NBA ON Your PC, Streamed Video

[Dan Forant <dforant1@nycap.rr.com>]

NBA chief shoots for Net
Sport enters cyber arena with Web sites, e-retail, possible IPO

By Michael McCarthy, USA TODAY

NEW YORK -- David Stern has his own definition of "convergence." The
Internet, TV . . . and basketball.

Sitting in his wood-paneled office above the lights of Fifth Avenue, the
NBA commissioner is looking at the future of the league, and what he sees
is all Net. The Web's rapid rise reminds this lawyer-turned-impresario of
an old joke: "Two years ago I couldn't spell Internet executive. Now I are
one," Stern says. 

If you're on the Web, the New Age NBA wants you. Stern wants you surfing
his NBA.com and WNBA.com sites. Stern wants you watching his new NBA.com TV
network. Stern wants you shopping for NBA merchandise at his online store.
Stern might even float his interactive operation on the stock market to get
you to buy in.

His ultimate goal: to deliver live, full-motion NBA games right to your
computer or laptop. "That's what convergence is all about," Stern says. 

"The Internet and broadband will ultimately redefine the fan experience in
all of sports."

"David Stern is the most effective commissioner ever in professional
sports. Period," says Dean Bonham, chairman of the Bonham Group sports
marketing consultants in Denver. Stern's move to position the NBA as
"Internet-friendly" is "not only a smart move but a critical one."

"Look at the AOL-Time Warner deal. Anybody that doesn't think TV and the
Internet are going to be the same appliance in the next decade has their
head in the sand," Bonham says. "And David Stern does not have his head in
the sand." 

What he does have, though, is head-to-head competition to be the dominant
player in pro sports' new cyber-arena.

While Stern's plans now may be the most aggressive, the NFL was the first
pro league with an Internet site (in 1994) and is doing "very well" on the
Web, says Patrick Keane, senior analyst at Jupiter Communications. Keane is
skeptical about Stern's assertion that the NBA is already an Internet
company: "I think that's spin. Just because you build a Web site and link
your teams doesn't make you an Internet company," he says.

The NFL's Web push also comes straight from the top. NFL Commissioner Paul
Tagliabue went on record after a league owners' meeting: "The Internet will
be as important to the NFL in the first half of the 21st century as TV was
in the second half of the 20th century."

While the NBA is ahead of Major League Baseball and the NHL, sports experts
say, the NFL's ambitious Web strategy is a challenge. It includes expanding
NFL.com's Spanish-language capability and e-commerce sales. "We believe
we're the leader," says NFL spokesman Chris Widmaier. "The other sites do a
great job. But the NFL does the best job."

NBA's cyber-goals

Don't try to tell Stern that. He sees himself not as a sports executive but
as CEO of a global entertainment empire. That approach, combined with
astute marketing skills, sets him apart from many others in sports. Part
strategist, part showman, part hardball labor negotiator, Stern usually wins.

Just ask the NBA Players Union, which lost its showdown with him in the
NBA-enforced lockout.

And in the Web world at large, Stern is positioning his 55-year-old league
to lead. Next month he'll host an "NBA All-Star 2000 Technology Summit,"
featuring the likes of AOL's Ted Leonsis (who is also a part owner of the
NBA Wizards), Oracle's Larry Ellison and Oxygen Media's Geraldine
Laybourne, as well as hoop stars Shaquille O'Neal, Alonzo Mourning and
Grant Hill. An NBC team of Tim Russert, Bob Costas and Ahmad Rashad will
moderate.

If Stern is walking the walk, he's talking the talk, too. He tells you that
he looks at the Knicks, Lakers or Bulls and doesn't see just basketball
teams, he sees 29 producers of "digital content." 

His plan for www.NBA.com is to be no mere Web site, but rather a
"basketball portal," a hoops Yahoo. Stern sees high-speed Internet access,
such as cable and DSL, as directly or indirectly helping him achieve his
goal of "delivering basketball to the global masses in its digital state."

He does mean global. More than any other U.S. league, the NBA has worldwide
reach. Games have been televised in 205 nations in 47 languages. That
increases the importance of the Internet to the league. Already about 35%
of NBA.com's visitors are overseas, a figure Jupiter analyst Keane calls
"huge."

