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NATIONAL BASKETBALL ASSOCIATION MEDIA CONFERENCE

July 9, 2019

Adam Silver

New York, New York

ADAM SILVER: Thank you all for being here. Sorry to be a little bit late.

We just finished our Board of Governors meeting. Obviously we're here in Las Vegas for our Summer League. This is the second year in a row we've had all 30 teams participating. In addition, we have the Chinese national team and the Croatian national team participating in our Summer League.

As well, I sat with the Governor [Steve Sisolak] for a little while at the Summer League on Sunday. What we were saying is that we've become a fixture in essence in the month of July here in Las Vegas. We're responsible for roughly 30,000 room nights, and an estimated $50 million of economic impact here in Las Vegas. And I will say that the basketball has been great.

We anticipate by the end of the Summer League having attendance of roughly 150,000 tickets sold. So we're very encouraged there. Probably set a new record this year. And as you all know, it's an enormous amount of television programming for ESPN, NBA TV and distributed globally as well.

Just to touch on our Board of Governors meetings, I think a release went out just a few minutes ago that we've passed a coach's challenge. It's a one-year experiment. It's fairly limited. There were discussions at the Competition Committee as to whether it should be more expansive. We're trying to balance a game of flow and not create too much stoppage with trying to get our calls right, of course. So this is a challenge that we've been experimenting with in the G League for the last several years, used it last year in the Summer League and are already using it in this year's Summer League. So we'll see how it goes.

I should also mention we had two other Summer Leagues earlier in the summer, in Sacramento and Utah. We had four teams at both those leagues, and we had reports at the board meeting that they went extraordinarily well also.

Lots of summer basketball, lots of activity since the season ended. And with that, I'm happy to answer any questions.

Q. Obviously there's been quite a bit of star power moving this summer. I wanted to get your thoughts just on that as the basketball fan in you. But moreover the moratorium was June 30th at 6:00. That's when the negotiating period was to begin, and we had some deals being announced even before then. We had Sean Marks saying today that he learned on KD's Instagram that KD had chosen the Nets before the Nets even spoke to Kevin Durant. Is the league comfortable with how the moratorium just seems to be an idea right now and not something that's actually adhered to?
ADAM SILVER: Let me begin with player movement. We knew when we shortened contracts several years ago that the math would be the case that with shorter contracts you're going to have more free agency, more player movement in the summer. It's always a two-edged sword. On one hand, it creates a sense of renewal in a lot of markets. It gives teams an opportunity to rebuild. But the downside, of course, is for other teams, they potentially lose players.

I also think that with shorter contracts, it creates more often a sense of urgency with players. It creates greater incentives for performance. I think on balance it's working well. We didn't do it to create more interest in the offseason, but obviously it's created extraordinary media interest and fan interest. For the most part, that's been something that's positive.

But as I say, it's a long discussion we had at the Board of Governors meeting. There's pluses and minuses to almost anything that we do.

In terms of the moratorium, that was something we discussed as well, both the moratorium and the opening of discussions. Obviously, if deals are being announced immediately after the discussion period begins, there had been prior discussions.

I think to a certain extent, we always knew that there was some leakage, some slippage around those deadlines, and I think there was a certain amount that historically had been acceptable in the league.

I think the consensus at both our committee meetings and the board meeting was that we need to revisit and reset those rules, that some of the rules we have in place may not make sense. I think that's what we discussed. I think it's pointless at the end of the day to have rules that we can't enforce. I think it hurts the perception of integrity around the league if people say, well, you have that rule and it's obvious that teams aren't fully complying, so why do you have it. I think the sense in the room was we should revisit those rules, think about what does make sense for our teams so that ultimately we can create a level playing field among the teams and that the partner teams have confidence that their competitors are adhering to the same set of rules they are.

In essence, the marching orders to the league, together with our Labor Relations Committee, is that we should spend the next several months thinking about both what is in our unilateral power to change and then potentially what it is we should be discussing with the players when we sit back down for bargaining.

