "These punks." And that was a horrible sort of libel and slander of the NBA players. Images that ran were run in the context of a condemnation of all NBA players, and that really upset me. That became a critical flash point.
And so we've got to dig out from under that, and dig we must. Because at the same time our television ratings are strong, our attendance is strong, our businesses are all very good, and I actually think we're going to come out much stronger from it all.
Sheridan: So is that episode completely behind you?
Stern: Whenever you have a sport in America with a high concentration of African-Americans, there are always issues that are spilt.
We like to think that we [basketball people] are the ultimate egalitarians, you know, shirts and skins and "what have you got?" And that's been followed by our teams, who turn to whoever they think will help, without regard to race.
And we have a very effective business, which is based on exporting a league where the majority happens to be African-American. We feel pretty good about what we've been able to accomplish when all of those issues 25 years ago were hailed as likely to lead to our certain demise.
So the fact that there's an outcry about cable or a little bit of flutter about our dress code policy, that's the NBA. Welcome to our world. Go back and look at Abdul-Rauf, Sprewell, Kobe. It's fascinating. When you've been at it as long as I have, you tend to sort of see it in a broader perspective.
But it's really quite remarkable. Absolutely, flat-out, the best seat in sports is a courtside seat at an NBA game. You see the players, they probably step on you as they go by, and they're not wearing long pants or long sleeves as they go past. The camera catches that, and that's our strength. And that's why are players are such known players. And so when they do something, someone is able to put the face, name and act together more easily.
But hey, that's the way it is in a business that's going to generate $3 billion this year.
Sheridan: A few quick questions: Coach Krzyzewski for the U.S. team?
Stern: It's not official. I don't know anything about it.
I have confidence in what Jerry Colangelo does. He's a person who's devoted his life to basketball, he's made himself available to USA Basketball as managing director of the team, and I support whatever he does.
And obviously, the only thing I have against Mike K is when he was assistant coach of the Dream Team [and] he and Zina Garrison beat Clyde and me in tennis. I'll never forgive him for that. And then he told me I should play within my game. He gave me a coaching tip, which was correct -- which is why it ticked me off so much. But I think he's a good guy and a great coach.
Sheridan: As an American, what happened in the Olympics in Athens? How did it make you feel? Were you embarrassed? Were you saddened?
Stern: Actually, I felt badly for the American players because they couldn't have been prepared for the outpouring of animosity they met in the venues. They were really being asked to carry an extra burden that didn't make itself quite understood on the television screen, and they were doing it under a preparation system that was flawed given the advance of basketball around the world.
I was in Toronto ... when Maccabi Tel Aviv beat the Raptors, and Maccabi had a real team. I said to them, "I used to watch you guys and you were wooden, slow and non-American. Now you've got a 7-footer who can move, your backcourt used to play in the NBA, and you're well-coached and play as a team, and you're further along in the season than we are, so you're ready to go."
So, hey, the world really is catching up. So I don't buy the argument of our best players not going. We've had our best players there. That's not the issue. Everyone forgets Sydney, we had a team than included Alonzo, Antonio, Jason, Ray Allen, Kevin Garnett, Payton, Vince, and if Jasikevicius' shot goes in, we don't even medal. So people sort of forget what's going on or they don't want to hear it.
But I think it's great, even for the Americans. We're going to have some very motivated players who are going to be together longer, and they're not going to have any excuses. When you get beat, you get beat. The thing in sports, the best team is the one that has the higher score at the end of the game. Say what else you want, but that's the absolute beauty of sports. You can talk about how much better you are than the other team, but that's ridiculous. If you lost, you lost. That's it.
Sheridan: Which NBA team does it best. Who is the best owner?
Stern: I can't answer that. It wouldn't be fair to someone. There are a lot of ties for first. I'd rather encourage them behind closed doors ... than expose them to ESPN.
Sheridan: Who does in-game arena presentation best?
Stern: For years I've seen Phoenix do a good job. I think Dallas is a hoot, the Pistons do a good job, San Antonio.
But I must tell you, that would be a fair question three years ago, but given the work of our teams, where they have peer review, the bar has raised so high that the difference between 1 and 30 isn't there anymore as the gap it was.
Now that we share music, we share clips and share dance-team numbers, we share extra acts and the like through team marketing and the business-operations department of the NBA, the gap isn't what it used to be. Everyone is really much better.
