Was David Stern Alone Responsible for the NBA’s Success?
Was David Stern good or lucky as National Basketball Association? Stern was a big asset to the growth of the game globally but he may have also benefited from the confluence of very fortunate circumstances.
David Stern replaced Larry O’Brien as commissioner on February 1, 1984. Stern was an attorney who had been the NBA’s Executive Vice President. He would direct a tremendous expansion in the marketing of the NBA; develop a cohesive and profitable broadcasting strategy. He would move try to ensure the stability of NBA franchises by increasing licensing revenues, and developing corporate sponsorships.
Stern had some help from his predecessor Larry O’Brien and National Basketball Players Association Executive Director Larry Fleisher who left him the new players-owners agreement.
In 1983, the NBA was having severe financial problems and there was serious thought given to cutting seven franchises in a number of scenarios including combining a number of teams and buying out others. The salary cap maintained 23 franchises although some teams would move including Kansas City and San Diego.
The NBA now had a salary cap and was drug testing players when Michael Jordan entered the league in 1984. Jordan was the third player taken in the draft behind Hakeem Olajuwon who went to Houston and Sam Bowie, who was selected by Portland. Jordan ended up in the nation’s number three market and perhaps its most rabid sports town. Jordan cut marketing deals with NIKE and Gatorade and had a major likability. Nike’s Phil Knight had as much to do with Stern in making Jordan a household name and lifting the NBA.
Stern was also about ready to get a major gift from Congress as he assumed the office. The Cable Communications Policy Act of 1984. The 1984 Cable Act established policies in the areas of ownership, channel usage, franchise provisions and renewals, subscriber rates and privacy, obscenity and lockboxes, unauthorized reception of services, equal employment opportunity, and pole attachments.
The law allowed cable operators to bundle what were financially faltering networks into a basic expanded tier which may have saved the cable industry as consumers were paying one flat price for numerous stations on basic expanded. The bundling of channels would lead to the formation of regional cable TV sports networks around the United States and strengthen ESPN, CNN (and other Turner properties) and other cable networks. Regional sports cable channels would soon to able to pay more money for events than local over-the-air channels. The sports channels would have two sources of income, subscriber fees and advertising support.
“The real revolution for the NBA came during the 80’s and early ’90 when cable TV penetrated the large cities allowing regional cable networks to grow,” said Jim Williams, a media consultant who was part of the development teams for four regional sports networks. “Cities like Dallas, Houston Los Angeles, Cleveland and Phoenix to name a few had become wired allowing the regional cable networks to become a force. Home Sports Entertainment in Houston, Dallas and San Antonio, Sunshine Network and Sports Channel Florida, Sports Channel Ohio, Home Team Sports in Washington, D.C., Cox Cable in Phoenix all the sudden had the kind of subscriber base that it took to offer the NBA teams big money. The sky became the limit after once the regionals had that penetration into the big city markets. So once the cable pipeline was opened to the big cities the money flowed to the NBA franchises and most all of the league had the vast majority of telecasts on cable.”
Stern was able to get more and more money on the national level for NBA games on cable. The NBA got $12.5 million annually from Turner in its next contract in 1986. It was a two-year, $25 million contract. In 1988, the fees doubled in a two-year, $50 million agreement with Turner. In 1990, Stern got $275 million over a four year period from Turner. The 1984 Cable TV Act was another one of the breaks Stern received.
In 1985, the NBA was struggling in its efforts to figure out cable TV and protect not only its national rights partners but local TV contracts as well. The league owners decided to limit teams that had deals with superstations to just 25 games per season.
Everything came together for the NBA. There was a salary cap, drug testing, three stars in the east, Midwest and west coast and a new deal with CBS. More money was flowing into the game but there was one remnant of the early days. The Utah Jazz traded Fred Roberts to the Boston Celtics for a pair of exhibition games after the 1984-85 season. Roberts was involved in two odd trades in his career. The New Jersey Nets sent him to San Antonio in 1983 for Coach Stan Albeck and the Jazz-Celtics deal which was probably designed to put money into the jazz coffers.
The Celtics were on top of the league with Bird, Kevin McHale, Dennis Johnson and Robert Parrish and with the Lakers, a glamour team. The two pre-season games, in 1985 and 1987 would be played in Utah.
“I’ve been traded for coaches and exhibition games,” said Roberts. “At the time, it was a good career move for me to be able to move out of Utah. I tried to tell myself they are going to make a lot of money when we go out there and play the exhibition games. One was played in Provo (Utah), somehow they worked out the money deal there. In Boston, they (his teammates) harassed me a bunch, they harassed me because they had to make the flight out to Utah, they didn’t want to play the game.”
Roberts wasn’t around for the second Celtics-Jazz pre-season game.
Bird’s Celtics took on Magic’s Lakers in the finals in three times, in 1983, 1984 and 1987. The Lakers finally beat the Celtics in the finals in 1984 after to Boston in 1962, 1963, 1965, 1966, 1968 and 1969 in the Bill Russell years and again in 1984. The Lakers finally beat Boston in 1985 and again in 1987.
A good rivalry needs hatred and that hatred turned into big dollars for Stern and the NBA. People wanted to know about the Celtics and Lakers games and how they hooked people into watching the league that was considered too black with too many guys doing drugs for white America in the 1980s.