I will say that having been with the league for a long time, when we had the discussions with our board, things go full circle, because there's point, counter point to almost everything we do. Longer contracts have certain benefits. Then we end up shortening then, and your shorter contracts, then teams say, well, maybe contracts should be longer. And different cap systems have different consequences.

There certainly was a sense that we can do a better job. I think certainly as Commissioner of the league, part of my role is to ensure that we are a league of rules and that we ultimately have a level playing field. And I think that's in the interest of the players and the teams because at the end of the day, players want fair competition, too. They know if they and their representatives are following the rules that they're not being told that that cap space has already been filled. Everybody should have an interest in the rule of law for this league. Everybody recognizes, players and teams, that they're all part of something larger.

And so I think we can do a better job. I think these are fixable issues, and I think there's a will on everyone's part to make it better.

Q. One of the story lines that came out of the playoffs off the court were the declining television ratings in the playoffs. What do you attribute that to, and are you worried about a potential downturn for the league right now?
ADAM SILVER: I attribute the downturn in ratings to a number of things. I do not believe, and the data doesn't support, that it's from declining interest. We have other measurements of social media, fan support, attendance that demonstrate that, in fact, interest is growing, and certainly ratings, even conventional ratings, are growing outside of the United States.

One, we're in a changing media landscape. One of the attributes of this league is we have a young fan base. On the other hand, those young fans are the leaders in cord cutting and so-called "cord nevers," those who choose never to subscribe to cable and satellite. For the most part, with the exception of our Finals on ABC, our playoff games are only available through conventional basic pay television.

And in addition, we think there's a certain amount of pirating that's significant enough to have an impact on the ratings. That's something we're looking at, too. We've been having discussions with our television partners -- Disney, ESPN and AT&T and WarnerMedia -- as to how we should address that. It's amazing to me, again, having been at the league for a long time and having watched change over the years how much that change is now accelerating. I think even just even from the time we negotiated this set of television deals less than five years ago. I think there's a realization with us with our television partners that at the end of the day, even though we have six years left on these deals, there are potentially modifications we should be making so we can do a better job finding those fans.

So I don't think there's anything endemic to the league. In fact, at our board meeting we discussed the growth in popularity of the sport, the growth in participation, the fact that we have a young, diverse, global audience. All very positive indicators. But at the end of the day, a large component of our revenue come from tradition media. It's not something we can ignore and it's something that we and our television partners need to address.

Q. Zion Williamson was essentially shut down after one game. A bunch of other high picks not playing in this Summer League. I don't think I've seen anything quite like this before where so many high-profile players are not here. It's starting to have echos of the pre-draft combine where the top players just kind of opt out. Any concern whether it's the players or their agents or the teams themselves are steering away from this as a way to whether it's prevent injury or whatever, and how does that impact the Summer League?
ADAM SILVER: I'm not concerned. I mean, these are unique circumstances. Of course, Zion and RJ Barrett were out there, at least for the first half of the game. It was the highest rating we'd ever experienced in the Summer League. I understand why Zion was shut down, in essence. I spoke directly to David Griffin about it.

Again, I think that to the extent that he needs to focus on his conditioning and his health, the last thing we want is to put him at risk for a Summer League tournament or program. I recognize the Summer League is there for teams to use as appropriate. Frankly, at the end of the day, the real intention of the Summer League was for those non-drafted players to get exposure. So while it's fun to have them out on the floor and it's fun to have some of the veterans here as well, sitting in the stands and bonding with their new teammates, at the end of the day, remember we only have a two-round draft, so this is critically important exposure for a lot of U.S. players and international players, as well.

And I think that the attendance, the ratings reflect the fact that there's a fan base out there that's eager to see some of these new faces.

Q. Four Japanese players have had the honor to be a part of Summer League this year. Could you speak about how this could be a great stepping-stone for aspiring players in Asia as well as for the league and the global expansion of the NBA?
ADAM SILVER: Sure, and thank you for being here. We're very encouraged that -- sort of in part in my response to the last question about that fact that we have two national teams here, and there are a lot of international players who are now using this as a platform to, in essence, try out for our teams. The fact that we have four Japanese players here, we have numerous international players representing probably well over 20 countries here, is really impactful for the league.