But I spent a lot of time in Detroit and San Antonio, and I thought both teams did a very good job. There have been different approaches to the game -- I mean the Celtics are fabled in their approach -- and that's not really an issue anymore the way it used to be.
Sheridan: You sure the Hornets are moving back to New Orleans?
Stern: Yes.
Sheridan: Are you happy with the way that team has been run?
Stern: They're a work-in-progress, and they were a work-in-progress before Katrina. They have a new president, a new president of sales, a new ownership composition. There has been a complete turnover in the team, and in New Orleans this year it was going to be considerably improved and performing considerably better economically.
I think a great story this season is the way the people of Oklahoma City have stepped up and offered a temporary home to the Hornets, and the outpouring [of support]. They've been beyond reproach. They understand help, they understand tragedy, and they understand how this affects the resurrection of that city, and they've been great.
And I think by opening night we're going to be somewhere approaching 9,000 full-season equivalents. I'd have to double-check the numbers, but I think that's above the league average.
Sheridan: How long to you plan on staying in the job? Do you ever think about retirement or what you'll do when you retire?
Stern: I have no plans to retire. I absolutely love the job, and it changes in an interesting way every day, and it's actually becoming even more relevant, witnessed by my remarks on social responsibility. The wrestling with new technology and getting it right, and wrestling with the global opportunity. I think I've got the best job in the world.
The ESPN Insider interview: David Stern
By Chris Sheridan
ESPN Insider
Editor's note: ESPN.com's new Insider columnist, Chris Sheridan, began his first week on the job with an hour-long interview with NBA commissioner David Stern. The wide-ranging conversation covered the explosion of technology, the NBA's plans for Europe, Asia and Latin America, the racial implications of the dress code, Stern's future and much more. The complete transcript follows.
Chris Sheridan, ESPN.com: In the year 2015, where do you see the league?
David Stern: Well, for us, we're sort of a triple play of the chain in sports. That's a bad word. I don't want to say the Holy Trinity, but there are three things that are going to occupy us.
One is the networks. You're going to see the same kind of network configuration, although the march and prominence of cable just continues, and I think that's sort of significant. There was a lot of commentary about the redistribution of network programming with this deal; now that commentary is over. The move of "Monday Night Football" to cable from network pretty much puts an explanation point on the migration.
The second is technology, and it's almost presumptuous to talk about which kind of technology because the developments are different every day.
I actually was looking back at a speech I gave in '97, and I was probably mentioning more than satellite even back then. But if you look at the development of technology, and yes, television is technology, we had over-the-air, then cable, then satellite, then digital cable, and of course video games and the Internet.
And the Internet really is multifaceted, because you can get in by dial-up, but of course high-speed Internet access, whether it's by cable, whether the satellite providers figure it out, whether it's by DSL through the phone companies, or whether through IPTV -- the phone companies laying fiber -- or it's through the power lines, because last week we were treated to articles about BPL, broadband over power lines. So there are now at least, for purposes of broadband ... four different high-speed technologies to get into your home.
And that doesn't even take account of the entire wireless phenomenon. ESPN has its own cell phone. Cell phones are distributed in a way where the projections by the end of the decade on a global basis are billions, and their screens are being reconfigured to give decent video. [That isn't] to suggest that our product should be viewed in its full length on cell phones, but the wireless environment is just changing everything.
The meetings we [have] now cover everything, they're about digital cable, satellite, networks. We just did a deal with T-Mobile ... we did a deal with Sirius satellite radio to become our exclusive satellite carrier, so this entire technology area is moving with so many different pieces, but that's the place where the one thing that is certain is that sports, or rather compelling content, is going to have a long life on both the traditional networks and the new networks, and the devices that are going to allow people to capture data anyplace and virtually on anything.
And that's really good for sports leagues. To define how that will be, I don't know how that's ultimately going to play out, I don't know because one day Steve Jobs announces the video iPod, and the next day there's an article about broadband over power lines, and then the next day someone says that the future is personal digital assistants, and the next day someone says it's cell phones.
So there's just an extraordinary opportunity, and for us that's not unrelated to globality, because those very same technological advances are bringing us to our audiences around the world in real time.
