ADAM SILVER: Thank you all for being here today. We just finished our fall Board of Governors meeting. Pretty full agenda. We had our new media partners -- one, our existing media partner Jimmy Pitaro from ESPN, ABC and Disney present to us, Rick Cordella from NBC Peacock came in and presented, and Jay Marine from Amazon. It was great to see the three partners together. They talked about ways in which they're going to seek to elevate the game this season, ways they're going to market it.
We talked with them and among our owners on issues around streaming, the opportunities that present for our league over time to customize the telecast to do a better job engaging with our fans. There was a bit of a discussion around local television as well. Obviously we're going through a transition.
Many of our regional sports networks have just come out of bankruptcy, and fair to say enormous disruption there. We're thinking about the future when it comes to how we're going to present the games locally to our fans.
We also spoke about opportunities in Europe. Mark Tatum, the deputy commissioner, who is here, led those discussions. He and I spent time in Europe this past summer talking to various stakeholders, including existing clubs who would like to be potentially part of the league, to media companies, other stakeholders, our federation, FIBA. I would say there continues to be enormous excitement around an opportunity there.
The state of the game of basketball in Europe I think is fantastic. They have their own traditions, which we of course want to maintain, but we think there's an opportunity to bring an NBA-style league to the continent and to take the game to another level.
Lastly, just a bit of discussion about the game itself, led by Byron Spruell, and of course James Jones has now joined the league office. James, we're thrilled to have you with us. Enormous excitement about how we finished last season. Congratulations again to the Oklahoma City Thunder. So much competition in the league right now.
Some minor tweaks around rules -- some of what's been reported already -- around the game. Training camp is right around the corner. The teams that are going to be traveling internationally begin in roughly two weeks, and the rest of the teams not many days after that. I'd just say we're really excited to get back to NBA basketball.
Happy to answer any questions anyone has.
Q. Concerning Steve Ballmer, the Clippers, Kawhi Leonard, Aspiration, what was your reaction when the report surfaced? And it seems with the CBA your powers can be broad as far as potential penalties. I know there's an investigation going on, but how broad can you assess penalties and what was your reaction when the announcement came out?
ADAM SILVER: Well, when the podcast came out, it was news to me. I'd frankly never heard of the company Aspiration before, and I'd never heard a whiff of anything around an endorsement deal with Kawhi or anything around engagement with the Los Angeles Clippers. So it was all new to me. I heard it. I saw some of the follow-up information.
We spoke internally. Rick Buchanan, our general counsel, is here, who oversees any investigations. Rick had a conversation with Steve Ballmer, and we quickly concluded this was something that rose to the level that necessitates an investigation, and in fact one that's done outside of our office. Wachtell Lipton, the New York law firm that we've used in the past for investigations like this, is overseeing it.
Again, I would also say I've been around the league long enough in different permutations of allegations and accusations that I'm a big believer in due process and fairness, and we need to now let the investigation run its course.
Q. How broad do your powers extend as far as the collective bargaining agreement as far as penalties you can assess to the Clippers, to Kawhi Leonard?
ADAM SILVER: My powers are very broad. Full range of financial penalties -- draft picks, suspensions, et cetera. I have very broad powers in these situations.
Q. We've all obviously been diving into the CBA and we're trying to parse it and figure it out for ourselves. I wonder if you can clarify a couple things with regard to cap circumvention. Is the burden of proof on the league to prove that it happened, whatever proving it happened might mean, or is it on the team to prove that it did not happen? And then related to that, if I could just tack it on, there is the reference to circumstantial evidence within that clause. Does the NBA need hard evidence of some sort, a text, an email, a memo, or is the mere appearance of impropriety enough for the league to act?
ADAM SILVER: Number one, the burden is on the league if we're going to discipline a team, an owner, a player or any constituent members of the league. I think as with any process that requires a fundamental sense of fairness, the burden should be on the party that is, in essence, bringing those charges.
Then in terms of your specific question about circumstantial evidence, I was only quasi-joking with someone earlier that when people talk about a smoking gun, that's obviously circumstantial. It means the gun is still smoking; it must have recently fired.
I'd say in the case of the league, we and our investigators look at the totality of the evidence. I think whether mere appearance, just by the way those words read, I think as a matter of fundamental fairness, I would be reluctant to act if there was sort of a mere appearance of impropriety.
I think that the goal of a full investigation is to find out if there really was impropriety. Also in a public-facing sport, the public at times reaches conclusions that later turn out to be completely false. I’d want anybody else in the situation Mr. Ballmer is in now, or Kawhi Leonard for that matter, to be treated the same way I would want to be treated if people were making allegations against me.