When you sit in the arena and watch these games, this is the closest thing there is to NBA competition. It's sort of a hybrid of what our G League is. You have some top-notch talent out there on the floor together with players who are giving everything they have as a showcase to see not only if they can make an NBA team at the beginning of the season, but this is scouting also. Invariably, as teams need to replace players, injuries, other issues as the season goes on, this is where they have their notes, their video, from having seen them play against top-notch competition.

So we think, again, there's enormous global interest, interest in Japan as well from the Summer League. We think it's a really wonderful thing.

Q. The Clippers and Nets have never been known as free agency destinations. I think they've gotten a lot of credit for being well-managed. The Knicks didn't get any free agents. But all that said, amid all this player movement and talk of player empowerment, is there any concern at the league level that five of the superstars who changed teams went to Los Angeles and New York?
ADAM SILVER: Not particularly. I mean, especially to your point that you have players going to non-traditional big-market teams, and I think as you said, at the end of the day, we want to be a league where strong management is rewarded and that every team has the opportunity to compete. I think you have unique circumstances with those players and those teams, but I think it speaks to the fact that -- the significance of these brands, the fact that the Nets and Clippers have put themselves in position over the last few years to be attractive to top free agents.

So I think at the end of the day, it's positive for the league. I will say, though, I'm mindful of this notion of balance of power, and I think it applies in many different ways. An appropriate balance of power between the teams and the players, an appropriate balance of power I'd say among all our 30 teams, big markets, small markets, some markets that are perceived as being more attractive than others, tax issues, climate issues. At the end of the day, you want to make sure you have a league where every team is in a position to compete.

We have work to do. I think some of it is systematic, can only be addressed through collective bargaining. Others are, as I've talked about before, just changes in media, social media in particular, digital media that allows a player to receive global exposure regardless of the market they're in.

I never want to say it's without concern. Certainly we watch everything that happens, but again, having had a long-term perspective in the league, I think we continue to incrementally get better.

My sense in the room today was, especially when it comes to free agency and the rules around it, that we've got work to do. And as I said, it's still the same principles of fair balance of power and a sense that it's a level playing field. I think that's what teams want to know. I think they're put in difficult situations because when they're sitting across from a player and whether it's conversations that are happening earlier than they should or frankly things are being discussed that don't fall squarely within the Collective Bargaining Agreement, it puts teams in a very difficult position because they are reading or hearing that other teams are doing other things to compete, and at the end of the day, that's what this league is about: competing for championships.

As I said, my job is to enforce a fair set of rules for all our teams and a set of rules that are clear and make sense for everyone. I think right now we're not quite there.

Q. Piggy-backing off the player movement thing, Damian Lillard said a couple days ago that players have more power than the teams now when it comes to player movement. Is that a concern with the owners? And about the Summer League itself, a day shorter, more games, what's the general sense of how it's going?
ADAM SILVER: On the Summer League, the general sense is it's going really well. As I say, we've had some injuries, which are unfortunate, and some decisions for players not to play. It would be fun to have them out there. But I think generally as reflected in the attendance, as reflected in the ratings, we're having a very good experience here in Las Vegas.

The first part of your question in terms of balance of power, you know, again, I don't necessarily see it as player versus owner. And I think, again, when we step back, what's best for the fan? I think what's best for the fan is a 30-team league which everyone has the opportunity to compete with a fair set of rules. I think to the extent that the balance of power is out of whack a little bit, we should address it.

But also I think that the teams agreed we shouldn't be making decisions off a narrow set of circumstances. I mean, we have to look over the course of the agreement. These agreements are multi-year. We still have four years left in this Collective Bargaining Agreement. We're constantly talking to the Players Association. But as I said, even this notion of player power, what we're really talking about is a small group of players.

