• Will sports betting be legalized? From my point of view, that is the big question created by the Tim Donaghy scandal, and with this groundbreaking interview, Stern moved closer than any major commissioner in modern times to an acceptance of legalized betting on his games.
Stern made no commitment to legalized gambling on NBA games in our wide-ranging conversation last week at league headquarters in New York. He did, however, open a dialogue that could ultimately lead to a new relationship between the NBA and legalized sports betting. It's important to grasp the context as detailed below, but for the first time he referred to nationally legalized gambling on the NBA as a "possibility" that "may be a huge opportunity."
By federal law, betting on professional basketball and other American sporting events is legal mainly in Nevada (limited sports betting has also operated in Oregon, Delaware and Montana). Even in Nevada, Stern has objected to legalized wagering on NBA games. The Maloof family, owners of the Sacramento Kings, agreed for years to prohibit legal bets on NBA games at their Las Vegas casino, the Palms.
But the NBA has already begun to soften its stance. Its 2007 All-Star weekend was held in Las Vegas, advancing speculation that a franchise may someday move to a gambling capital that previously had been viewed as taboo by pro sports leagues. And last year, the NBA allowed the Palms to post odds on all NBA games except those involving the Kings.
My take, as written several times over the years, is that legalized betting on professional sports in the U.S. is inevitable for two reasons: (1) If sports wagering becomes a legal and taxable form of revenue, then governments will actively police sports betting in order to protect that revenue base, as well as to safe-guard the leagues that create the windfall of new taxes; and (2) Betting on games will create more fan interest and, ultimately, bring in more money to the NBA and other leagues.
I started the conversation with Stern by asking whether his league and others need to develop a comprehensive new approach to their relationship with sports betting. That approach has changed very little in the nine decades since the infamous "Black Sox" gamblers conspired to fix the 1919 World Series.
Stern agreed, in general, with that point of view. He responded by noting that other leagues around the world were addressing betting scandals similar to the NBA's.
"We used [the Donaghy revelations] as an opportunity to get better, to coordinate with law enforcement and go through a variety of processes that I don't necessarily want to detail publicly, but you are on ready alert," he said. "And we're mindful of what can happen, because we're more-than-interested bystanders in the European football scandal. Two-hundred [soccer] games are being looked at by law enforcement across the continent. It's fascinating to see what's happening. And we're mindful of the cricket [2007 World Cup match-fixing] issues, of the football referees in Germany -- there's a lot going on."
Then he made a new point. "The betting issues are actually going to become more intense as states in the U.S. and governments in the world decide that the answers to all of their monetary shortfalls are the tax that is gambling."
The obvious question then is, Now that governments have legalized gambling, should sports leagues follow suit and enable betting on their games? While Stern didn't provide a definitive answer, he furthered the debate simply by dealing with the subject of sports betting in an open way.
The most stunning revelation of the Donaghy scandal has been the public's ambivalence. The fans don't appear to care that a referee was betting on (and very likely fixing) NBA games. A gambling scandal involving a referee was supposed to be the doomsday scenario for any sports league, but NBA ratings have gone up in the two full seasons since Tim Donaghy became a household name.
The common thread that ties Donaghy to other betting scandals around the world has been the role played by syndicates that bet illegally. These underground gambling rings -- like the mob-associated group that co-opted Donaghy -- would have a harder time operating in the U.S. if betting on sports becomes legal. As it stands now, sports betting is an illegal, multibillion-dollar enterprise that goes largely undetected by law enforcement outside Nevada. If we all accept that gambling on sports is a fact of life that can't be ignored or wished away, then the question becomes whether it is better to legalize it and actively police it, or leave it underground where it remains murkier and harder to detect.
Of course, I'm abridging this argument, because gambling syndicates would remain in operation offshore and could still try to fix outcomes against the spread. But that doesn't change the fact that billions of dollars wagered within the U.S. go unregulated and untaxed. It is a mob-driven industry, and ultimately the mob was able to co-opt Donaghy.