So there will be global developments by 2015, [though] I'm not prepared to say what they are because I don't know, but to me, the more likely series of developments [is] perhaps a series of leagues that perhaps see themselves affiliated with our development league as an offshoot of the NBA. I was just reading an article from the Japan Times, and an eight-team professional league in Japan is being formed, and they say it will be 12 teams by next year. We've had discussions with groups in Europe that would like to put development teams in Europe, not at the NBA level, but at the development-league level.
So I would say some parts of our business will look a lot like they do today, our arenas, our gates, our teams, our network distribution, some are wildly fuller because of technology and the way we communicate with our fans, and that encompasses us doing that on a global basis in a really extraordinary way that will be both [related to] technology and the ultimate strategy for tying the NBA in with the world of basketball outside the U.S.
Sheridan: What's going to keep you from having a team in Paris, Berlin and Barcelona 10 years from now?
Stern: The infrastructure is not there. The arena we play in in Paris is Bercy Arena. It's old, it's adequate, but it's not the kind of building that would generate the money.
Actually, I met with the mayor of Paris last week to talk about our visit to Paris [next year during training camp]. They need a new building, and I don't want to confuse our appeal to a small and growing base of fans with the ability to support 41 home games and an infrastructure that would allow the team to generate the revenues necessary to compete. I don't know where that critical point is that that would happen, but we're continuing to build.
Berlin, there's a plan for a building. Construction hasn't begun, but the land has been acquired and the building designer named.
London will have a state-of-the-art built in three years, but that's not necessarily the best market for the NBA. We'll have to see. But clearly they'll become more interested in basketball as the Olympics get closer.
So it's not there yet, but by 2015 I think that's a possibility. We'll have to see.
Sheridan: Would it be fair to say you're taking baby steps into Europe, trying a little here and there to try to figure out the best way?
Stern: Yes, but we don't see them as baby steps.
We're still doing development work. We're going to be having four NBA teams play exhibition games in Europe in '06, and they're going to play NBA teams and Euroleague teams. That's the next step in our evolution that says we're not only interested in the European market, but we're stepping it up. The same way we sent teams to do exhibition games in China in '04.
If truth be told, we're struggling to find some game opportunities in Latin America because there have been so many requests from down there. But we need to remember that it all comes out of the mother lode, which is here. So we have [had] to make sure our collective bargaining gets implemented, our network television arrangements get renegotiated, our arenas get built or rebuilt and our teams are in good financial shape, and our games gets sold to the fans in the markets, all of which are actually going swimmingly.
So we're proceeding on many different fronts at the same time.
Also, there's the beneficiaries of the Olympics, because basketball has become one of the tent poles of the Olympics in terms of tickets and worldwide interest, and that's very good for our game, and our development. You can expect that as a by-product of the Beijing Olympics that the NBA's presence in Asia will be enhanced and increased and lead to additional commercial opportunities.
Sheridan: I'm reading some hesitance of some kind. You're not hesitant to plunge forward into the future in a lot of areas in the U.S., whether it's moving games to cable, whether it's building arenas for the next century, but in terms of going global, maybe I'm misreading you, but...
Stern: You're misreading me. I just don't want to seem as certain, because fortunes have been lost by companies in, let's say, China.
So we're looking, and at the same time we're planting the seeds and growing the small plants. We're attempting to figure out what's the best place, because we tend to be an opportunistic organization. We never do exactly what we said we were going to do, because something new pops up that's even a better idea, and we grab it.
And so if you ask me about Europe, that's interesting. But it may be that Asia is actually a bigger play. So we're now working on exhibition games in Asia and Europe, and we're talking to people about league development in both places. So in fact, we have more irons in the fire than we've ever had, but I'm not ready to say that's the one that's going to ignite.
So we're not hesitant, we're actually making sure that we cover our bases. We don't want to overlook, for example, India, where a recent article said there will be 12 million satellite homes in 2012. And our manpower is not unlimited, so actually what you're seeing from us is so much opportunity, and trying to find a way to deal with it all at the same time.
I don't want to be pie in the sky, but I've never been more excited or more certain that the NBA's global growth will be extraordinary. I don't know when the ignition point is, but if you set the time at 2015, we will be spectacular by then.
And also, don't overlook Eastern Europe, which has a huge population base, is coming of age, is getting ready to move into the EU. So we find ourselves dealing with extraordinary opportunities. Everyone focuses on Turkey's movement possibly into the EU as an important issue. We have our important basketball issues, and Turkey's a great market for the NBA and for basketball in general.
