We open with David Stern striding atop a conference table—surrounded by television executives, gesticulating theatrically, debating a point with his nimble, sharp-edged wit—not because this is the modus operandi of the commissioner of the National Basketball Association, but because the image fits. Even if the event never happened (and there are those who doubt that it did), it fits.
"I really don't think he has the agility to do that," says Howard Ganz, a chum of Stern's since their Columbia Law School days in the mid-'60s and a partner at Stern's former law firm, Proskauer Rose Goetz and Mendelsohn.
"No, I never heard of him jumping on a table," says Larry Weinberg, chairman emeritus of the Portland Trail Blazers, whose team was fined a quarter of a million dollars by the NBA in 1984 for contacting Hakeem Olajuwon's agent while Olajuwon was still Akeem and, more important, still in college. "I doubt he could jump that high."
Even Stern can't quite recall the incident, although he stops well short of denying it. "It's totally plausible, but as a rule I don't stand on tables," he says. "I am an inveterate pacer."
And thinker and kibitzer and needler and innovator. Stern's mind is a barrel of fermenting ideas, and the NBA is a master with an unquenchable thirst. The reason why it is plausible for him to have held court on a conference table—plausible in a way it would never be for baseball commissioner Fay Vincent or National Hockey League president John Ziegler—is the unpredictable and spontaneous nature of the man himself. "When David sees an opening, he takes it," says David Beckerman, the president of Starter International, a sportswear company that last year paid the NBA more than $2 million in royalties on the sale of apparel bearing the league's logo and/or the logos of its teams. "I look at David as a basketball player in that respect. Other people may stick to some grand plan, but David reacts to the defense as he's coming down the court. He has polished instincts."
Stern prods, he charms, he teases and, when necessary, he tears apart to get his way. One of the great myths surrounding this 48-year-old, 5'9", basketball-shaped man is that he is the cuddly commish, quick with a joke, invariably gentle and the picture of equanimity. "His temper is part of his personality," says David Green, senior vice-president of marketing for McDonald's, which is one of the NBA's principal sponsors. "He can yell and rant and rave with the best of them. But he never does it in a threatening way. He is never overbearing. You have to have a feel for theatrics, and he does."
"Temper's not quite right," says Russell Granik, Stern's deputy commissioner, who has worked with Stern at the NBA for the last 13 years. "That describes someone who loses his cool. When David gives you a hard time, it's calculated."
Stern became infamous around CBS—the network that televised NBA games from 1973 to '90—for calling on Monday mornings to critique the weekend's telecast. "He used to tell me he could run CBS Sports better than I," recalls Peter Lund, a past president of that entity. CBS Sports executive producer Ted Shaker remembers that Stern read him the riot act for having closed an '83 telecast of a New York Knicks-Philadelphia 76ers game by panning across vast expanses of empty seats in Madison Square Garden. "I can think of any number of phone conversations where he did all he could to reduce me to the size and stature of an ant," says Shaker, "or at least to leave me with the opinion that my brain is the size of an ant."
"It's not table pounding," says Beckerman. "It's more his cutting you up and putting you in your place. You have to be prepared with him. You have to know your facts."
Dave Checketts, former president and general manager of the Utah Jazz and vice-president for development of the NBA, and now president of the Knicks, vividly remembers the first time he met Stern, in the early 1980s. "I was working for Bain & Co., a Boston management-consulting firm, and some of my clients were interested in buying the Celtics," says Checketts. "David invited me back to his office, and before I knew it, he's screaming at me. You see, I told him I'd been studying the league and that I had suggested to my clients that it would be ridiculous to get involved in the NBA. The league looked like it was heading for disaster. I asked David how my clients could justify plunking down $18 million for the Celtics. His approach is always to throw you off guard, and he looked at me and said, 'I thought Bain & Co. was a good firm.' Then he asked if I had considered this and that, and went on to explain how $18 million was actually a bargain. We battled back and forth for 2½ hours. You can't be loose with your facts or imprecise with him, or you'll pay with a pound of flesh."
As it turned out, of course, $18 million for the Celtics in the early 1980s would have been a bargain, since they are now valued at between $100 million and $125 million. "David's what we call a shaker and a mover," says the Los Angeles Lakers' Magic Johnson. "He gets it done."