I asked Stern if it is in the best interests of his league to seek legalization of sports betting. He sighed with his head down, as if to emphasize the gravity of what he was going to say.
"It has been a matter of league policy to answer that question, 'No,' " he said. "But I think that that league policy was formulated at a time when gambling was far less widespread -- even legally."
He went on to provide a brief lesson in history involving J. Walter Kennedy, the NBA commissioner from 1963-75. "Walter Kennedy testified in Congress many years ago, probably over 40, that gambling -- any gambling, not just sports -- should not be allowed in Atlantic City, that gambling shouldn't be expanded," said Stern, who was a lawyer for the NBA at that time. "I remember it because I wrote a statement. It was the U.S. association of attorneys general, the U.S. attorneys association, the association of chiefs of police, the clergy of all denominations -- all lined up to say that expanding [was wrong] ... and I don't think lotteries were legal back then.
"So that was the sin. And that's the way sports grew up in their opposition."
What has changed, Stern acknowledged, is that the NBA can no longer oppose gambling on moral grounds.
"Considering the fact that so many state governments -- probably between 40 and 50 -- don't consider it immoral, I don't think that anyone [else] should," Stern went on. "It may be a little immoral, because it really is a tax on the poor, the lotteries. But having said that, it's now a matter of national policy: Gambling is good.
"So we have morphed considerably in our corporate view where we say, Look, Las Vegas is not evil. Las Vegas is a vacation and destination resort, and they have sports gambling and, in fact, there's a federal statute that gives them a monopoly of types [on sports betting]. And we actually supported that statute back in '92."
Stern has long maintained that he doesn't want the NBA to turn into a point-spread league, and he talked about how NBA games create little of the sports-betting handle in Vegas, and that the majority of NBA fans have scant interest in the spread. I responded by noting that the NBA has created a variety of constituencies, including fans who wear NBA clothing, who play NBA video games and who view Kobe Bryant and LeBron James as Hollywood-level stars, which is not to forget the fans from any number of countries who follow the NBA patriotically via Dirk Nowitzki, Tony Parker or Yao Ming.
Why not make room under the big tent for the minority of fans who like to bet on NBA games?
"OK, but then you're arguing there may be good and sufficient business reasons to do that," Stern said. "And I'm going to leave the slate clean for my successor."
He smiled and added, "But it's fair enough that we have moved to a point where that leap is a possibility, although that's not our current position."
There you have it. That is a breakthrough. You don't hear baseball commissioner Bud Selig -- and you surely don't hear NFL commissioner RogerGoodell -- saying that legalized betting on their games is a "possibility." Sports betting is their third rail, and they've long maintained the anachronistic appearance of having nothing to do with it. (Even though illegal sports betting has helped turn the NFL into the No. 1 sport in America.)
As Stern acknowledged, gambling has gone mainstream since the scandal of 1919. The gambling industry will continue to grow as more and more casinos are built throughout the nation, such as the casino now being planned by Cavaliers owner Dan Gilbert for downtown Cleveland nearby Quicken Loans Arena.
Without committing himself in any way, Stern acknowledged that sports betting could create a new stream of revenue for the NBA -- not unlike the interest that March Madness betting pools have created for the NCAA tournament.
"You're right about the threat that we perceive, and we stay on it," said Stern of the menace of illegal gambling rings. "I think the threat is the same legal and illegal -- the threat is there.
"Gambling, however it may have moved closer to the line [of becoming acceptable], is still viewed on the threat side," he said. "Although we understand fully why, buried within that threat there may be a huge opportunity as well."
• More rules changes? The style of the NBA is far more attractive than it was 10 years ago, when boring isolation plays dominated the league. "I used to say that it used to be one guy dribbling the ball into the corner and the other four would go to the parking lot," Stern said. "The traditional answer had been, 'Well, what you should do then is get the coaches to coach differently.' And I said, 'That's never going to happen. We're going to have to change the rules and enforcement so that the game is played differently.' "
The 2001-02 mandate to allow a limited form of zone defense raised complaints from team executives that Stern was shoving the rules changes down their throat. "Well, that's democracy," he said. "We appointed a committee. As I recall, it had some people I was close to, like Jerry Colangelo, Stu Jackson, Bob Lanier, Jack Ramsay, Dick Motta. These were real basketball people, and they loved the game. The advice was to open it up."