The answer is we're not a court of law at the end of the day, either, that we have broad authority to look at all information and to weigh it accordingly.
Q. I wanted to ask you about All-Star and NBA Europe specifically, those two things. We have, I guess, the machinations of an All-Star idea are out there now. How soon do you expect that to be finalized? And what can you tell us about NBA Europe? I know Tony Parker spoke a few days ago about how he's bullish on whatever the opportunity may be. Where are things at this point?
ADAM SILVER: So I'll start with All-Star. Again, Byron and James Jones are sitting right in front of me here, and they were overseeing it. But the goal is to have the new format in place by the opening of the regular season. I think there's something to that that once the season starts everyone should understand the rules of the road and what we're looking at for All-Star this year. That would be our goal.
I'd say we've made, I think, tremendous progress working with Andre Iguodala and the Players Association. I think they have the same interest we do in having a more exciting and engaging All-Star. None of us have shied away from acknowledging our disappointment of what we've seen on the floor the last few years. It's an odd situation because it's not just us and the Players Association but even the players individually are acknowledging, yeah, this is not the best foot forward for the league.
I also mentioned earlier that Mark Tatum and I spent time in several different cities in Europe this summer talking about the league opportunity there. And just anecdotally, I was sort of amazed how many people came up to me, knew who I was, international fans in different countries said, you've got to fix All-Star. I think there's a recognition in this league that maybe it isn't so much the case in other leagues that have other marquee events that people -- where there's more lore around them.
But I think in the case of the NBA, this is what I'm trying to convey, particularly to younger players, is that All-Star is a big deal. There's been great traditions out there. People have great memories of these All-Star Games. It's part of the fabric of this league, the excitement that comes from it and the engagement from our players.
We want to fix it. We have a new format that has been discussed, both with the Competition Committee and now with the Board of Governors. It's not official yet, but it's in essence working off, call it a Ryder Cup-type format of U.S. against international. We think we're looking at two U.S. teams and one international team as a round-robin because also a sense of fundamental fairness to all the players, we're roughly two-thirds or a little bit more U.S. players, the rest are international, so it wouldn't be fair to the U.S. players if it was 50/50 and also you wouldn't necessarily have the best players on the floor as All-Stars if you divvied it up that way. But I think we can get to a place where we have exciting competition built off that Ryder Cup format.
Interestingly enough, NBC of course is the new rightsholder for the All-Star Game, so a return to the past. We're going to be on network television with the game on NBC, but also, we are going to be smack in the Winter Olympics. I think in addition to many people for years who have been suggesting -- some people nodding in this room -- that we've been telling you that, Adam, you should do something with U.S. against international, that because we're within the Winter Olympics, the lead-in, the lead-out will be back to the Olympics, I think it makes particular sense to do something with an international flavor.
I will say I'm hopeful. I know I've stood up before all of you before and said, we fixed it, we got it, it's going to work this year. So I don't want to overpromise. But I feel pretty good about it. Looking back at James, most recently off the floor at the league office, to have discussions with some of his old friends about the importance of this and the meaning.
I'll just lastly say, it's not about the money. For the players, none of the players are saying, pay me more or anything like that. To be honest, I was with my family at the WNBA All-Star Game this year. It looked, for my taste, a little bit too much like an NBA All-Star Game just in terms of the play on the floor.
I get it. It's a different generation. Maybe I've just gotten older. But I know I talk to a lot of fans, and All-Star Games for whatever reason take on particular interest around basketball. I think we should be able to create something that's fun, exciting, engaging. Not expecting guys to play the way they would in the Finals necessarily or even in a playoff game, but yet to go out, play hard, put on a good show for the fans.
In terms of Europe, I saw Tony Parker's comments. Tony is one of the people that Mark and I have met with frequently. He's a team owner now in France. I was buoyed to see his ongoing enthusiasm for it. I think Tony speaks for a lot of the constituent members and stakeholders of European basketball, that there is real interest in us doing something there. Again, Tony knows all sides of it now as a team owner as well. Again, we're not there yet. The discussions are ongoing.
By the way, since we all spoke, we hired JP Morgan to work with us on the analysis and also working with another smaller bank called Rain who have done lots of work for the league historically and represented various clubs in transactions. So they're busy at work literally on the model trying to better understand the investment opportunity for outsiders.
I think our basketball people now are very engaged in how the competition will work. Our lawyers are thinking hard of how we can take a system that's now known to U.S. sports as sort of a cap-based system and a revenue sharing system with players and how we can apply that in a European framework.
Nothing is easy here. There are reasons why this hasn't been done before. But I think we're up to it, and again, the response has been tremendous.
