Stern sets his sights overseas - The Biz - NBA Commissioner David J. Stern - Brief Article

Basketball Digest, May, 2002 by David Stone

AT THIS YEAR'S ALL-STAR GAME in Philadelphia, NBA commissioner David Stern and deputy commissioner Russ Granik gave their annual "state of the league" address and touched on a number of current issues, including international expansion, the new NBA television contract, and the first season of the NBDL the NBA's developmental league.

"We like our game," Stern said at the outset of the press conference. "We think it has improved with the changes in the rules. We think that the increased attendance and the increased television ratings may have something to do with that or they may not, but' our fans are telling us they like the game."

While the NBA has always been aggressive in pursuing the growth of its worldwide reach, Stern and the league have been somewhat nebulous in publicly outlining a specific plan for international expansion. However, in Philadelphia, Stern talked at great length about the league's future in overseas markets. "We think in the coming months, if not years, we have to come up with a definitive plan now that our TV arrangements are set for a more expansive NBA approach outside the United States.

"We think that can take three possible routes: One would be us becoming affiliated with an existing league. One would be with us starting an NBA-sponsored league outside the United States, and the final one would be the placing of NBA franchises outside the United States.

"It's not anything that I ever thought I would be saying in a public forum, but my sense now is that by the end of this new television arrangement, which is six years from now, there will be a firm set of plans for NBA expansion outside the United States. We think that the internationalization of our sport is 'now at a stage where those are not fanciful discussions or thoughts. I'd say that, realistically, the places where we could place NBA teams would be Mexico and Europe, from a travel perspective. The place that we would consider NBA sponsored-leagues is anyplace, including Asia, Latin America and Europe."

Stern was later asked about his thoughts on the NBDL's first season. "We are very pleased with the league," he said, adding that he felt it was "extraordinary" that as of the NBA All-Star break, four D-League players had been signed to NBA contracts.

However, because the league has so many teams based in military markets, Stern said that September 11 had a particularly negative impact on ticket demand, although as the season progressed, attendance began to increase. "We are recognizing that it's probably going to take us three or four years to get to where we want to [financially] rather than the two years we were projecting. We need to have a well-funded, well-promoted, well-trained league and medical facilities and the like, and community service ideas built in that the D-League. provides for us."

Not long before the All-Star break, the league signed a fairly controversial TV contract with Disney's ABC and ESPN and AOL Time Warner (which owns TNT) that placed more games on cable stations and fewer on networks, and allows for a shift to newer--and perhaps yet-to-be-invented--forms of mass broadcast. "We understand that the viewing habits of our fans have changed dramatically," Stern said. "Our fans have become viewers, increasingly, mid week, of cable, and ... that's why we have elected to have our Thursday night double-header on TNT. We are going to Wednesday and Friday night single doubleheaders on ESPN, which has increasingly become the first sporting choice of young men, and we will be launching an AOL Time Warner and NBA-partially owned sports network to have NBA games on all of the remaining nights of the week."

But the most interesting part of the deal is Stern's vision of the future of sports broadcasting. "By the end of this six-year deal, we are going to move beyond cable. Whether that's through digital cable or Internet distribution or some newly-invented approach, we are seeing the decline of network viewing this season. It is moving to cable. It is moving to individual viewing. And you are seeing video-on-demand. You are seeing TWO. You are seeing League Passes in all sports. We are going to see customization, personalization, individualization, however you call it, of viewing options, and every viewer is going to be able to make up his own docket."

In March, Orlando Magic owner Rich DeVos, who had earlier decided to sell the team largely because of its financial situation at the TD Waterhouse Centre, took the team off the market. DeVos said the potential of a new owner moving the team out of Orlando was a factor in not selling. "We're going to stay in town and keep the team," DeVos said after signing a year-to-year lease with the dry.

DeVos originally wanted to sell the Magic because he claimed that the team couldn't compete financially at the TD Waterhouse Centre, and later lobbied for public funding of a new arena. But when Florida's tourism-based economy began to suffer, it became clear that funding would not be available, and DeVos backed off of his efforts for a new arena. Now he says that his decision to hold on to the Magic is not contingent on getting a new arena or renovating the TD Waterhouse Centre, but he added that the team, city, and Orange County would eventually need to "revisit the issue of building a new arena."