The rules changes have created a more entertaining game. By doing away with strict man-to-man defenses, GMs began to replace one-on-one defenders with shooters and scorers whose defensive weaknesses could be shored up by zone principles. An ensuing rule change to eliminate hand-checking on the perimeter has helped raise scoring to an average of 99.2 points per team through the first month of this season, a 4.4-point increase since 2000-01, when zone defenses were prohibited.
"We've seen coaches play 'small ball,' put five guys on the court who can rebound, pass, shoot -- they're interesting attributes for basketball players to have, and it works," Stern said. "People love ball movement; it shows what our athletes can do, including driving and the like.
"The beauty of this is that the debate is not over."
With that he raised the possibility of doing away with limits on zone defense altogether, which would enable centers to stand in the paint all night long and guard the rim. Stern acknowledged he is warming to the idea. "I think there's going to be a movement afoot -- the league is split 50-50 -- where we should just let them play any defense," Stern said. "It's funny, I started out on the side -- and I'm still there, by a foot or so -- that if you put three 7-foot-6 guys in the paint with their hands up and they don't have to move, that that might not be conducive to the game. But there's a strong body of work by many of our coaches and basketball gurus who say you can coach your way around that and it will take care of itself.
"But there's never a consensus on that, and I don't have an agenda there. It's just fun to discuss."
As long as the elimination of zone restrictions -- with no defensive three-second violation -- wouldn't choke off driving lanes to the basket, the change would help the NBA's pursuit of a wider global audience. Anything that simplifies the game and makes it more universally understood is a good thing. "It's moving in that direction," said Stern, noting that FIBA has decided next year to narrow its trapezoidal lane to mimic the NBA's rectangle and extend its three-point line out closer to the NBA distance of 23 feet, 9 inches.
Stern hinted that the next major rule change in the NBA may allow any player to touch the ball after it has hit the rim, even if the ball is above the cylinder. "My favorite, the offensive interference," he said. "As far as I'm concerned, FIBA has it right: It's in play and the only thing the referee has to judge is, Did it hit the rim? That's it. To me, that's a sensible rule, and it would make foul shooting more fun too." Because then you would see players from both teams attacking the rim, either to tip in the ball for two points or to bat it away for none, which would add a new dimension to free throws in the last seconds of a tight game.
The Donaghy scandal has inspired the NBA to further analyze the decisions made by referees. "It is the notion that officiating can be a little bit more of a science than an art," Stern said. "Each of the leagues is busy doing its own statistical charting -- whether they tell everyone they are or they're not -- to help them develop their officials and their game. And if you're trying to keep faith with your fans and protecting the integrity of the game, you have to open yourself to more transparency, particularly to the issue of video replay, where it doesn't shut your game down but your fans know you're trying to get it right."
In the years ahead Stern expects his coaches to follow the NFL's example and push for the right to challenge one play per game or per half. "The problem with that is fascinating, because if you're a coach and you know how to use it, you can stop the play and that takes away something," he said. "The other side gets the ball, and where does the challenge come? So the competition committee has been very, very judicious in moving forward slowly."
• A lockout in 2011-12? I asked Stern how the NBA was able to recover from the 1998-99 lockout, as well as the 2004 Detroit brawl. His answer provides perspective on the prospect of another potential lockout, in 2011-12.
"There's a fundamental dynamic, which is that no amount of management or mismanagement can screw up a great game," he said. "We've got a great game and it's always been a great game." He recalled talk over the years about how "we'll never survive the retirement of [Wilt] Chamberlain and [Bill] Russell, and we'll never survive Dr. J and Elgin Baylor and Jerry West and you name it ..." And he went on to name 17 more stars.
The lesson being that the NBA can, and will, recover from another labor stoppage. Stern won't want to lock out the players, but many owners will expect him to pursue that course if he finds no other option to create a landscape for his teams (apart from those in the biggest markets) to succeed financially.