He has gotten it done so effectively since taking over the NBA on Feb. 1, 1984, that no one disputes that Stern is now the best commissioner in sports, the best in the history of basketball and every bit the equal of the best sports commissioners of all time, such as the National Football League's Pete Rozelle and baseball's Kenesaw Mountain Landis. Certainly Stern is the best remunerated: NBA owners, upon hearing in 1989 that he had been approached by the NFL during its search for an heir to Rozelle, rewarded Stern with a five-year, $27.5 million contract that included a $10 million signing bonus. "You have franchise players. He's a franchise commissioner," says Pat Williams, general manager of the Orlando Magic.
In his seven years as commissioner and, to a certain extent, in the years immediately before he took the job, Stern has reshaped a floundering, financially strapped league into an entity that is the envy of professional sports—an innovative, multifaceted, billion-dollar global marketing and entertainment company whose future literally knows no bounds. "We see ourselves moving into areas that ordinary fans don't associate with us," says Stern. "I've been telling our owners for years that we're becoming a mature industry. What else is there? Publishing, events, licensing, home entertainment—all on a global basis. It's how you conceptualize your corporate goals."
But the real miracle of Stern's tenure is that, while redefining the NBA, he has not only apparently made no enemies, but he has also created the most harmonious league in sports. NBA players are happy; the owners are rolling in dough; the sponsors are thrilled to be filling the NBA coffers with cash; the fans are bedazzled; the league's new television network, NBC, is making money on its NBA programming; international basketball is booming; and the poor slobs behind the scenes, those 275-plus employees in the NBA offices, seem to think they're working in the Garden of Eden. In Stern's mind they're all members of the NBA Family, and if the image of Stern as the cuddly commish is something of a myth, the image of Stern as the NBA patriarch is not. He cares. "He makes time for people, whether it's over a corned beef sandwich in his office or in a phone call late at night," says Robert Wussler, CEO of Comsat Video Enterprises, which is part owner of the Denver Nuggets. "He is warm, intelligent, street-smart, and has a terrific relationship with every member of the league. A best-friend relationship."
"The atmosphere here is different from that in other leagues' offices," says Steve Mills, 31, vice-president in charge of NBA special events. "We're younger, and maybe you have to be to put up with all the craziness. But we all believe we're on the cutting edge of something. You feel as if, in 10 or 15 years, people will look back on this period at the NBA as the beginning of something completely new."
To fully appreciate where the NBA is and where it is headed, we must first look back to where the league was just a decade ago. In the 1980-81 season, 16 of the NBA's 23 teams lost money. Total attendance was down almost a million from the year before, and teams were playing to an average of only 10,021 fans per game, about 58% of the capacity of their arenas. The worst-run franchise in the league, the Cleveland Cavaliers, lost more than $4 million while selling only 28% of its seats in '80-81.
In the league's New York offices, where commissioner Larry O'Brien had just promoted a young lawyer named David Stern to the post of executive vice-president, there were about 40 employees, including just one person in public relations and three in marketing and broadcasting. There was no entertainment division, no production facilities. The NBA was shunned by Madison Avenue because it was perceived as a league that was drug-infested, too black, and too regional. "If you had 30 minutes with a prospective sponsor," recalls Mills, who spent the 1984-85 season banging in futility on the doors of corporate America, "your first 20 minutes were spent trying to convince him that the players weren't all on drugs."
As the low point of the pre-Stern era, many in the NBA cite the 1980 championship series between the Lakers and the 76ers, during which CBS refused to broadcast the sixth and, as it turned out, final game live. It was shown, tape-delayed, at 11:30 p.m. Eastern time. Others say the league's darkest hour was an '82 article in the Los Angeles Times reporting that 75% of NBA players were on drugs.
"We were in deep yogurt," recalls Richard Bloch, one of the limited partners of the Phoenix Suns. "But David changed the direction of the league. We, the owners, were accustomed to doing business the old-fashioned way. David had a much more progressive outlook. He was just plain smarter."
Business the old-fashioned way was, pretty much, every franchise for itself. "There was more unanimity in the streets of Paris during the French Revolution than there was in an NBA owners' meeting," says one league executive. Free agency had sent salaries spiraling upward, and the question became not whether the league would have to shrink, but how many teams would have to be canned. "In 1982, after dozens of meetings, we came to the conclusion that we were about to lose a half-dozen teams," recalls Granik, who at the time was the NBA's general counsel. "We actually set up a committee to study how we were going to do that."
Out of this abyss stepped Stern. The son of a Manhattan delicatessen owner, Stern was a rare amalgam: a brilliant young lawyer who was blessed with business instincts, marketing sense and a disarming sense of humor. Strangest of all, he was likable. He remembered people's names. He took an interest in their families. He was, one hears over and over again, a regular guy. A little sarcastic, perhaps, but without a mean bone in him. "David Stern dismisses the adage that nice guys finish last," says Michael Goldberg, a former general counsel of the American Basketball Association, who now runs a sports and entertainment marketing firm called the National Media Group. "David's father ran a successful deli in New York. To be successful in that business, you have to have great rapport with your customers. You have to get them to come back, even if the corned beef is a little dry and the apple pie a little stale. You have to give the customer a smile, a pleasant greeting, a sense that he is being taken care of. David Stern understands that, and I don't think it would be farfetched to say that he has applied that to the NBA."
Stern, who grew up a Knick fan, represented the NBA in various court cases as far back as 1967. He worked on the landmark Oscar Robertson antitrust settlement in '76, which paved the way for free agency, and then hammered out the details of the ABA-NBA merger, also in '76. In '78 O'Brien persuaded Stern to leave Proskauer Rose and become the league's first general counsel. Two years later Stern was promoted to the newly created position of executive VP. "I was told, 'You're in charge of recruiting new people for broadcasting, public relations and marketing,' " says Stern. "That was my stated charge."
Essentially, Stern was being given the opportunity to revamp the ravaged image of the league. But he took his stated charge a step further. By focusing the owners' attention on the proper ways to market their product, he actually revamped the way the league did business. "I was shocked, when I went to my first league meeting, at how competitive and uncommunicative the teams were," says Paula Hanson, who is now head of the NBA's Team Services, the division Stern created to disseminate information among the clubs. "There was a real us-against-them attitude."
Today, if the Lakers, for example, discover a hot new tune that the fans in the Forum love to hear during intermissions—foot-stomping, hand-clapping music—Team Services wants to know about it. If the Celtics land a new radio sponsor for their local broadcasts, Team Services spreads the word to the other clubs in case that sponsor wants to sign on in other cities too. If the Chicago Bulls sign a better concessions deal than the Knicks, Team Services gets it on file.
Before Stern there was no coordination. Says former Team Services head Bob King, "All the teams were islands unto themselves. What Stern did was take the islands and turn them into a continent."
"He runs a tight ship and a tight meeting," says Abe Pollin, owner of the Washington Bullets. "If the owners are having a meeting, 27 guys in one room, and over in the corner two or three of them are talking about something else, David will interrupt them and get them into the discussion the entire group is having."
Says Checketts: "This is the way he is with owners. When I was in Salt Lake, Frank Layden, who then coached the Jazz, used to talk a lot about how bad he thought the refs were, and that got David hot. David kept trying to get Frank to voice his complaints through proper channels. But Frank kept berating the refs publicly. I was in [former Jazz owner] Sam Battistone's office one day when David called, enraged about something Frank had said about the refs. He just ripped into Sam, saying something to the effect of, 'If you can't control your players and coaches to get them to understand how we do business in this league, I'm going to fine you more money than you make selling tickets.' Battistone, whom [at least technically] David works for, hung up the phone and said, 'We've got to do something about Frank.' Then he called Frank right in."
What kind of people did Stern look for when he began hiring? "They had to be the kind of people you enjoyed spending very, very long workdays with," says Stern, whose work ethic soon became legendary. "They had to understand the enormous opportunities that lay ahead of us. And they had to be young, because we had a budget. I'm 48, and I don't think there are four people older than me of all the employees of the NBA. I'm beginning to resent being called Uncle David."
Don't believe it. "One of David's great strengths is that he placed a corps of individuals around him in the league office who are very smart, very loyal and very dedicated to the game," says Goldberg. "No hours are too long, no amount of travel is too much. Several of them are lawyers, and they have that lawyer's mentality: The trial's next week, so we will work around the clock to get it done. What you had at the NBA in the early '80s was a bunch of young guys eating tuna fish sandwiches at their desks, drinking coffee out of paper cups and getting the job done."
That tradition is very much in place today. The best time to get hold of Stern—or any of his staff—is lunchtime, because as likely as not they'll be eating in. Meetings are still frequently held in the hallways. "The atmosphere is a bit chaotic but very dynamic," says 38-year-old Rick Welts, head of NBA Properties, who was one of only five people in that department when he was hired by Stern in 1982. NBA Properties, which handles all licensing of NBA merchandise—everything from "official" T-shirts to backboards—is expected to generate $1 billion in gross retail sales this year and has more than 100 employees. "Sixty-hour workweeks are the norm," says Welts, "but the feeling we all share is that we inherited an abused property, and in the next 10 years basketball is going to be the Number One sport in the world."
"When we stop growing, not just in numbers but in opportunities, then we'll have people leaving," says Stern. "There's a lot of autonomy around here. Room for initiative. We challenge each other. This is a business that is constantly redefining itself. The NBA has gone from the arena business to the radio and television business to the concessions business to licensing to real estate to home video. My mandate from the owners is, It's great, Stern, as long as it's successful."
The single most important event in the NBA's turnaround came in April 1983, when the NBA Players Association, headed by the late Larry Fleisher, agreed to a proposal put forward by Stern and O'Brien for a salary cap. Fleisher recognized the financial plight of the NBA owners; he saw that if something drastic wasn't done, the league would almost certainly be cut back from 23 teams to 16, costing his association 70 or 80 jobs. The landmark agreement called for the players to get 53% of the gross revenues (gate receipts and local, network and cable television fees) and the owners, the remaining 47%. "That's been the cornerstone of our financial success," says Granik, "although none of us knew it at the time."
The original idea of a salary cap came, ironically, from the head of the NFL Players Association, Ed Garvey, who proposed it in 1982 only to see it turned down by NFL owners. "What made it happen in basketball was that the players and management were in the gutter together," says Charles Grantham, head of the NBA Players Association. "Everyone saw how necessary it was for both sides to work together to survive."
The agreement ended a decade of acrimonious relations between NBA players and owners, and, more important, it made the two parties partners. If the league prospered, the players would prosper. Since the salary cap was instituted, NBA fans have not had to read about the tiresome labor squabbles, strike threats, arbitration hearings and scab games that have tarnished other professional sports. Says Welts, "It's only in the last few years that the players, as opposed to the lawsuits and the drug problems, have become the focus of the NBA."
The NBA's drug difficulties were effectively addressed when, shortly before Stern became commissioner, the league and the Players Association unveiled the most progressive drug policy in sports. If a player who used drugs came forward voluntarily, the NBA would quietly help him find treatment, without recrimination. The league, however, had the right to administer drug tests to players if it felt there was reasonable cause to do so, and anyone failing a test would be thrown out of the NBA and not allowed to apply for reinstatement for two years. In 1988 the league expanded its policy to include random drug tests for rookies.
The NBA also has a rookie orientation program. The newcomers are counseled on how to deal with the press, how to handle money and, generally, how to adjust to life in the grown-up world of the NBA.
"A good marketing guy knows that he has to get the product right before marketing it," says Scott Creelman, head of international sales for Spalding Sports Worldwide. "That's what Stern did with basketball. He cleaned up the product first. Only then did he start marketing."
Stern scoffs at the notion that he had anything resembling a grand strategy for marketing the NBA. "I'd love to reach into the bottom drawer and pull out a master plan to show you," he says. "It's not there."
The master plan may not be there, but the legacy is. Stern wasted no time putting his marketing savvy to work. Before he became commissioner, the league had decided to take the moribund NBA All-Star Game, which was a dud with fans and players alike, and transform it in 1984 into the All-Star Weekend. The event's slam-dunk competition, and the three-point contest that was added in 1986, were borrowed from the ABA. The Legends game was borrowed from the old-timers' games in baseball. And the huge parties for the NBA's corporate sponsors were modeled after those given at the Super Bowl. "We're very eclectic," says Stern. "We like to look at successful things and ask, How does that apply to us?"
Under Stern's watchful eye the NBA All-Star Weekend has become the league's showcase event. This year it took place in Charlotte, N.C., and the league needed 9,000 tickets and 3,500 hotel rooms to accommodate its guests. Just how watchful is Stern's eye? When the Ail-Star Game was held in Seattle in 1987, he noticed that the line at a buffet table was too long. Stern called a staff member over and gave him some suggestions on how to get the line to move faster. Can you imagine Bowie Kuhn doing that? "David is not a manager who simply assembles his troops and says, 'Do it,' " says his old law firm colleague Ganz. "He joined in the fray. There was no function he considered beneath him."