As I said, players want to know that they're in a fair system as well, where they have the opportunity to compete under -- like with all competition, for any of us who have competed, you want to know that the rules are known and that they're being enforced. And again, I think we have some work to do there when it comes to free agency. There's always been sort of stuff around the edges that's gone on. It may have moved to a new level due to a lot of circumstances, part of it due to the fantastic coverage you all provide. It's sort of the minute-by-minute coverage we all get. It puts pressure on teams. It puts pressure on players. It puts pressure on all of to you break stories.

And so for me, it's not so much as opposed to now the power has shifted, it's here we are, 2019, this is the world we now live in, it's a very different world than it used to be, and how should we adjust accordingly.

Q. This might be in the same ballpark. You've been asked before as it related to Anthony Davis about players with considerable time in their contract requesting trades, and in the past week we saw that with Paul George and Oklahoma City. What sense do you have of your teams' concern or lack of concern with this particular tactic by your player partners?
ADAM SILVER: First of all, you know of course that's nothing new in the league in terms of trade demands. But it concerns all of us. I mean, it falls in the same category of issues of the so-called rule of law within a sports league. You have a contract and it needs to be meaningful on both sides. On one hand, there's an expectation if you have a contract and it's guaranteed that the team is going to meet the terms of the contract, and the expectation on the other side is the player is going to meet the terms of the contract.

I will say, without getting into any specific circumstances, trade demands are disheartening. They're disheartening to the team. They're disheartening to the community and don't serve the player well. The players care about their reputations just as much.

And so that's an issue that needs to be addressed. There's not a simple solution there. This is a talent-driven business. Players have leverage. They have economic power of their own. But that's what Collective Bargaining Agreements are for, to sit down and come up with a sit of rules that are sensible and fair for everyone.

Q. Three years ago when the TV money came in you suggested the Players Association to smooth the cap and they rejected that and all the money came in and essentially one class got a bunch of money. Three years later how do you reflect on that, how things would have been different if the cap was smoothed, and is that affecting things in the future?
ADAM SILVER: It's hard to go back. As I said at the time, that was the Players Association's right, to reject our proposal to smooth in the money. It's one of those things where you never know how things would have turned out otherwise. If a particular player hadn't made a certain situation, we probably wouldn't have been talking about it as much.

I will say I think that is a system issue that we need to address in the future. It goes to the whole system we have now in terms of the moratorium and the need to set the cap. One of the things we talked about today with the governors is are there different ways to do things.

Right now the reason for the moratorium is we need the time to set the cap based off the financials of the prior season, but there potentially are other ways to do things. You could peg the cap and adjust it later.

What we're realizing, and I think it was a constructive discussion among the team owners, was that it's less about pointing fingers at the end of the day. It's that the world has changed, and in part we're the victims of our own success. We never used to have this kind of coverage in the offseason. We never used to have this kind of attention to Summer League basketball. And as I say, the 24/7 attention on free agency creates new pressures.

In fact, the reason we set up the system where you could begin discussions prior to the setting of the cap was in the old days before we had the system, we had a similar issue in terms of what we have now. The cap would be announced, and instantaneously deals would be announced, and people would say, how could that have happened? So we said, all right, let's create time. We'll have this built-in time where we'll have discussions before you can enter into a binding agreement. But clearly then whether teams lived under that system precisely, I'm not sure, but clearly that time then advanced. So we're back where we used to be.

So it may be, for example, we should change rules in terms of a team's willingness to talk to its own player, that it's silly to think a team isn't going to talk to its own player about a potential extension. It may be that we should allow the discussions to begin much sooner, recognizing that it's likely to happen anyway. And that's what I said earlier.

The one strong conviction I have is that we should not have rules that are not strictly enforced. We know that's the case right now. Whether that's by virtue of practice, whether it's because just the world around us has changed, whether it's because players have power that they didn't used to have, I'm not so sure.

I'm not sure at the end of the day that's all important. I think what we do know is, all right, we have all this new information now, let's step back, let's reset and let's talk to our Players Association about what system makes sense going forward.

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