Invested Interest

Let’s have a big, star-studded welcome for the NBA, which is bringing its All-Star game back where it belongs, and not just because it can run TV commercials showing the Hollywood sign and girls in bikinis.

This is the last mega-market the NBA still rules, with the Lakers secure in their role as ultimate marquee team, hot ticket and celebrity favorite. Of course, as far as the actual season goes, they’re hibernating, as usual, but are expected back in spring to renew their dynastic claims.

This was once baseball country but the Dodgers went from a family-owned institution with a rich tradition to a forgotten piece of the Rupert Murdoch empire before being sold to another out-of-towner seven years later.

The NFL doesn’t even have a team here, which is considered unthinkable by other towns, not to mention other leagues, although the local population has found that life is still possible.

The NBA has had its own problems, nationally if not locally, although those have come to be exaggerated.

There’s a perception that the league ceased to be a marquee attraction when Michael Jordan left the Bulls, that it has never recovered and now exists to present ever-lower-scoring games with ever-worse TV ratings between arrests, capped by the piece de resistance, the fall of Kobe Bryant. Actually, the NBA can be seen as being well into its turnaround.

As an industry, it was under water when Jordan left the Bulls but is turning profitable again.

Regular-season ratings are up on balance -- booming on TNT and ESPN, off on ABC.

The league that invented the salary cap has gotten it right after 20 years, so that it now balances interests to everyone’s satisfaction.

Stars get $100-million deals and journeymen get sports’ highest minimums ($750,000 for a five-year man). Most teams made money last season (several courtesy of the $75 million the Portland Trail Blazers and New York Knicks paid in luxury tax). In a game traditionally ruled by big markets, three of the smallest, San Antonio, Indiana and Utah, have been in five of the last seven Finals.

Most striking, the league’s capacity to confer stardom is ongoing. NBA players retain a special appeal, with their connection to sneaker- and soft-drink-buying teens, as demonstrated anew by young LeBron James, whose arrival has been hyped to absurd levels but whose marketing impact is undeniable.

Days out of high school, James signed a $90-million Nike endorsement contract, more than doubling the largest sneaker deal ever, which a Wells Fargo analyst following the company called “mind-boggling.”

James then got a $14-million deal from Coca-Cola, which, according to the Sports Business Daily’s Terry Lefton, dwarfs Coke’s deal with the Atlanta Falcons’ Michael Vick, the NFL’s brightest and most marketable young star.

Once the NBA reaped the benefits of the NCAA’s promotion, which made stars of players like Grant Hill before the league ever put a penny into them.

Having just learned it’s still happening, with or without the NCAA’s help, Commissioner David Stern says he’s stunned.

“Here we have two of the most sophisticated marketers in Nike and Coca-Cola,” Stern says, “who have invested tens of millions of dollars in a marketplace investment that this professional basketball player is a professional icon.”

Suggesting its confidence in more young professional basketball players, Nike gave another rookie, Carmelo Anthony, a $19.5-million deal, bigger than Shaquille O’Neal’s shoe contract when he turned pro.

Happily for the league, appearances notwithstanding, this isn’t like 1979, when Magic Johnson and Larry Bird arrived in the nick of time.

Coming off lean years and obliged to negotiate a new deal in the teeth of a recession, the NBA still gets $733 million a year from its national TV contracts, second only to the NFL’s $2.2 billion, ahead of Major League Baseball’s $559 million and recent success stories such as NASCAR’s $400 million and golf’s $248 million for PGA Tour events, the Masters, U.S. Open and Ryder Cup.

“There is no question, the NBA is the second most prosperous, financially secure sports league,” says marketing consultant Dean Bonham, “not in the U.S., but in the world today.”

However, this doesn’t seem to be the NBA’s prevailing image. As if to counterbalance the good news, it has a new problem: Like a pinball machine, the league has gone into tilt.

This has had far-reaching consequences: Western domination, one-sided Finals and plummeting ratings for the marquee event that masked the progress. This is either a temporary, cyclical problem or a historic detour, depending on whom you believe and what happens from here.