The opportunity is actually overwhelming. We just don't want to jump too soon. And as long as it keeps increasing, which it does, and as long as we keep growing the opportunity, which we are, we think we're doing the right thing for our league, our players and our fans.
Sheridan: Can you put a number on how much your global fan base has increased?
Stern: The article in the Japan Times says that more people play basketball than play baseball and soccer in Japan. It's hard for me to imagine that. We don't quantify it because we don't have to.
The way we quantify it is to say that we just signed two more deals in China, so instead of having 14 we have 16, to get to regions that we never could before. We just signed a new deal in Brazil, we're in renewal negotiations in France and Spain, and we're in deep discussions in Russia and Eastern Europe.
So it's happening all over, and we're trying to hire up to meet the demand, but we're not quantifying it yet. We quantify it by television, by actually selling sponsorship time in international broadcasts to multinational companies that want to buy time, to product sales, which just continue to grow, and a lot of the times the problem is getting enough product into the market as the market will absorb. But we have trading partners whose job it is to do that, and every year, year after year, there are double-digit increases. And we're very happy with that.
And one of the things that always causes us to take a slowdown step is collective bargaining. Toward the end of last season we began to go into a neutral mode. We didn't schedule any exhibition games outside the U.S. other than Puerto Rico, because the disappointment outside the U.S. is as deep as it is inside the U.S. when you have a work stoppage. So we didn't do anything to raise expectations going into collective bargaining, but now that collective bargaining is concluded, we're all systems go and we're having almost round-the-clock meetings and discussions about selling our game.
Sheridan: Do you think you've ever plunged too quickly into things, such as taking a majority of games off network and putting them on cable?
Stern: If you look at the way the networks now compete, they talk about the 18-34 viewer, the 18-29 viewer...
Sheridan: But you've got to serve both your long-term, older fans and your younger fans.
Stern: Over time, fans find you where you are. ESPN now has "Monday Night Football," and I don't think that's going to hurt the NFL.
We knew over time that it wouldn't hurt us, but we were able to take advantage of the superior cash flow of cable to get our own increase,and really presage the migration of increasing numbers of fans to cable.
Fans know where to find everything. Whether it's a Spielberg movie or other programming, you name it, on the SciFi Channel, or a great show on the History Channel or another segment of "The Sopranos," the ratings go through the roof.
The distinction between cable and network is being blurred, even among the baby-boomer generation that is now 60. They're tech-savvy. Given the pickup of Internet utilization, mobile phones and the like, it's not an issue.
And we were first. We took a lot of uninformed heat on it, but that's OK. Every radio and television host became a broadcasting maven, but none of them said, 'Oh, isn't that interesting?' The most important programming in the history of U.S. sports, "Monday Night Football," just went from over-the-air to cable, and it went without a peep because people have been primed for that.
The networks understand that given the dual revenue streams of cable over over-the-air television, that's where the money is going to be, and that's where viewers will turn to get their programming.
Sheridan: I agree that your fans know where to find you, but casual fans or people just looking for something to watch...
Stern: On Sunday afternoons they will turn to ABC, and we'll be on as many Sundays as we've ever been on. From the January game through the regular season, we will have every Sunday covered except on All-Star Weekend.
And between cable and satellite, we're building our audience. Because the reality is that every year, one of those kids that grew up on cable is now moving into adulthood. We're the sport of the future then, because they're all growing up on ESPN and TNT, so it's not a concern for us at all.
Sheridan: How hard is it to strike a balance between providing for your fans who are 18-40 and taking care of the long-term fans over 40 who are more ingrained in their habits.
Stern: We think we're able to achieve both.
If you look at it, our ESPN audience is one grouping, the TNT audience is a little bit different, the ABC audience is a little bit different yet, and the NBA TV audience is even a little bit slightly different than all three. The in-arena attendance, 23 million, is a little different yet. Older.
We have shoulder programming we create for additional networks. The History Channel has NBA programming. We did programming for the Food Network. We have NBA interactive events, going to county fairs in non-NBA markets where people who go with their kids might never go to an NBA game but like it on television.
So there's a huge mosaic of things that we do. We don't trumpet them. We just do them. Last week we were at the Mississippi State Fair. It was a beautiful setup. Six hundred thousand people came through that fair. They got a chance to shoot baskets with Bailey Howell.