The Lakers success had a big impact on the entire sports industry. In 1988 Lakers and Los Angeles Kings owner Jerry Buss sold the naming rights of the Forum in Inglewood, California to Great Western Savings and Loan. The facility would be renamed Great Western Forum and would usher in a new revenue source for owners. What Buss did was not anything new. In 1953, the new owners, Anheuser-Busch of the National League’s St. Louis Cardinals tried to rename Sportsman’s Park Budweiser Stadium after the company’s bestselling and best known beer label. But Major League Baseball Commissioner Ford Frick nixed the idea and the park was renamed Busch Stadium, not the family who owned the brewery not one of the brewery’s brands. The Boston Patriots owner Billy Sullivan sold the name of his new Foxboro stadium to the F and M Schafer Brewing Company in 1971. Other stadiums including Wrigley Field in Chicago and Briggs Stadium in Detroit carried corporate names but the Wrigley family owned the Chicago Cubs and the Briggs family had controlling interest in the Detroit Tigers.
Buss’ sale of the rights started a chain reaction of the selling of naming rights in all sports in the United States and Canada. Ultimately teams would find other sources of advertising revenues. The concept of having a presenting sponsor of a team would begin in 2003 when Rock Financial signed a deal with the Detroit Pistons. By 2007, the Cleveland Cavaliers, New Jersey Nets, San Antonio Spurs and Toronto Raptors had deals with presenting sponsors. The WNBA’s Connecticut Sun also had a presenting sponsor.
In 1986, Congress reformed the tax code and President Ronald Reagan signed the revisions. One of the changes was the way stadiums and arenas were funded. A municipality could build a new venue with public money and get back as little as eight cents on the dollar to pay down the debt. The change spurred a tremendous change in the industry. Owners were able to get new buildings with all sorts of revenue generating opportunities from luxury boxes to club seats to higher prices for parking and concessions along with in-venue restaurants. Cities decided to compete for teams.
Stern got two presents from Congress and President Ronald Reagan.
During Stern’s tenure, virtually every owner received a new building. Commissioner Maurice Podoloff’s BAA and then NBL had teams playing in high school gyms. Walter Kennedy’s NBA played on neutral courts that included a high school in the San Francisco Bay Area. O’Brien’s NBA featured old buildings with glorious histories that were becoming decrepit. Stern, who once said in the 1990s that every one of his arenas should be like Disneyland, saw his teams play in state-of-the-art facilities that had restaurants and work centers.
The NBA’s 1983 collective bargaining agreement with its players attempted to bolster the league’s image and get help for players with drug problems. Boston ended up with the second pick in the 1986 draft and took Maryland forward Len Bias. Two days later Bias was dead from a cocaine overdose. Bias might have been the next great Celtics player and might have kept the Celtics mystique alive into the 1990s. Bias was not an NBA player so the new rules could not have affected him but there were other abusers whose careers were grounded by drugs.
In 1986 Micheal Ray Richardson failed his third drug test and was kicked out of the NBA. Richardson continued his career in Europe. In 1983, Utah forward John Drew missed 38 games because of drug treatment. In 1986, Drew is out of the league after attempting to buy cocaine from an undercover cop. Chris Washburn, who was drafted by Golden State at #3 in the 1986 draft right behind bias, was out of the NBA by 1989 because of three failed drug tests. William Bedford, who was drafted at #6 by Phoenix, entered rehabilitation for drug usage in 1988.
Roy Tarpley who went to Dallas after Bedford’s selection was permanently banned from the NBA in 1991 after refusing to take a drug test. He was reinstated in 1994 but was gone by 1995 after being caught with alcohol which violated his after-care program agreement. In 1989, the Houston Rockets had three players with drug abuse history, John Lucas, Michael Wiggins and Lewis Lloyd. Wiggins and Lloyd were tossed out of the league for two years when they failed drug tests on January 13, 1987. In 1991, Phoenix’s Richard Dumas tested positive for cocaine and is suspended. In 1995, Dumas is banned from the NBA because he is caught with alcohol which violated his aftercare agreement.
The NBA had become so widely popular by the mid-1980s that drug abuse stories no longer stuck to the league. The days of innocence were gone replaced by Jack Nicholson rooting on the Lakers from courtside seats. The NBA had become “The Ed Sullivan Show,” but instead of Ed introducing celebrities who showed up at his Sunday night CBS TV show in the 1940, 1950s, 1960s and 1970s, the NBC or the Madison Square Garden Network in New York would show what celebrities showed up at games. Those celebrities would show up in NBA promotions in both TV and print commercials. The NBA was FAN-tastic.
Bird-Magic-Jordan were considered the trilogy and the three were the NBA’s most marketable players. But they were not alone. The NBA also had Charles Barkley and Patrick Ewing along the Detroit’s “Bad Boys.” General Electric took notice of the NBA and its sudden popularity and signed a four-year, $601 million contract on November 9, 1989 to broadcast games on its National Broadcasting Company division starting with the 1990-91 season. It was the biggest TV deal to date and rather remarkable considering that a decade earlier CBS was showing NBA playoff games on tape delay.
Stern’s main job was to maximize NBA owners’ profits. On his watch, they did just that. Stern’s global push was leading the league to play annual exhibition games in Europe and China. He did what the owners wanted. But without Congress, some players and some marketers like NIKE’s Phil Knight, Stern would never have succeeded beyond normal expectations.
The NBA’s growth was the result of fortuitous circumstances not just David Stern’s stewardiship.
Evan Weiner, the winner of the United States Sports Academy’s 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on “The Politics of Sports Business.” He can be reached at firstname.lastname@example.org. His book, “The Business and Politics of Sports, Second Edition” is available at www.bickley.com and Amazon.com.