The Web is the ideal vehicle for "Stern's strategy of internationalizing
the NBA brand," says Jim Ritts, the former LPGA commissioner and now CEO of
Digital Entertainment Network in Los Angeles.

"You don't have to worry about time zones, you don't have to deal with
rights fees. It sits there like an idling engine 24/7."

The NBA received a major marketing boost this week with the return of its
former marquee attraction, Michael Jordan, as chief basketball officer and
part owner, along with AOL's Leonsis, of the Washington franchise. "It's
terrific for the Wizards, for Michael and for the NBA," Stern says. "We
look forward to working closely with him on all matters pertaining to
basketball and its international growth."

Fresh marketing ideas

Still, Jordan won't be lacing them up. And post lockout, the NBA needs
fresh marketing ideas. Attendance this season averaged 16,345 through the
first 500 games, 0.6% down from Jordan's last full season in 1997-1998. Its
combined TV ratings on Turner Sports' TNT and TBS are down 12%.

Details of Stern's plan to take the NBA to the Net:

Sites: Five-year-old NBA.com attracts 4 million visitors a week. And the
3-year-old WNBA.com site pulls in female Web surfers, says Adam Silver, COO
of NBA Entertainment, which is leading the league's Internet fast break.
The NBA wants one uncluttered cyberspace brand, so sites for all 29 teams
are under NBA.com. The WNBA site will probably fold into it by fall. "Our
strategy is to drive everything to NBA.com," says Silver, who's considering
a separate ad campaign just for the site. The NFL, by contrast, has
multiple sites and allows teams and owners to build their own sites. Both
leagues are trying out ticket sales over the Web. Major league baseball
owners voted Thursday to give all Internet rights, including radio or TV,
to their commissioner's office and share revenue.

Digital TV: Stern launched NBA.com TV in November, the first time a league
has had its own TV network. Via satellite and digital cable "NBA.com TV is
a tease of what streamed video will look like. It's a preview of
broadband," Stern says. "NBA.com has been around for 5 years. NBA.com TV
has been around for 5 minutes. Eventually they will come together."

e-Commerce: The league is working with IBM on a revamped e-retail site
called the NBA Store @ NBA.com. Moving into e-commerce was one reason Stern
opened the off-line NBA Store in New York, a free throw from league
headquarters. It is a pilot for the NBA as a direct seller and a lab for
hot-selling merchandise. Silver notes: "We're the only ones who have
morphed an online store into a bricks-and-mortar store."

IPO: If start-up companies can make millions with initial public offerings,
why not the NBA? Stern has tapped investment firm Chase Hambrecht & Quist
for "a full range of advice on everything we might do" including spinning
off NBA.com. Chase has been the NBA's banker for years.

Cross-promotions: The NBA's sponsors include companies such as McDonald's,
Coca-Cola and AT&T. Look for Stern to eventually cut sponsorship deals with
a few blue-chip dot-coms to bring in additional revenue. "This is a very
long-term strategy. We're not going to rush into something for a few
dollars," says Stern.

Stern isn't betting everything on the Web. NBA Entertainment, for example,
is looking to create a TV sitcom similar to Sports Night as well as
animated kids' shows. The league has opened a theme restaurant NBA City in
Orlando. And the NBA has been invited to participate in creation of a new
Asian basketball league, says Stern.

But the Internet is the priority now. And it has the 57-year-old
commissioner trying to practice what he's preaching. He uses e-mail. He
digitized his voluminous Rolodex with numbers for everyone from NBC's Dick
Ebersol to corporate matchmaker Herb Allen. The call sheet that defines his
workday now beeps at him from his new computer 

Stern is no hacker yet. Sitting at his monitor, he misfires a few times
before navigating his way to the Web. But he's learning quickly. "I know
enough to be dangerous," he laughs. "If you're CEO, you can cheat."

In some ways, it's back to the future for Stern. In the '80s, this
Manhattan deli owner's son used the power of TV to transform the NBA from
an outlaw league into one of the world's great entertainment brands. Now
he's trying to use the Internet to reinvent the league, and himself, for
the digital age.