In any case, things have been worse, and not so long ago that anyone should have trouble remembering them.

Little Giant, Big Trouble

Stern took over in 1984 and for his first 15 years was considered a fortunate young commissioner, indeed.

His predecessor, Larry O’Brien, had gotten the union to accept a salary cap. A golden age was underway with Johnson and Bird delivering one or both of their glamour teams to 10 successive Finals in the ‘80s, and with Jordan, who would take the league to scarcely imagined heights in the ‘90s, arriving that very season.

Stern’s standing rocketed. When baseball began looking for a commissioner in 1989, NBA owners bumped his salary to superstar levels, fearing they might lose him.

Stern’s hold over his league became ironclad. Jerry Reinsdorf, who owned the Bulls and the White Sox, was a power in baseball but didn’t even attend NBA meetings, telling confidants everybody just did what David said to do.

There has never been a hint of a resistance movement. Despite the problems of recent seasons, the closest thing Stern has had to a challenge has been Dallas owner Mark Cuban’s mouth, which Stern sought to silence with more than $1 million in fines.

Everyone else got that hint long ago.

“Every interview you do, you’re thinking, ‘What would David think about that?’ ” says former Orlando general manager Pat Williams. “That is called power.”

The honeymoon ended with Jordan’s retirement in 1999, after which all manner of problems -- a labor stoppage, declining ratings, lower scores, embarrassing arrests -- befell Stern.

Not that any of it was unusual. Baseball canceled its playoffs one season and the World Series lost 60% of its TV rating from its zenith. Two NFL players were involved in murder cases within months. NCAA basketball scoring dropped 9%, despite the introduction of the three-point shot, the 45-second clock and the 35-second clock.

If the NBA was held to a higher standard, there were reasons for it. For one, it was the success story of the ‘90s, ballyhooed and copied, as when the NHL, needing a new commissioner, turned to Stern’s legal counsel, Gary Bettman.

For another, stardom cuts both ways, so Bryant on trial is different from Rae Carruth, the Carolina receiver convicted of conspiracy to commit murder, on trial.

If everyone had problems, the NBA had a perfect storm, starting with the 1998 lockout.

The union was ready to rumble, spurred on by the big agents, principally David Falk, whose clients packed the board of directors. Recognizing the lesson of the baseball strike -- if there has to be a fight, have it on your terms -- Stern locked out the players at the start of the season so they’d have to give up an entire year’s pay before threatening the playoffs.

Days after a deal went down in January, Jordan announced his retirement from the Bulls.

In 2000, the stock-market bubble burst, sending the economy into recession and devastating the advertising business, which pays the freight for sports leagues.

The NBA’s building spree, and the boomlets that followed, wound down.

The NBA’s expansion into Canada went south, literally, with the Vancouver Grizzlies’ 2001 move to Memphis, the league’s first franchise shift in 16 years.

In 2002, the Charlotte Hornets struck out for New Orleans after a long-running battle with civic leaders. Showing how badly he felt about that one, Stern moved an expansion team right in on the Hornets’ heels.

Even with O’Neal and Bryant on a marquee team, the Finals, which got an 18.7 rating in Jordan’s farewell, turned one-sided and posted ratings of 11.3, 11.6, 12.1 and 10.2 before last spring’s 6.5, which even Stern called “a shocking low number.”

As good on his feet as the trial lawyer he once was, Stern handled it smoothly but the strain showed. At his 2001 All-Star news conference in Washington, he exclaimed, “That’s the kind of reporting we get!” at a question, and told another reporter, “Get a [satellite] dish!”

In 2002, the $1.8-billion NBC deal ran out. In the stark advertising climate, the negotiations for a new deal looked like an oncoming locomotive with Stern’s name on it.

NBC Sports boss Dick Ebersol offered a 33% cut. In what would then be deemed a controversial decision, Stern took the over-the-air package to ABC, with cable networks Turner and ESPN getting the All-Star game and conference finals.