In 1985, just in time for Patrick Ewing's graduation from Georgetown, Stern instituted the NBA lottery to determine which of the league's seven bottom teams got to draft first. Before that, the team that finished with the worst record always picked first. Not only did the lottery create a TV event that could be sold to a sponsor, but it marked the first time a sports league had done anything significant to discourage bad teams from playing to lose at the end of the season in order to improve their draft positions. In '87 Stern began sowing seeds overseas with the first McDonald's Open, an international preseason tournament featuring one team from the NBA and three teams from Europe that has raised international interest in the NBA.
"Nobody, including me, envisioned that this young, bright attorney would have such marketing genius," says Pollin, who was on the committee that recommended Stern to succeed O'Brien. "We used to think it was a big deal if we broke even with NBA Properties. David thought that attitude was ridiculous, and he told us so. Then he showed us how to start making money at it."
Stern has squeezed golden eggs out of the NBA goose every time he has reached into the nest. Under his leadership the league broke its attendance record for seven straight years, beginning in '83-84. That string ended this season, because the Minnesota Timberwolves moved from the Metrodome into the smaller Target Center. Nevertheless, the NBA averaged 15,245 fans per game, 89% of capacity, for '90-91. During Stern's tenure NBA gross annual revenue, which includes gate receipts and TV money but no income from the sale of licensed merchandise, has soared 437%, from $160 million to $700 million. Salaries have shot up by 177%, from an average of $325,000 to $900,000. Network television fees have gone from $22 million per year to $150 million, and cable TV fees from $5.5 million to $68.75 million. The average worth of an NBA franchise, meanwhile, has more than tripled, from $20 million in the early '80s to $65 million today, and the premier franchises—the Bulls, Celtics, Knicks, Lakers and Detroit Pistons—are worth more than $100 million apiece. While the television ratings of all other major sports have fallen in the last decade, the NBA's numbers are up by 21%.
Why basketball? Why now? "Every sport has a different niche," says Stern. "Baseball is loaded with tradition and has all those wonderful statistics. Green grass. Fresh air. Family. Football has that niche of gathering on Sunday afternoons, very passionate followings, few games. Basketball, I think, is very contemporary. Our players have become almost like entertainers. That's a niche that somehow evolved."
"David came in and looked at the NBA and saw it as something more than just sports," says Piston guard Isiah Thomas, the president of the Players Association. "It's really just entertainment. It's a Michael Jackson tour, a Rolling Stones tour. He saw it as an NBA tour."
One of the models that Stern dangled before NBA owners was Disney. "They have theme parks," says Stern, "and we have theme parks. Only we call them arenas. They have characters: Mickey Mouse, Goofy. Our characters are named Magic and Michael [Jordan]. Disney sells apparel; we sell apparel. They make home videos; we make home videos."
An NBA game is no longer marketed as, say, New York against Chicago. It's Patrick and the Knicks against Michael and the Bulls! The annual slam-dunk and three-point contests give the league a chance to promote up-and-coming players—who outside of Boston had heard of Dee Brown before this year's All-Star Game?—which helps to ensure that the supply of promotable stars is constantly replenished.
The NBA is also planning for the future by wooing an entire generation of preteenagers. "Kids 11 and 12 years old are more interested in basketball than ever before," says Stern, "and we're going to try to convert them into lifelong fans."
Very quietly, basketball has become the sport of choice for the Teenage Mutant Ninja Turtles set. A SPORTS ILLUSTRATED FOR KIDS survey answered by 4,478 subscribers (ages 9 to 12) revealed that both boys and girls preferred reading about pro basketball to reading about either pro football or baseball. That isn't an accident. Under Stern's direction the NBA's public-service announcements have all been about issues that affect young people—child abuse, school attendance, drugs. When the league decided to launch its Stay in School program before the 1990 All-Star Game in Miami, it promised that any middle school kid in that city's system who had perfect attendance during the month of January would be admitted to a special pregame "jam session." Interest was so high that 26,000 kids qualified, more than three times the number school officials had predicted.
When Stern negotiated the league's four-year, $600 million television deal with NBC, which went into effect this season, he got the network to guarantee the NBA a free half hour of airtime sometime between 11 a.m. and 1 p.m. on Saturdays—right after the morning lineup of cartoons. To fill the slot, NBA Entertainment produces Inside Stuff, a fast-paced, highlight-filled show that has a budget of $100,000 a week and is clearly geared to an audience considerably younger than the male 18-49 set to which the NBA has traditionally appealed.
