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Meet NBA Commissioner David Stern

Rick Horrow, the "Sports Professor," talks with NBA commissioner David Stern


David Stern celebrated his silver anniversary as NBA commissioner in 2009—although his association with the NBA started way back in 1966, when, as a newly minted Columbia University lawyer, he began providing outside counsel work for the league. Under his watch, the league has built 28 new arenas, added seven teams, and seen franchise values and TV rights soar. From the time I met Stern in the 1980s, it was clear that he had all of the necessary qualities to be an ideal ambassador for professional basketball. He’s articulate, passionate, and maybe most of all, intelligent.

Stern became the fourth commissioner of the NBA in 1984, a golden age for the league with its “Showtime” Lakers, led by Magic Johnson; archrivals Larry Bird and the Boston Celtics; and star rookies Charles Barkley, John Stockton, Hakeem Olajuwon, and Michael Jordan. The stars’ shoe contracts helped fuel NBA growth; under Stern, the league expanded from 23 to its current 30 teams, saw unprecedented globalization, launched the WNBA, and pressured more than a dozen cities to come up with public money to fund NBA-centric arenas.

Like Bud Selig, Stern has seen his share of controversy, most notably outof-control player behavior as exemplified by the November 2004 “Basketbrawl” between the home team Detroit Pistons and Indiana Pacers, called by many the low point in NBA history. The incident was followed by denouncement of the game’s prevailing hip-hop culture; dozens of player arrests; and an ugly, public sexual harassment suit against New York Knicks team president and former player Isiah Thomas in the summer of 2007.

Yet it was Stern’s take-charge leadership of the gambling crisis surrounding NBA referee Tim Donaghy in the spring of 2007 that really defined his character. Says Phoenix Suns general manager Steve Kerr, “There’s never a question who’s in charge when there’s a crisis in the NBA.”

Like NFL commissioner Roger Goodell, Stern in 2011 faced the end of labor peace in the NBA, as that league’s collective bargaining agreement (CBA) is set to expire. At the heart of the NBA’s collective bargaining agreement issues is revenue sharing, with NBA owners bidding to impose a hard salary cap and slash players’ salaries by $750 million to $800 million annually. Although Stern is a seasoned negotiator, a stalemate between the sides, coupled with the potential of the NFL going dark, would leave pro sports fans facing a true winter of discontent.

Stern, finally, has done a tremendous job making the NBA a global brand. Currently, the game is available in more than 200 countries; international customers account for nearly half of league merchandise and jersey sales; and for the first time ever, a team has a foreign-born owner. During the 2009 season, the NBA launched a new marketing campaign called “éne-bé-a,” the Spanish pronunciation of NBA, and will pour $10 million into various Hispanic initiatives.

Q: The NBA has seen 10 arena and five franchise relocations since 1999. What’s the deal with all the comings and goings?

DS: I really think it’s a failure. I’m old school. . . . I grew up thinking that players should keep playing for their teams and franchises should stay in their cities. But, it’s good that there are other cities that are willing to welcome us even though we haven’t done that well for the city that preceded it.

Q: Speaking of journeys, in September 2009 the NBA welcomed its first foreign owner, in the guise of Russian oligarch Mikhail Prokhorov. Is this the beginning of a new phase in the globalization of your league?

DS: The deal closed in March, 2010, and so far, Prokhorov has focused almost exclusively on his team, the New Jersey Nets. Prokhorov’s money isn’t going to be what turns around the Nets. He’s going to do it by hard work and good management. That’s what works—drafting a good player that comes out of the lottery and the draft, by surrounding that player with other good players, and by making sure that people understand that he’s committed to the entertainment experience at the Prudential Center.

Q: Here in the United States, the closest we get to basketball aristocracy is “King” LeBron James. Do you think that James is overhyped by the media, who, in some cases, also call him overrated?

DS: You know, he hasn’t won anything yet, but he may be the best player ever to descend to this planet. It’s a delight to watch him; it’s a delight to watch him grow, to see his width and breadth, in terms of his interest and capacities. He’s a great kid and a great player.

He may be the best player ever to have played. Michael [Jordan] might dispute that, but he has a lot of canvas yet on which to paint. I have no doubt the picture is going to be beautiful.