Instead of a huge cut that would have meant a huge salary cap contraction, Stern got a 15% increase, a feat under the circumstances, but one that went largely unappreciated in the debate over going so heavily to cable. Some owners were even heard grumbling before voting to approve the deal.

“Some owners thought TV rights were going to keep going up forever and some teams made spread-sheet commitments based on that assumption,” says a Western Conference team official. “That was at the time. People are pretty pleased now.”

Labor relations are better too. Players forked over 10% of last season’s pay in escrow, since salaries were still above the agreed-upon 55% split and, amazingly, didn’t complain.

“People said it was a bad deal back in ’99 and everybody criticized the deal then,” says union President Michael Curry. “They said the players sold out and they got into a lot of players’ heads that they were signing a bad deal.

“But at that time, the players were willing to sign a deal at 55% of [basketball-related income] and we haven’t gotten under 60% yet.”

Stern says the current deal is “almost there.” Coming from such a tough negotiator so early in the process, this can be freely translated as:

“Party time!”

What could go wrong now?

East is East, West is West

Oh, that.

The 2003 off-season wasn’t the happiest Stern ever experienced. Barely had the Finals finished bombing on TV when Bryant, one of his most vigorously promoted stars, was accused of rape, setting up what was then being called the trial of the century.

The Lakers signed Karl Malone and Gary Payton, raising the specter of an even more dominant dynasty in an even more dominant West, which had won the last five Finals by a combined 20-6.

Almost all the best big players were in the West. East teams often went small on the oft-heard theory that they had to deal with only each other until the Finals.

Meanwhile, elite West teams were continually gearing up, trying to get ahead of each other, turning it into a super-conference. The difference was encapsulated in the recent Phoenix-New York deal. The Suns, who may have had the better team, melted theirs down while the Knicks kept rebuilding on the fly.

Golden ages are built on competition and drama, like the Johnson-Bird, Laker-Celtic duels of the ‘80s. No player approached Jordan’s stature in the ‘90s but his Finals were good shows, with five of the six going six games.

Since then, West teams have won by scores of 4-1, 4-2, 4-1, 4-0 and 4-2. Only last spring’s Net-Spur series was anything but 4-0 or 3-1 after four games.

“You don’t see Bird versus Magic, that kind of thing, developing or even any simulation of that,” says Indiana Chief Executive Donnie Walsh. “You look over and see Shaq and it’s like, well, hell. Nobody thinks a decent team’s got a chance and they’re probably right.... I don’t mean that Tim Duncan and those guys aren’t great players but there’s no matchup for the guy.”

Without Shaq in the equation, Walsh says, it’s more even. For better or worse, the Lakers don’t always make it through and aren’t dominating anything at present.

If the East is still in general decline, it would take only one emerging power to make the Finals competitive. That could be Walsh’s Pacers, who have the NBA’s second-best record, are tied for the best road record and are 4-4 against the top five in the West.

Stern is determined to fight it out under the current East-West format. Next season’s division realignment even sends New Orleans, one of the better East teams, to the West.

Radical proposals, such as seeding, which he’s frequently asked about now, are still nonstarters.

“It does seem awfully gimmicky,” said Stern, in one of the nicest things he has ever said about seeding.

“The highest value is getting a champion. Getting the best two teams in the Finals is about television ratings. You’d like to think of yourself as a sports league first, with TV televising your events. Not basing your events for TV, unless they’re All-Star game events or slam-dunk contests.

“We took our hit. It’s not going to get worse. Ratings are going to get better this year....

“And finally, I guess, the other good news is that it was Year 1 of a six-year [TV] deal. Come see me in Year 5.”

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Ratings and rights fee data courtesy of the Sports Business Daily.

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David Stern Timeline

Stern, formerly counsel for the NBA, takes over for outgoing commissioner Larry O’Brien in 1984. Some key events during Stern’s tenure as commissioner: