By Leigh Steinberg
8:48 PM PDT, October 27, 2012
David Stern, the NBA commissioner has wielded unquestioned power over his sport in a way rarely seen over the last 30 years.
He will retire in February of 2014, handing power over to his longtime deputy, Adam Silver. It is unlikely that any commissioner will exert the sheer domination that Stern exercised again.
So what is his legacy?
In 1984 the NBA was a very different league. The sport's premiere event, the NBA Finals, was being shown on tape delay on television at 11:30 p.m.. Teams like Chicago were lucky to draw 7,000 fans a night. The average salary in the league was well under $250,000. Franchises could be purchased for as little as $11 million.
The four-year deal for national television with CBS was worth $91 million for the league. The popular perception was that no game was worth watching until the final two minutes because every game was decided at the last minute. The NBA was not considered a sport at the same level of the NFL, Major League Baseball or college football. Stern dramatically changed that tableau.
Stern understood the concept of branding and marketing. He pushed the players to be as attractive and media friendly in their public appearances as possible. He saw the natural rivalry and star power of the Los Angeles Lakers with Magic Johnson competing against the Boston Celtics with Larry Bird. Their contests seemed to be featured on national television virtually every week.
Stern realized how shoe companies could help build the brand, especially Nike, and how that would lead to endless hours of free exposure for basketball. As technology progressed, he became adept at utilizing every platform of content supply, Twitter to mobile phones to reach fans. He pushed the creation of an NBA network. He had NBA players compete in the Olympics starting with the 1984 Dream Team. That led to outreach world-wide and the internationalization of the NBA as a world sport.
He saw the potential in China and other foreign markets. He understood the concept of star power. He was fortunate to have the Michael Jordan era followed by Shaquille O'Neal, Kobe Bryant, LeBron James and other recognizable figures that became household names. He also added seven expansion franchises, extending the reach of the league. And he created a luxury tax system to deal with market inequity in which the lowest income teams split up $180 million.
The economic explosion occasioned by the reshaping of the NBA was dramatic. Revenue increased exponentially. National television increased from a USA/ESPN/CBS combined package for the league of $28 million per year to the TNT/ESPN/ABC package of $930 million per year. This doesn't count local or regional television contracts.
The Lakers signed a deal with Time Warner Cable which starts this year and pays them $200 million a year. The Celtics signed an agreement with Comcast Sports Net New England which gives the team a 20% equity stake in the network and doubles their rights to roughly $38 million per year.
Television revenue has a direct effect on franchise value. The Lakers value expanded to an NBA-high $900 million based on their Time Warner deal. The Golden State Warriors' deal with Comcast pushed their value up to $450 million, roughly a 25% increase.
Jerry Reinsdorf bought the Bulls in 1985 for $16 million and today they are valued in the range of $600 million.
The players were beneficiaries of the new financial largesse. The average salary of an NBA player today is $5.15 million. The highest paid player in the league is Kobe Bryant at $27 million. Keep in mind that many rosters have "maxed out superstars" and players at the $300,000 minimum.
Endorsement revenue can more than double the on-court income of a player like Kobe. NBA players have the advantage over other sports that fans can see their bodies and faces clearly and their shoe-wear translates into every day wear.
When it came to labor negotiations, the mask of cordiality disappeared from Stern and a harsher, more bullying side emerged. It was evocative of the corporate theory of "Bulwarism" which evolved in the labor negotiations of the 1930s.
Management scientifically decided what was the only rational position for both sides and was unwavering in the face of all odds. As meticulously as he protected the NBA image in other areas, he was content to endure strike after lockout after missed game to achieve his goals. He made antagonistic public comments about the players, their leadership and their position as if the public really has a stake in a battle between what it perceived as millionaires versus billionaires. He was successful in imposing a salary cap on teams and rookies which protected management from themselves. He did reduce the percentage that players receive of the gross revenues from basketball from 57% to 49%. That will save owners some $3 billion in salary and benefits over the next 10 years.
Ego and arrogance aside, Stern radically changed the scope and popularity of the NBA in a way that has benefited fans, owners and players and it is doubtful that a figure that omniscient will rise soon again.
LEIGH STEINBERG is a renowned sports agent, author, advocate, speaker and humanitarian. His column appears weekly. Follow Leigh on Twitter @steinbergsports or blog.steinbergsports.com.