Q: In February 2010, the NBA All-Star Game was played in the 100,000-seat Dallas Cowboys Stadium. Are we now always going to see that event in domed stadiums that hold a lot of people but aren’t necessarily conducive to basketball?

DS: No, absolutely not. We’ve elected to go to Los Angeles the year after. I’m talking about Orlando; my guess is New Orleans will somehow get back in at some point into a rotation. We talked about an application from a newly renovated Madison Square Garden; I’m sure there will be one from the new Brooklyn building. No it’s not about domes, it’s about cities and what the particularities are of each market.

I think it’s going to be an event, and it’s kind of neat. . . . many [spectators] are going to watch it on this spectacular scoreboard, and the one thing we know is that no shot from any place is going to hit the video board. We’re feeling a sense of comfort about that.

Q: What mechanisms do you have in place to talk to the fans? Do you go sit in the cheap seats, do you do roundtables, what do you do to get directly involved?

DS: We have about 20,000 fans on an online survey, which is critical. We have our own polls, we have Harris, that’s the way we do this. You listen, you observe, you read, you understand everything about it because you become steeped in it. But then again, that’s not usually good enough because, you know, one person’s view is getting to be less acceptable when companies such as Proctor and Gamble and Coca-Cola spend millions and millions of dollars to do research to understand what the consumer interaction is, and so we do that. You can go online and see what the bloggers are talking about.

When I joined the NBA as general counsel in 1978, my guess is that our gross income was about $75 million. Now I don’t mean gross income at the league level, I mean network, local TV, and so on. Yet in the intervening years, and this is true of all sports, there’s been a complete build out of the arena–stadium structure, which changed not only the economic model but also the arena–stadium experience. There was a time, and unbelievable as it may sound, when there was no ESPN, okay? Everyone born after a certain date thinks that on a certain date ESPN was invented, but it wasn’t.

There’s a third thing, and it has to do with licensing. I think in 1978 they were selling $80 million at retail as opposed to $3 billion. I mean, that was it! Sports marketing is a big deal because it makes your players bigger, and you can’t spend enough money to equal what sponsors pay. You can’t spend enough money to get the kind of promotion they’re having with kids.

Q: What’s your perspective on globalizing the NBA?

DS: I believe that you take advantage of opportunities because of the power of sports on a global scale.

Right now, we’re focusing on Eastern Europe, the Middle East, and China. If you are a student of the world, you see these things are coming. We’ve sent a group that’s been in discussions with Abu Dhabi and Dubai. We’re talking to Russia; we’re obviously going to investigate China because of the positive changes that are happening there. Following sports content is a global thing.

Q: What are the trends for the next 30 years?

DS: There are many trends that we anticipate. The first trend, of course, is additional trends. The opportunities to communicate online are boundless, and nobody’s in a better position than sports to capitalize on that.

Q: You’re the only pro team sport that has its own women’s division, if you will. So how much marketing leverage does that give you with women?

DS: There hasn’t been an extraordinary advantage yet, but on a long-term basis it will be because if you watch it, there’s a fundamental change taking place. More high schools and colleges are having women’s programming; it’s a woman’s community. Now it’s not just Connecticut and Tennessee, but it’s Stanford, and Baylor, and other schools all over.

Q: What’s your biggest regret?

DS: One of my biggest regrets is the fact that we suffered a lockout in the 1998-1999 season. I don’t know exactly what I would have done differently, but I just feel as though I didn’t get my message through to the players. There has to be a better way than shutting down a sport to do that. That was terrible.

Q: What is your most significant accomplishment?

DS: I usually say that there are two. One is the fact that people said our sport was too black to succeed in America. Our players earned too much and did drugs. I said America is a lot better than that, and it turned out that America is a lot better than that. I love to have been part of the growth of the sport. I’m really highlighted by the Dream Team stepping up to the platform in 1992 representing America. The second highlight is really how we were part of Magic Johnson’s announcing that he was HIV positive. In the aftermath of that, to ride along with Magic to educate the world and change literally the debate on HIV and AIDS, because now the patient was a beloved face to the world, that was something.




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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
€18.20
Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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