So, that's ongoing, and we do really find ways to reach out to a lot of different areas.
Sheridan: On the dress code, some of the black players have taken offense to different aspects of the dress code, and it's got to be tricky for you, as a white man, to implement a rule but try not to offend the sensitivities of black people to being told "dress this way" or "act this way." How difficult is that for you, and do you think it worked out for you in this case? Did you press buttons that could have been pressed more softly?
Stern: Not difficult at all. We pressed the buttons as soft as we possibly could.
We had a lot of discussion, we decided not to do a jacket and tie. We have loads of teams with much more stringent dress codes. We're talking about a shirt with a collar, a pair of jeans or slacks and a pair of shoes. Hardly onerous.
And actually I feel pretty good because this is a league where 57 cents of every dollar that we're able to generate goes to the players, and we've generated a fair amount of dollars so that our players are now the highest-salaried players of them all. And the notion is that if you're a professional, with it are certain protocols, one of them is the way you dress when you're on business.
Our players are off a lot, certainly in the offseason, and when they're not playing or traveling, this [dress code] doesn't affect that, and they can feel free to express themselves the same way that all corporate America expresses itself, putting on shorts and sandals and a ratty old T-shirt and doing what you do.
Certainly it makes for spectacular copy, and clearly the media doesn't enjoy following all the players, the majority of them, who say, "What's the big deal? That's the way I dress already, and that sounds fair enough. We're all in this together."
But it's such a delicious issue that it will get a lot of ink.
I like it because it allows me to tell you that our players have announced an initiative called NBA Cares. No one would have even picked that up, but we're getting mentioned in the articles as a throwaway. If I held a press conference to announce NBA Cares, it might make it into the agate, the transactions.
I understand people's sensitivities, but we're in this together, and I think the NBA's track record speaks for itself.
Sheridan: The policy has been called "racist." Do people throw around a loaded word like that too easily?
Stern: Well, things involve race. Whenever you have a league in which some significant percentage is black, then things involve race. That's just the way it's going to be. When you have a league like the WNBA that has all women in it, you're going to end up with gender issues. That's just dependent on the composition of the league.
But there's a difference between involving race and having actions interpreted as racist.
Sheridan: Are you surprised by the way racism has been thrown into this debate?
Stern: No, because it was thrown into the issue of raising the entry age. That was an issue that was absolutely, positively about basketball, to have better players, older and more experienced, to have better business by being able to look at players a year later so you can tell whether you were making a good investment or not.
And frankly, given the percentage of all players who happen to be African-Americans, all it means is you'd be drafting and signing 19-year-old African-Americans instead of 18-year-old African-Americans. But at least in the media it became an issue that was somewhat involved with race.
Sheridan: But you yourself said you didn't want young people, preteens and 13- and 14-year-olds in urban America, to think that becoming a professional basketball player is a viable employment option for them when they get out of high school. And you said a lot of that was motivating your desire to raise the minimum age, get it out of kids' heads that "I can be the next LeBron James."
Stern: But the one thing I never wanted to do was to be viewed as telling a young person what was good for them.
In other words, this was based on the NBA's agenda. It wasn't social policy. The NBA was interested in not being viewed as being a magnet for kids coming out [of high school]. The NBA was making a business decision that it would be better to have kids a year older.
We were a little tired of getting abused by communities that think we were actively going out to reprogram their kids to become pro basketball players when they couldn't. To the contrary, if I had a magic wand I would say I hope everybody who's capable of it would go to college. But that's just for them, that's not NBA policy.
The NBA policy is we'll get older, more mature players, we'd make better judgments about basketball skills rather than making investments in guys that wouldn't pay off, but it's working, it's fine.
As you watch, the uproar over cable, the uproar over the game, the uproar over the dress code, these are things that are easy to read about, easily understood and delicious to write about. And we're the NBA, we're the place -- and that's the good news about the NBA -- we're the place where if you want to engage the world in a single conversation, there's always a safe place to do it in sports.
If you listen to the morning shows and you listen to the discussion, it's actually kind of a healthy discussion. "Should there be a limit? Should there be a professional dress policy? Should athletes be any different than other workers who know what is expected of them when they're on the job, in terms of dress ... or not?" I don't think it's a bad discussion. I think it's healthy, and it shows we have the capacity to engage.
