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NBA’s Silver Breaks Down Tech’s Effects on the Game

On the NBA’s opening night this season, commissioner Adam Silver was in Cleveland as LeBron James and the Cavaliers received their rings for winning the championship last June. When the basketball game ended, he made his way to the Indians’ adjacent baseball stadium, where Game 1 of the World Series, Indians versus the Cubs, was under way. He and his wife caught the last five innings.

The Cubs would go on to win that epic Series, of course, drawing ratings baseball hasn’t seen in 25 years. “Wearing my sports executive’s hat, it demonstrates how vibrant the marketplace is for live major league sports,” Silver says.

Under Silver, in his third year on the job, the NBA has been a leader in marketing its players and in using social media to spread excitement about its game. Not coincidentally, the league is starting new TV contracts that will bring it $24 billion over nine years. These and other achievements during Silver’s run, which followed a long stint as David Stern’s lieutenant, helped make Silver one of B&C’s Sports Executives of the Year. Silver spoke with B&C business editor Jon Lafayette. An edited transcript of their conversation follows.

Is additional marketing a part of the new TV agreements?
It is. What’s new in this agreement is a separate fund that we agreed to use solely to market our telecasts. In addition, our partners invest an enormous amount in marketing our sport and we’re very fortunate in that while [Turner president] David Levy and [ESPN president] John Skipper are competitors, they have a very strong working relationship when it comes to the NBA. And the three of us meet frequently to talk about what we can collectively be doing to build interest in the sport.

What was the last good idea that came out of that meeting?
It was the Turner special one-hour pregame show on opening night dealing with social issues around professional athletes this summer. It was an opportunity to provide a platform for our players and commentators to talk directly about these issues and how they impact their lives.

Are you concerned about the drop in viewing of regular-season NFL games?
I’m not concerned. One, we’ve just seen all-time highs for the NBA and Major League Baseball. In addition, although NFL is down somewhat so far this season, they are still averaging roughly 15 million viewers a game and so that still makes them the highest rated programming of any genre on television today. And my sense is part of the issue for the NFL right now is one of duration rather than reach, that for whatever reason, viewers are watching games for fewer minutes than they were last season and my sense is they will address that.

How will Turner’s new Monday night NBA franchise work?
I have enormous confidence in Turner’s production and I know that from conversations with David Levy, they are looking for ways to differentiate the Monday-night package from other Turner games. And I think they’re still exploring internally what they will be doing, but stay tuned. In terms of talent, format, and broadcasting approach they’re going to be trying new things on that Monday-night package.

The NBA has created new ways to watch teams and individual games on League Pass. How is a League Pass subscriber different from other TV viewers?
It is a different kind of relationship in that it’s one-to-one and they have self-identified themselves to the NBA. It’s still in terms of the technology a bit frustrating for me in that the way the transactions work on our phones; it’s still somewhat clunky. And I look forward to the time for example where there’s a marriage of social media and transactional television so that for example you see on your Twitter feed that Steph Curry is going for 60 points and it’s the fourth quarter, that it’s ‘click’ and you’re now watching the game.

How do you differentiate what you do over digital and social vs. the experience on TV?
Mark Cuban at one of our technology summits used the analogy of snacks and meals. We view [social media] as a form of marketing, as a form of developing and engaging new fans and current fans. And on top of that, for example, what we’re doing with Twitter this year, we’re also creating new forms of programming, not just highlights, to make available directly to our fans through social media.

Does it concern you that you have all these Snapchat users being able to broadcast your product?
I’d say, if it does, it doesn’t matter, because that’s where the world is going, especially sports. We all have to recognize we only have so much control and I think it’s a realization that our players have that there are 20,000 fans who are holding in their hands the equivalent of a high-definition camera with high-definition audio as well.

Some see the NBA deal being the high point in television sports rights. Can they go higher?
I think rights fees will absolutely continue to go higher. This is my 25th year in the business and through every cycle there have been commentators who have said, ‘This is now the peak.’ To me, if I look at an emerging set of new competitors for rights fees, many of the companies we talked about before who are moving into live streaming, companies like Facebook, Twitter, YouTube, Amazon Live, Netflix, my hunch is next time our rights come to market that those companies and companies that haven’t yet been invented or that we’ve heard of will also be at the table seeking to bid on live premium sports rights. So I’m very bullish on the future values of our teams.

What are your sponsors asking for?
One of the things that our marketing partners are asking for is more data. They would like to know more specifically about who our consumers are. And I think that we’re over time going to have the ability to be much more customized in terms of the ads that we deliver to our fans, I think you’re going to see over the next five years a quantum leap in the kind of data that’s going to be available to advertisers.

Does the NBA have a data science group?
We do. In fact, we just hired a new executive who had spent 15 years at American Express, Doris Daif, to lead a new group here specifically focused on customer relationship management.

In international markets, is the NBA expanding faster with traditional or digital partners?
We’re running out of countries to reach. Our games are seen in 215 countries and territories in 49 languages this year and based on data from last season over 1 billion people on this planet watched some portion of an NBA game, so that’s one out of 7 people in the world. I think much of that reach comes through introducing people to our game around some form of social media. And whether it’s the players themselves through their social media accounts, whether it’s Instagram or Facebook or Twitter, or our teams doing a tremendous job globally with their outreach, and then the league efforts together with our partners, we’re connecting with people in ways that were unimaginable just two year ago.

What more can you do for your television partners?
They would like more access. We have interviews with coaches now, we have players who wear wireless mics, but we are looking for ways to bring that action that you experience in a courtside seat directly to our fans who are watching on television. If you’re sitting courtside at an NBA game, and very few people get to do that, you hear coaches talking to players, you hear officials talking to players, you hear players talking to each other. And I think the challenge for us is through technology how do we then take that experience and replicate it for people watching on television or whatever device they’re using.

How about virtual reality?
We’re experimenting now with virtual reality through League Pass and of course Facebook owns Oculus and so that’s something we’ve been spending a lot of time with them on. I think it’s early days of virtual reality but especially for our fans outside the U.S. who will never ever have access to an NBA arena I think while it’s not a replacement for the live experience, we’re hoping it’s the next best thing. It will give them a sense of being in an arena, of having someone sitting to their left and to their right, sitting in front of them and behind them. It can create that shared experience that you have by being in the arena. So we’re spending a lot of time on that.