THE SPORTS BUSINESS DAILY interviewed NBA Properties
President Rick Welts during the week leading up to NBA All-Star
Weekend. In Part II, Welts addresses the focus of NBAP in '95,
their international efforts, and their strategies for dealing
with new interactive technology.
THE DAILY: What is the state of NBA Properties at the All-
Star break?
WELTS: You're talking to us at an interesting time, because
we are undergoing a major transition. It is the result of having
a maturing domestic business that has grown at an incredible rate
over the last twelve years, and the entrance into the phase of
our business where we can be truly described as a global
property. We've had aspirations to be that for a long time, but
the infrastructure, the consumer interest, the sponsorship and
television interest are at a point right now where you could
truly describe us that way. So, it's a huge change in our
organization.
THE DAILY: Is NBA Properties the instrument the league uses
to spearhead its entry into new markets?
WELTS: At the core, if you put it in a circle, you would
have the game, the players and the teams. What NBA Properties
does is deal with everything that surrounds that circle that is
an opportunity. We think of ourselves as content. So whether
that's television programming, consumer products, publishing,
trading cards, non-game programming --whatever it is -- those are
all the businesses that we're engaged in. And, NBA Properties
has the mission to try to expand that from a North American
business to an international business.
THE DAILY: What is television's role in opening new
international markets?
WELTS: Television leads. We are now in 148 countries. We
are the most widely distributed sports television property in the
world on a year-in and year-out basis, putting aside the Olympics
and the World Cup. But, in terms of revenue generation, the rest
of the world is not in the rights fee payment game the way U.S.
broadcasters are. It sets the stage and sets the atmosphere for
your product to be successful, but it doesn't generate nearly the
kind of dollars that we're used to from our American model.
Because of that, we've gone a couple of additional directions in
the media area. One, we're now producing programming dedicated
to just one market [e.g. Japan, Germany, U.K. -- with Mexico
under discussion] ... Then, what I think is most unique, we've
created for an advertiser a syndication or un-wired network so
that we retain, wherever possible, inventory in our own game
broadcasts. It makes it possible for us to go to Coca-Cola or
Nike for example, and say, we, through New York, have an
opportunity to give you a presence in every single broadcast of
an NBA game or of our half-hour highlight show, "NBA Action"
which airs in 130 countries. We can actually do the sale on the
commercial insertions before the tapes are ever delivered to the
broadcasters. That is something nobody is doing, and it has been
part of our strategy to create media opportunities for a few
companies that are truly going to be global in nature with us.
That already is Coke, Nike and Reebok, but I think that list is
going to include IBM, also AT&T and McDonald's -- companies that
see basketball and the audience we're reaching working for them
not just in North America, but also the world.
THE DAILY: Are there international markets that are
particularly hot for the NBA?
WELTS: Believe it or not, I would say that the hottest
market for NBA basketball outside North America is Australia. ...
It's really an amazing market for us. From there, I would say
that Western Europe, by far, represents our biggest opportunity.
Germany, France, Spain, Italy and the U.K. -- the five markets
that we're focusing the majority of our attention on -- have the
most immediate economic opportunity for the NBA. We're also
focusing a lot of time and attention on Asia. Europe is today's
opportunity; Asia is our 20-year opportunity.
THE DAILY: What are the league's plans to move into multi-
media and other interactive technologies?
WELTS: Because this is changing so fast we have created a
task force within our own company that is dealing with every new
opportunity -- many that come knocking on our door, but also
going out proactively and trying to identify the path we want to
follow. Historically, we tend to sit back a little longer than
others to try to sort out the options and take a solid first step
in any new area. We didn't have a CD-ROM product prior to this
year. Microsoft's CD-ROM NBA product on the history of the NBA
did tremendously well at the holidays, and I think it was the
result of a lot of time and effort deciding what the first entry
into the CD-ROM market should be for us. We're spending a huge
amount of time deciding what exactly our presence should be on
the Internet rather than just jumping into it. We're going to be
there, and we're going to be there very soon, but we didn't jump
in the first chance we got. You can see that in our direct
broadcast satellite service with DirecTV that was launched this
year. It was something we could have done a year ago. We really
believe that the beauty of being content, as I described us
before, is whoever figures out how to get that information
superhighway into your home needs content and products that
people are interested in. And we are lucky enough to be in one
of those businesses that can provide a lot of valuable content.
So whether it's going to come in through your phone line, through
your cable television, through a dish on your house, the NBA is
going to be there. We are devoting a lot of people's time to
focusing on the path we should be taking in a lot of these
technologies.
THE DAILY: With all the focus internationally, are there
concerns about maintaining the domestic audience?
WELTS: There's no question that in the center of our world
are the North American teams, the players, and our fans. And
nothing we do can ignore that core. The intense focus on the
health of that core is what allows us to do all these other
things. As soon as we take our eye off of that, none of the rest
of this is going to matter.