Q. We are roughly two full offseasons now through the new 2023 CBA and players are certainly getting paid more than ever, so that's equitable beyond any measure. We are in an interesting spot, though, where the free agent marketplace from an entertainment value standpoint, the league is an entertainment product as much as anything else. Wasn't very much of a robust offseason in terms of player movement, what have you. We're seeing a lot of teams in respect to the luxury tax aprons rostering second-round picks to save pennies and maintain that flexibility. Are you happy so far with the aftermath, the impact of these new rules? Is there something that maybe would force you or encourage you to reevaluate that circumstance, and would that include something to the effect of I know several teams have lobbied your office about some type of homegrown player cap discount that could free up some spending and ultimately create some more activity across the league?
ADAM SILVER: Well, number one, I'd say, by definition, no team can save pennies under this system. We pay out 51 percent -- as we're fond of saying, not a penny more or a penny less. The money has to get distributed to the players in this league. There's no way to, so-called, save money. The money is 100 percent being paid out, as you began by saying, and the players are well paid under the system because the pie is expanding. That was the goal with more competition, and that's working.
I'll never stand here and say, we've figured it out, we've got the perfect system. From the day we got a collective bargaining done, we began watching how teams respond to it. We talk on a regular basis with the Players Association to see whether there are different aspects of this system that we should adjust.
I get it, particularly from a media standpoint, we'd like to create more excitement for all of you in the offseason in terms of a hot free agent market. That's not my highest priority. Honestly, I've learned this the hard way. I think I've said before, and this relates to All-Star as well, earlier in my career I was at NBA Entertainment; I understand the entertainment side of this.
But I've learned, in some cases the hard way, the most important thing is the competition on the floor. I think now we've had seven different champions in seven years. We had a fantastic Playoffs and Finals last year. I get it that if you tighten the system for certain individual players, that means it will cut down on the number of opportunities they may have in other cities. That's what happens in a cap system.
But I think on balance, it's been very effective. It's been effective in producing strong competition. It's been effective in ensuring that smaller markets -- I don't even necessarily like that moniker anymore, large versus small markets. I should really say that all markets are in a position where they can tell their fans, we have a fair chance to compete for championships.
I think that aspect is working really well. But again, your points are fair. We like the excitement. I think we still have had some really interesting free agency periods and some fascinating trades and signings. Much more so -- when I was standing here last year, people were saying, oh, that aspect of the NBA is dead because of a new collective bargaining agreement, and then we saw some dramatic trades last season that were completely unanticipated.
We'll keep looking. I'd say on balance I'm very happy with where we are, but always we'll keep looking at the system.
Q. In 2019 you gave an interview, the year of Kawhi's free agency, in which you had said that the league has to create a true stigma around cheating, that the league needs to create a cultural shift in the way that competitive balance is achieved. Obviously a lot has changed since then. We are in a new CBA, but also the franchise valuations have skyrocketed, the net worth of your owners and governors has skyrocketed as well. Apropos of this Steve Ballmer/Aspiration/Clippers scandal and regardless of the outcome of that investigation, do you think the league needs to do more to create that cultural shift, to create that stigma around cheating?
ADAM SILVER: I'm not sure. But I'll say that from 2019, from when that interview is that I gave, and I don't remember it precisely, I think there has been a sea change in the league. Look at the response to the allegations against the Clippers and Mr. Ballmer right now. To suggest that there is a stigma around it would almost be an understatement. The amount of attention that this has commanded, certainly no one out there is saying, oh, this is just business as usual in the NBA, what's the big deal, this is what teams do when they want to sign players. People, in fact, their suggestion is this is highly aberrant behavior, which is why in response to a podcast and some additional media reports, we brought in the big guns on the investigation, and no one certainly around the league is suggesting an overreaction on the part of the league to a set of allegations and nothing else right now.
I think we have made progress there. I think that there's enormous stigma in this league around any sort of cheating or any lack of fair play. I think also the results we're seeing, again, is from 2019 to now, as I said earlier, seven different champions. I think there is the sense around the league that there's no league bias toward particular markets.
That used to be, in my early days in the league, that was conventional wisdom. The league had to have this team or had to have this big market. This was the only way the league was going to be successful. We had some of our best ratings in years when two of our smaller markets, Indianapolis and Oklahoma City, competed in the Finals.
Again, as I've said before, I've used this example, I'm an NFL fan. When Pittsburgh plays Green Bay in the Super Bowl, it's not billed as a small-market Super Bowl; it's two storied teams. That's where we'd like to get as the NBA, that it's not a function of market size or even market attractiveness necessarily.