Our season begins next Tuesday, and we've gotten as much ink on the dress policy than the preseason. But that shouldn't surprise us. Magic Johnson, Mahmoud Abdul-Rauf, Latrell Sprewell, Allen [Iverson's] rap record. It's the NBA, we're an accelerator, and actually, that's OK. We're live, unscripted drama, we're a soap opera, on the court and off the court, and we provide an awful lot of programming in both places to a lot of outlets, including yours.
Sheridan: How sensitive are you to not coming off as a dictatorial person or organization?
Stern: On the contrary, we've been getting a lot of internal heat from being too lenient. Dress jeans, a shirt, it's sort of like, "C'mon guys, show a little gumption."
Even there it's an interesting dialogue you're getting into regarding the nature of sports leagues. Our players, like other people, they have a job to do. And I don't think there are too many employers who don't set certain rules, and they're not necessarily viewed as dictators.
Sheridan: The jewelry part of it is what seems to be getting to some guys.
Stern: Our goal here is to project as professionals and to build upon the successes that have been entrusted to us and our players by everyone going back to George Mikan, Bill Russell, Dr. J, Elgin Baylor, to Larry Magic, Michael and Isiah.
Sheridan: Larry Bird was saying things went to a new low in a fashion sense last season, and Phil Jackson said guys were wearing "prison" clothing. Bird said he got more feedback from his fans on what his players were wearing than about how good ballplayers they were. Stern: But that's our fault, not the players'. In collective bargaining we said to the players, "Look guys, we've got this great group of guys who do as much or more as any other league or athlete, and nevertheless our reputation has taken a big hit, and we have to climb out of this together."
And we agreed. We agreed a dress code was something we had to do.
That's why in the collective bargaining agreement we said we're going to sign autographs, go to the season-ticket holders' functions, make additional appearances. It's just that maybe there are things we didn't have to tell an earlier generation. They just got it.
And maybe it's our fault that as we got younger, and certain mores changed, that we didn't tell them sooner and explain it earlier. And so you always have a readjustment. You have readjustment with rules, so as the game itself got a little rough or clogged, you change the rules, you enforce the rules, and the game opens up. I mean, there's a wide variety of issues like that.
If anything, you can hold us responsible for not doing this sooner rather than doing it [at all]. But for the vast majority of NBA players, it is not an issue. Sheridan: Why did your reputation take such a big hit last year because of the brawl? It was a bad brawl, looked horrible on TV, but why did it resonate so much, have so much staying power and almost became the defining moment of the season?
Stern: Actually, by the end of the season our reputation was very much on the uptick. That's a fact. We did the polls.
I think the brawl sort of became a flash point for a lot of feelings that are out there. With race, there's always an issue. And the brawl, unfairly, became the opportunity for the commentators to talk about all NBA players, although 450 of them were not involved in the brawl. "These people." "These thugs." "These punks." And that was a horrible sort of libel and slander of the NBA players. Images that ran were run in the context of a condemnation of all NBA players, and that really upset me. That became a critical flash point.
And so we've got to dig out from under that, and dig we must. Because at the same time our television ratings are strong, our attendance is strong, our businesses are all very good, and I actually think we're going to come out much stronger from it all.
Sheridan: So is that episode completely behind you?
Stern: Whenever you have a sport in America with a high concentration of African-Americans, there are always issues that are spilt.
We like to think that we [basketball people] are the ultimate egalitarians, you know, shirts and skins and "what have you got?" And that's been followed by our teams, who turn to whoever they think will help, without regard to race.
And we have a very effective business, which is based on exporting a league where the majority happens to be African-American. We feel pretty good about what we've been able to accomplish when all of those issues 25 years ago were hailed as likely to lead to our certain demise.
So the fact that there's an outcry about cable or a little bit of flutter about our dress code policy, that's the NBA. Welcome to our world. Go back and look at Abdul-Rauf, Sprewell, Kobe. It's fascinating. When you've been at it as long as I have, you tend to sort of see it in a broader perspective.
But it's really quite remarkable. Absolutely, flat-out, the best seat in sports is a courtside seat at an NBA game. You see the players, they probably step on you as they go by, and they're not wearing long pants or long sleeves as they go past. The camera catches that, and that's our strength. And that's why are players are such known players. And so when they do something, someone is able to put the face, name and act together more easily.