When NBC successfully lured the league away from CBS, most industry observers assumed that popular as basketball had become, the network would lose money on the deal. Six hundred million (not counting the free half hour for Inside Stuff) was, after all, a 340% increase over the cost of the previous CBS package. It now appears that NBC will make a small profit for the '90-91 season and the current playoffs, which is what Stern had anticipated all along. "We want to stay in business with whomever we're in business with," he says.
From Stern's point of view, the NBA has a vested interest in assuring the deal's profitability. If NBC makes money this time around, Stern can pretty much guarantee the owners that in four years their television revenues will increase. That message has been passed along to the NBA's 15 corporate sponsors—Madison Avenue has done a 180-degree turn and is banging on the league's doors these days. "The NBA is clearly ahead of all the other leagues in terms of the warm and fuzzy feeling that fans and advertisers get as a result of their association with the sport," says one TV executive.
Schick, for example, which does little other television advertising, has made a series of commercials that feature NBA players. "It's a very high priority of ours that our sponsors think the NBA on NBC is a place they ought to be," says the commissioner. "If we were approached by two potential advertisers who made similar products, one of which would support the NBA on NBC and the second of which wouldn't, we'd go with the first one—even if the second company were to put more money directly into our pockets. That's the advantage we have in representing ourselves in negotiations."
Says Dick Ebersol, president of NBC Sports, "Stern is the only sports executive I know who, I honestly believe, would always weigh taking money against the long-range effect on the product. He's also the only league executive who, I feel, knows my business as well as I do. I have never, ever had a meeting with him where the room wasn't just full of possibilities."
Stern's knowledge of the television business goes back to his early days with the league, when he was attending cable TV seminars given by investment companies before cable was commercially available. He has studied the various means by which the NBA might implement pay-per-view, and can discourse about transponders, video compression and Direct Broadcast Satellite systems as readily as Pat Riley can explain an illegal defense. Stern had this year's All-Star Game taped for high-definition TV so that the game could later be shown on that medium in Japan, where high-definition TV is commercially available. He felt this might expedite the NBA's entry into the Japanese market. "His motto is 'Knowledge is power,' " says Sandy Brown, head of international television sales for the NBA.
Stern has plans for Stateside pay-per-view, but they do not include the words unrealized bonanza. He says, "When you play some 1,100 games during the course of a season, no one of them is going to have the impact of a Tyson-Holyfield fight." What Stern does envision is bouncing a scrambled signal of local telecasts of NBA games off a satellite and making pay-per-package deals of those telecasts available to sports bars and private homes that are equipped with satellite dishes. Perhaps as early as next year, a Celtics fan living in Detroit, say, will be able, for a small fee, to watch his beloved Green play 82 games a year. Since there are approximately three million satellite dishes in the U.S., Stern conservatively figures that pay-per-package will eventually bring the NBA a tidy $5 million a month.
But greater opportunities lie in creating and selling programming. The league is currently building a 45,000-square-foot production facility in Secaucus, N.J., in which NBA Entertainment will produce not only Inside Stuff but also halftime features, vignettes for sponsors, in-house ads and promos, home videos similar to the hot-selling Dazzling Dunks and Basketball Bloopers, and the 60-minute, 90-minute and uncut versions of the NBA Game of the Week that are now being sent to 77 countries. "There are 30 million viewers of regional sports channels in this country," says Stern, "and a lot of programming needs. So we haven't tapped out domestically by any means. But there are enormous possibilities for exploitation of our normal product overseas. Eighty-five percent of the world's television viewers do not reside in the U.S. Our international TV revenues are minuscule right now, but someday they might become important."
That's an understatement. To be precise, the NBA annually receives about $10 million from European and Japanese television, which accounts for less than 2% of the league's total revenues. But by the year 2000, foreign TV fees will have grown exponentially because, unlike football and baseball, basketball is already being played all over the world—in South America, the Middle East, Australia, the Far East, the Soviet Union. Some people think basketball may already have surpassed soccer as the world's No. 1 sport. "Basketball is a game for the younger generation," says Borislav Stankovic, head of the International Basketball Federation (FIBA), the sport's international governing body. "It is a very telegenic game that corresponds to the dynamics of modern society. It is sometimes said that people use horses to get to soccer games and jet planes to get to basketball games."
And virtually everywhere basketball is played—176 countries are members of FIBA—the NBA is recognized by name and trademark. Says Stern, "If you haven't seen it, you can't appreciate how much a part of the European culture the NBA is."