In order to do that, you have to have a fair set of rules that people think, that the community thinks are going to be enforced without any bias and in a full and fair way by the league office.
I hope that's how members of the NBA community and outsiders feel about our reaction to these allegations against the Clippers, that we take it very seriously, and that's why we're doing the investigation we are.
Q. I think we'd all agree that if Kawhi was paid $28 million to do nothing and just to augment his Clippers salary that that's bad. There's a gray area here, though, where a company that was paying the Clippers $300 million also had an endorsement contract with its star player. That's not uncommon in the NBA or other leagues. Can the NBA ever actually police that, or is that a conflict that may necessitate some rule changes about corporate partnerships on the team side and also relationships with players to make sure that the illusion of impropriety doesn't appear constantly across the league?
ADAM SILVER: Yeah, I don't know if it's a Freudian slip, your illusion of impropriety. I think the fact is, is there impropriety or not. I get it that if a building is the Pepsi Center, there's a possibility that a player could have a deal with Pepsi. I think it would be unfair to the players if there was a so-called corporate deal done with the league or team that they would thereby be precluded from having deals with those same organizations, particularly many of the ones that are endemic to sports that want to actively invest in players, and with no suggestion whatsoever that they're doing it to aid the team in any way.
Also, it's not unusual in this league, as you know, that if you have a player playing in a particular market and that's where the company is based, that part of the quid pro quo in the contract is the player, in fact, is going to be playing and playing potentially in that league.
We're constantly learning in the league office. Again, I'm reserving judgment because I don't know the facts here. I don't know what Kawhi was paid. I don't know what he did or didn't do. We'll leave all that for the investigation.
But with each new set of facts and each new challenge to the league office, again, we're first to admit that we can always learn more, and also, as a prior question suggested, the stakes have gotten much higher, the salaries much higher, the team values are much higher. Maybe there needs to be a new level of scrutiny on some of these things.
I think those are all things we'll look at, but we certainly won't change the rules in mid-course during an investigation. Let's get through this investigation. We'll reassess. We'll see what happened here. Then we'll sit down both among our owners and then potentially with the Players Association because some of that is a function of collective bargaining, and see if there's additional things we need to do.
Q. You've talked a bunch about the possibility of NBA Europe today, how the league, all the different arms of the league are working on it. You haven't mentioned local or domestic expansion at all, which is something that's come up a bunch in the past. Why does it seem that the focus of the league is more on this creation of a European league or expanding into Europe this way as opposed to looking at domestic expansion?
ADAM SILVER: Again, I don't know why it seems that way to some people. It's not the case. I think there are independent people looking at potential domestic expansion and then others looking at opportunities in Europe, and I see them as completely independent opportunities.
The fact is no new news to report today on domestic expansion, but it's something we continue to look at. We did discuss it at the board meeting. I think that we've spent a fair amount of time on the economic models around expansion. We've gotten into more of, I'd say, a deeper dive than when I last addressed the media on it. Certainly now that we know what our media contracts are. That helps in doing the math, at least over the next decade.
Part of the difficulty in potentially assessing it is a sense of long-term value of the league, and a little bit maybe it's a high-class problem, but as with some of the recent jumps in franchise valuations, that sort of creates some confusion in the marketplace about how you might even price an expansion franchise. So I'll only say it's something that we continue to actively look at.
I will say also, while it's a completely independent look what we may do in Europe versus the United States, I think adding teams to an existing league where you have, from a national standpoint at least, a fixed pie of revenue, is very different than looking at an opportunity in Europe where it's a clean slate. While there is an existing operation there, it's sort of a greenfield in terms of what the opportunity might be.
But to the extent anyone has taken from me a suggestion that Europe is more a priority than potential expansion in the U.S., it's not the case. I view it as two independent work streams here.
Q. Very quickly on the Malik Beasley situation, is there any limitations on his availability or his ability to sign with a team while the league is investigating his potential involvement in the gambling stuff?
ADAM SILVER: I'll only say there that the investigation is ongoing. As I understand it, there's still a federal investigation that's ongoing of Malik Beasley as well. We will address whatever is presented to us in his case.
Q. You mentioned a moment ago how important it was for you to present to every stakeholder in the league that you take this seriously, that there's no favoritism between franchises. How would you characterize, in the time since the report about the Clippers came out and in the couple days that you've been convened here in New York, the tenor or the reaction you've gotten from governors of the other 29 teams? Is there any kind of consensus, any kind of emotional framework they seem to be coming from in terms of frustration, in terms of reserving judgment? How would you characterize that feedback?