But hey, that's the way it is in a business that's going to generate $3 billion this year.
Sheridan: A few quick questions: Coach Krzyzewski for the U.S. team?
Stern: It's not official. I don't know anything about it.
I have confidence in what Jerry Colangelo does. He's a person who's devoted his life to basketball, he's made himself available to USA Basketball as managing director of the team, and I support whatever he does.
And obviously, the only thing I have against Mike K is when he was assistant coach of the Dream Team [and] he and Zina Garrison beat Clyde and me in tennis. I'll never forgive him for that. And then he told me I should play within my game. He gave me a coaching tip, which was correct -- which is why it ticked me off so much. But I think he's a good guy and a great coach.
Sheridan: As an American, what happened in the Olympics in Athens? How did it make you feel? Were you embarrassed? Were you saddened?
Stern: Actually, I felt badly for the American players because they couldn't have been prepared for the outpouring of animosity they met in the venues. They were really being asked to carry an extra burden that didn't make itself quite understood on the television screen, and they were doing it under a preparation system that was flawed given the advance of basketball around the world.
I was in Toronto ... when Maccabi Tel Aviv beat the Raptors, and Maccabi had a real team. I said to them, "I used to watch you guys and you were wooden, slow and non-American. Now you've got a 7-footer who can move, your backcourt used to play in the NBA, and you're well-coached and play as a team, and you're further along in the season than we are, so you're ready to go."
So, hey, the world really is catching up. So I don't buy the argument of our best players not going. We've had our best players there. That's not the issue. Everyone forgets Sydney, we had a team than included Alonzo, Antonio, Jason, Ray Allen, Kevin Garnett, Payton, Vince, and if Jasikevicius' shot goes in, we don't even medal. So people sort of forget what's going on or they don't want to hear it.
But I think it's great, even for the Americans. We're going to have some very motivated players who are going to be together longer, and they're not going to have any excuses. When you get beat, you get beat. The thing in sports, the best team is the one that has the higher score at the end of the game. Say what else you want, but that's the absolute beauty of sports. You can talk about how much better you are than the other team, but that's ridiculous. If you lost, you lost. That's it.
Sheridan: Which NBA team does it best. Who is the best owner?
Stern: I can't answer that. It wouldn't be fair to someone. There are a lot of ties for first. I'd rather encourage them behind closed doors ... than expose them to ESPN.
Sheridan: Who does in-game arena presentation best?
Stern: For years I've seen Phoenix do a good job. I think Dallas is a hoot, the Pistons do a good job, San Antonio.
But I must tell you, that would be a fair question three years ago, but given the work of our teams, where they have peer review, the bar has raised so high that the difference between 1 and 30 isn't there anymore as the gap it was.
Now that we share music, we share clips and share dance-team numbers, we share extra acts and the like through team marketing and the business-operations department of the NBA, the gap isn't what it used to be. Everyone is really much better.
But I spent a lot of time in Detroit and San Antonio, and I thought both teams did a very good job. There have been different approaches to the game -- I mean the Celtics are fabled in their approach -- and that's not really an issue anymore the way it used to be.
Sheridan: You sure the Hornets are moving back to New Orleans?
Stern: Yes.
Sheridan: Are you happy with the way that team has been run?
Stern: They're a work-in-progress, and they were a work-in-progress before Katrina. They have a new president, a new president of sales, a new ownership composition. There has been a complete turnover in the team, and in New Orleans this year it was going to be considerably improved and performing considerably better economically.
I think a great story this season is the way the people of Oklahoma City have stepped up and offered a temporary home to the Hornets, and the outpouring [of support]. They've been beyond reproach. They understand help, they understand tragedy, and they understand how this affects the resurrection of that city, and they've been great.
And I think by opening night we're going to be somewhere approaching 9,000 full-season equivalents. I'd have to double-check the numbers, but I think that's above the league average.
Sheridan: How long to you plan on staying in the job? Do you ever think about retirement or what you'll do when you retire?
Stern: I have no plans to retire. I absolutely love the job, and it changes in an interesting way every day, and it's actually becoming even more relevant, witnessed by my remarks on social responsibility. The wrestling with new technology and getting it right, and wrestling with the global opportunity. I think I've got the best job in the world.
