NBA Commissioner Silver prepares to reshape league after coronavirus

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NBA Commissioner Adam Silver

Mike Stobe | Getty Images

For those who know him, NBA commissioner Adam Silver is built for this moment.

A little over a month ago, Silver struck first, suspending games due to the coronavirus pandemic, and triggering a wave of closures from other leagues just as US cities began to enforce orders. stay at home.

Silver was praised for being the first commissioner to take over, showing responsibility and leadership when he closed the National Basketball Association after Utah jazz center Rudy Gobert tested positive for Covid-19. .

“Be the first account and it was the first,” said Ed Desser, president of Desser Media and former league executive and president of NBA television.

The fact is that being the first also brings expectations. And for Silver, who turns 58 this month, expectations are high as he oversees a league in the midst of a global crisis with no clear signs of recovery.

Small businesses across the country are suffering, millions of people have applied for unemployment benefits, and the stock market has fluctuated wildly almost daily. Usually the sports industry is relatively safe from economic turmoil, but the coronavirus has changed that.

All over the world, all sports suffer too. As a result of the closings, the leagues are losing millions of dollars or going bankrupt, as the XFL recently did.

But there may not be a league that will suffer as much a financial blow as the Silver NBA, given the events that served as a prelude. Before the pandemic forced Silver to suspend play on March 11, the NBA lost two icons – Kobe Bryant and former commissioner David Stern – and the Houston Rockets general manager flipped Twitter threatening the outlook lucrative league in China. Few can doubt that the NBA endured a tough 2019-20 campaign.

“This is the ultimate sport case study,” said Marty Conway, assistant professor at the McDonough School of Business at Georgetown University.

Go with his guts

Noting how Silver is handling this historic moment, those who know it and have spoken to CNBC said they expect Silver to be pragmatic or, as longtime sports agent Bill Duffy of BDA Sports said. , “Take a long-term view”.

The NBA refused to make Silver available for an interview.

Money is smart and innovative, according to those who know it and have worked closely with it over the years.

Before earning his stripes as an assistant commissioner for the NBA, Silver held several league positions, including COO, president of NBA Entertainment and chief of staff to the NBA. Before joining the NBA in 1992, Silver worked at the New York law firm Cravath, Swaine & Moore as a litigation partner.

The 57-year-old father, married and father of a child (with another child on the way in May), Silver has acquired precious experience in understanding the dynamics of the affairs of the league and how to manage the different constituencies of his mentor. Stern.

In his NBA.com biography, Silver is credited with helping Stern negotiate three collective bargaining agreements with the National Basketball Players Association; and help design the business model and oversee the development of the WNBA, the NBA G League and the new Basketball Africa League.

“He spent 15 years with David so he could see how [Stern] manipulated several things, but Adam helped David’s decision-making, “said Desser. He was often there to provide a counterpoint. I think David made better decisions, usually because he had [Silver]. “

The best example of how Silver could approach this current moment comes from his first major decision as a commissioner in 2014 – slapping a lifetime ban on former Los Angeles Clippers owner Donald Sterling for racist comments.

Casey Wasserman, CEO of the entertainment agency Wasserman Media Group, has known Silver for about 20 years and remembers his balance throughout the Sterling incident. According to Wasserman, the controversy helped Silver develop his management style in the NBA.

“I think what he showed at that time is, yes, he is a lawyer, he is intelligent, but he is also a human being who understood that at that time, he had to do what was right. Not from a legal standpoint, but from a human perspective, “said Wasserman.

In a detailed profile of Sports Illustrated in 2014, Silver said he spoke to various CEOs across the country for advice on the pound situation. He walked away with this: “Think about your life experiences. Then go with your gut. “

“What makes Adam who he is is that he really has a good sense of the right thing to do and how to show leadership,” said Desser. “How to be measured – not alarmist – but serious. I can’t think of a better, smarter guy to be in this kind of position. “

Priority

Wasserman said that Silver uses this same strategy because he is thinking of ways to save the rest of the NBA season. Silver will seek the views of the many NBA ridings he will need to appease.

“He’s absolutely thinking about what the future will look like,” said Wasserman. “He thinks about the future, anticipates and communicates. “

Although Silver has made it clear that the NBA will not return without the advice and approval of health officials, he continued to express optimism that the league may return this year in “some form,” he said. He told Ernie Johnson, host of Turner Sports NBA studio Ernie Johnson in a recent interview. One of the main ideas for relaunching the season this summer includes holding an abridged playoff tournament and finals in Las Vegas, CNBC reported last month.

But before his attention gets 100% focused on resuming the game, Silver will need to appease various NBA ridings of team leaders, CEOs, owners, corporate sponsors in the United States and in popular NBA markets. worldwide. It will also have to take into account NBA media partners like ESPN and Turner Sports who pay the league about $ 2 billion a year for broadcast rights.

And of course, Silver will have to come to an agreement with the NBA’s best election, the National Basketball Players Association, which represents players in the league.

According to a person close to the situation, the NBA wishes to conclude a compensation agreement with the players before announcing future plans to save the season. The NBPA had a conference call with agents last week to inform them that any agreement with the league’s owners will include refunds on contracts, including advances.

Oklahoma City Thunder star Chris Chris Paul is also president of the NBPA. He praised Silver for “communicating” with the players and treating the NBPA as a partner.

Asked about Silver’s challenge to recover the league after the coronavirus, Paul told CNBC earlier this month.

“I don’t think all of that weight is on Adam’s shoulders,” said Paul about Silver. “I’m sure he has a lot going on right now, trying to figure out what decisions to make and what to do. I think this is something that we all need to understand as a collective. We will come through this and be stronger. ”

Future economy

If Silver can strike a deal with players, restart the season, and get through without further coronavirus shutdown, his work is far from over.

The money will face what may be the single biggest financial blow to the NBA. It all started last October when Houston Rockets general manager Daryl Morey sent a tweet that upset the Chinese government, which Silver says could cost the NBA up to $ 400 million.

And with the games pending, the NBA suffers losses from ticket sales, dealership sales, sponsors and advertising, costing championship broadcasters more than $ 800 million. According to the Washington Post, the NBA could lose up to $ 1 billion this year, a figure that could increase if the rest of the season is canceled.

The NBA typically performs audits that determine basketball-related revenue (BRI) and sets the salary cap for the next season in July. This process will likely be delayed, but agents who spoke to CNBC said they feared the NBA could consider a salary cap of $ 100 million or less for the first time since the 2016-2017 season.

Andrew Zimbalist, professor of economics at Smith College, said he predicts a “tough road” for the NBA, which could include a recovery that could take two or three years as the coronavirus pandemic is expected to hurt household incomes in a foreseeable future.

“Once we start playing basketball again, it will happen in a different economic environment,” said Zimbalist, who was also the chief economist of the NBPA in collective bargaining.

Silver’s has a huge challenge, and how he will lead a multi-billion dollar global business in a changing society will be a defining moment in his tenure as commissioner. But for those who know him, Silver is ready.

“It’s a great moment,” said Wasserman. “It feeds on the intensity of the moment and the opportunity. He’s got an A-plus so far, but the story is not over. Managing the next steps will be important. “

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