Isiah, Magic and Michael are as well known on a first-name basis in Rome and Barcelona as they are in Detroit, L.A. and Chicago. As many as 50 foreign journalists covered last year's NBA Finals, and NBA highlight shows are increasingly featured on the proliferating cable channels of Europe. In one example of how the NBA takes the long view over the quick payout, Stern recently recommended that the league accept a $200,000 offer from a cable channel in France rather than a $1 million offer from a smaller French pay-TV channel called Canal Plus. "Ultimately, what's going to help the league most is greater exposure," says Stern. "We've got the luxury of doing some long-term foundation building."
Spalding, one of seven companies selling league-licensed products abroad, expects to do $30 million in overseas sales of NBA basketballs and clothing in 1991. One small example of the cachet of the name NBA overseas: During the Christmas holidays some $5 million worth of NBA Cologne was sold in Europe. Each bottle of this dreadful (trust us) fragrance came with an entry form for a contest, the winner of which was given two tickets to the All-Star Weekend in Charlotte. Sixty thousand Europeans entered, providing the NBA with—presto!—an instant mailing list for future marketing campaigns.
To help tap into the enormous Far East market, the NBA staged another first by opening its 1990-91 season in Tokyo with two games between the Jazz and the Suns. The games counted in the regular-season standings because, according to NBA general counsel Gary Bettman, "the Japanese don't like make-believe things. They wanted to be sure that the games really counted. It was our way of showing respect and doing something historic."
The league took to Japan its own floor, 24-second clocks, baskets, backboards, stanchions, scorers' table, pom-pom girls, The Chicken, you name it. The 10,000 seats at Tokyo's Metropolitan Gymnasium (top price: $170) were sold out both nights, and the NBA merchandise the league had taken over was gone by half-time of the first game. "Basketball's not a big sport in Japan," says Bettman, "but people so marvel at our athletes that they can't help but get interested in it. They want us back next year. We think Japan will be our jumping-off point for that part of the world."
The country that the NBA—and two of its major sponsors, Coca-Cola and McDonald's—really wants to jump off toward is China, where basketball is already huge. It was with an eye toward that market that the NBA chose as its Japanese partner the conglomerate C. Itoh & Co., which does the largest volume of trade with China of any company in the world. "We're already televising 10 games a year in China," says Stern, who points out that the games get great ratings. "Over there they say that Michael Jordan plays for a team called the Red Oxen."
What's to come of all this? Is the NBA destined to become an intercontinental league? Not in the foreseeable future, according to Stern. "We don't have any plans for European-based NBA teams," he says. "Our job is to help everyone in the basketball business make the sport grow, and out of that will come tremendous opportunities. The McDonald's Open, the World Championships and the Olympics are the three areas we're looking at right now."
The McDonald's Open, as Stern envisions it, will become a world club championship beginning as early as 1994. It will be held in the early fall, on the eve of the NBA regular season, and will pit the NBA champions against champions from every other major league in the world. The World Championships, which will be modeled after soccer's World Cup, will be held every fourth year, two years after the Summer Olympics. The Olympics, in which NBA players are now eligible to play, will complete the rotation.
Because of the increasingly international character of NBA teams, in all likelihood NBA players will be featured extensively during the 1992 Olympics in Barcelona; perhaps there will be NBA representatives on all three medal-winning teams. That would provide the league and its sponsors with fabulous marketing opportunities, since, according to Stern, there is a reasonable chance that the Olympic basketball tournament will be the most widely viewed sports event in the history of television. It is important to remember, when people talk of an intercontinental NBA, that in its own view the NBA has bigger fish to fry than running a mere sports league. What the NBA really wants to do is market the entire sport of pro basketball, run all the big events, sell all the licenses and international sponsorships. The revenues from those kinds of deals could, before the end of the century, dwarf what the NBA makes from its core business. "By marketing the sport of basketball, we have the opportunity to be in just about any business we choose," says Welts. "We're also interested in farming out that expertise."
The NBA's first client? USA Basketball, the organization that will oversee not just the U.S. men's and women's Olympic teams but also the teams that will represent the U.S. in the Goodwill and Pan Am games. The league is also talking to FIBA, which wants to share in the NBA's marketing expertise. "Frankly, [the potential is] unlimited," says Granik. "And this is not a big stretch for us. The organization is already in place."
With the international challenges that lie ahead, Stern has no timetable for leaving his job. "I'm really having a good time,&