ADAM SILVER: At least what's being said to me is a reservation of judgment. I think people recognize that that's what you have a league office for. That's what you have a commissioner for, someone who is independent of the teams. On one hand, of course, I work collectively for the 30 governors. But I have an independent obligation to be the steward of the brand and the integrity of this league.
At least what those governors have said directly to me, to the extent we have had discussions, they've been limited. We communicated to them that we engaged Wachtell, as I said earlier, to do this investigation. And maybe I cut off any further conversations and said, let's all withhold judgment, let's do this investigation and then we will come back to you in terms of our findings.
Q. It's become very expensive to watch the NBA as a fan, not just going to games but also in order to -- there's different streaming services you have to subscribe to, some of the RSNs are expensive. I know that there are other points of entry for fans to interact with the NBA. There's social media, and a lot of younger fans, that is how they're experiencing the sport. But I wonder how much you think about that and how that will shape the next generation of fans?
ADAM SILVER: I think about it a lot. I will say, I saw the story your publication ran. You took all the different streaming services and added them up and what those costs would be. I look at it a little bit differently, because most people can only consume so many games. By way of one example, in these new media deals, we're going from essentially 15 exposures on broadcast television to 75. So to the extent someone wants to put little rabbit ears on their television, you can still get 75 marquee games in essence for free in the marketplace.
I'd say in addition to that, and this is an ongoing issue for the league, there's a huge amount of our content that people essentially consume for free. This is very much a highlights-based sport, so Instagram, TikTok, Twitter, you name it, any service, the New York Times for that matter, to the extent that your content is not behind a paid firewall, there's an enormous amount of content out there. YouTube, another example that is advertising based that consumers can consume.
I think this is a new world now of streaming media. I think we're paying a lot of attention to that. It was one of the discussions we had with our media partners, not just the cost of the games -- and I think most people are conditioned to paying a certain amount for high-value content -- but also the discovery of those games.
Again, I'm a fan of many different sports. I think we've all had that experience where you're going to Google to find the game you want to watch because the world has changed it's not just automatically in the place you thought it would be.
But ultimately, I'll talk about it in terms of reach and how you reach your consumers. It's interesting -- because of the disruption in the regional sports network business, I never would have predicted this was coming 10 years ago, but a lot of our local games are moving back to broadcast television. In fact, we have more games on broadcast television locally than we've had anytime in recent history.
We're continuing to look at it. But the ultimate answer is we think a lot about it. We know where we have mass appeal. On a global basis, we're literally reaching billions of people. We don't want to disenfranchise people by working with partners that are creating price points that make it inaccessible to them.
Q. You mentioned some of the talk that you have this summer with the stakeholders and clubs for the European expansion. You didn't mention the EuroLeague. Is there still room for the NBA to talk to the EuroLeague? Also, one of the biggest challenges would probably be the creation of new franchises in appealing markets that are right now underserved from a basketball perspective. It seems that the preference of the NBA is to create like an extension of a soccer team, to intersect, I assume fan loyalty. Is that still your preference?
ADAM SILVER: I'll say a couple things. Number one, discussions with the EuroLeague are ongoing, so yes, there is still room, as you put it, to further engage with them and find ways that we can integrate our operation in some way. So number one.
Number two, I wouldn't say it's our preference to link with those well-known soccer clubs in Europe. I think that is one model, where particularly some of those incredible soccer brands in Europe have some of the biggest followings in the world behind their clubs, but also, as you well know, have basketball traditions as well. They may not be as well known for their basketball clubs, but it's not as if we're taking a soccer brand and saying, now go start a basketball club. They have basketball clubs, as you know, in some cases some very high-performing basketball clubs.
I think we're looking market by market. In particular markets, some of those soccer clubs have come forward; they have basketball organizations. In some cases, they have basketball teams that are currently playing in other leagues, and have said, we would be very interested in partnering with you. And then there are some other markets where there's not the same basketball tradition as you see in some of the European countries.
I'm sure you're sitting there thinking, too, that when I talk about Europe, Europe is a very -- from country to country things can differ dramatically, levels of interest in basketball can differ dramatically. There are some European countries with capital cities incredibly well known to American audiences that seem like great opportunities but without great basketball traditions, where in some of those markets it probably makes the most sense to start from scratch and create new clubs.
I'm looking at Mark Tatum here, who's leading this initiative. It's a hybrid. I think we're open to different approaches with a recognition that Europe is a big place. Cultures and sports traditions can vary very much, particularly in basketball, from market to market, country to country. So part of the work we're doing now is to really drill down and say, all right, this is maybe the opportunity in this country, there may be an existing soccer club that's very interested, but in this country over here, we need to start from scratch.
FastScripts Transcript by ASAP Sports