"There are a lot of hawks out there," an NBA team president said of the new owners who want major concessions from the players union.
This team president believes the new owners are less willing to endure operating losses because they -- unlike the previous generation -- cannot count on the value of their franchises to rise exponentially.
"Coming out of it, we worked very hard with our players to say, 'We're sorry, but we did it, it was necessary and we still love this game.' That was our slogan, and we did it," Stern said of the 1998-99 lockout. "Our fans were surprisingly forgiving, and things got back to normal fairly quickly. Although in fairness, you've got to say it wasn't immediate. It takes awhile. There's always an overhang, because when you're in so many businesses and you become unreliable as a source of supply, [you have] an important impact."
Stern noted that the NFL, MLB and NHL are also facing intensive labor negotiations. "Frankly, that's why the potential expiration of all four leagues at the same time should send shudders up the spine of lots of people involved with our industries," he said. "Everyone has a different set of relationships, and some require opt-outs and whatever. But that would be the apocalyptic scenario."
For one glaring example, how would TV networks handle a vacuum of football, baseball and basketball games? "We're all worried about that," Stern said, "and we're all working -- in our own ways, unrelated to the others -- to see whether we can make a deal this time."
• Can the NBA be No. 1? I asked Stern if the NBA may be able to leverage its growth internationally to become the top sports league in the U.S. "No," he said. "I want to say that the NFL will always be the No. 1 sports league in America. As a domestic league, we have some growth left, but most of our growth against the big numbers is going to be outside the United States."
Stern's league has moved ahead of baseball in terms of national TV revenues, though MLB continues to outgross the NBA overall. But Stern insisted he isn't obsessed with outgaining the NFL or MLB at home. "Our competition is soccer -- that's the competition," he said. "And by the way, it isn't that we have to beat soccer. Our view -- and I say it oversimplified -- is that if eight young boys and girls out of 10 are kicking the ball outside the United States, if one of them flips to bouncing so that now it's only seven [out of 10], I think we've gone up by 50 percent. So the opportunity for growth against that audience is incredible."
After decades of international investment with little reward, the NBA is starting to turn the corner. "We're making money in China, we're making money in Europe," he said. "By comparison to how we do [overall], it becomes 5 percent or 7 percent; it used to be no percent. And in the not-too-distant future, it will be 15 percent, and then all of a sudden it will be 25 percent."
Stern continues to ponder expansion by the NBA to Europe. As I'll detail in next week's Sports Illustrated, my own hunch is that the NBA may seek a partnership with the Euroleague over the next decade -- an idea Stern would neither confirm nor deny.
"The more interesting thing," he said, offering another prospect, "and we have to focus on it, is maybe we do a D-league affiliation with Latin America. We take all the big soccer clubs who have buildings and membership lists and want to be in basketball, so the D-League has relevance in a different way. And then think [about potential expansion for the] WNBA. There are different countries -- there's no one size fits all."
• How long will he remain in charge? "Talk to me tomorrow and the day after and the day after," he said.
In that case, I answered, you would have quit two years ago amid the Donaghy scandal.
"No, no, I wouldn't," he said. "And actually I never would quit when I was needed.
"I just read that Bud is going out," Stern added of Selig's retirement as baseball commissioner. "He's 75 now; he'll be going out at 78. I'm a kid. I'm 67."
With that, Stern listed the variety of topics that captivated his morning commute to the office. "I was on the phone the entire way in," he said. "The Nets are moving closer to the deal to go to Brooklyn; that's very exciting for the league. The Knicks are moving closer to spinning off the [Madison Square] Garden, and that's going to be a publicly traded sports asset. As a business matter, that's great. Our video replays, we're working out the bugs and that keeps you busy. We're in the midst of collective bargaining with the players, about to schedule the next meeting. We're in the midst of reforming revenue sharing, and that requires a restructuring of our approach. We just finished this year's rookie orientation program, but we're right in the middle of the teams' business awareness meetings and coming up with approaches for this year and already planning for next year. It never ends, but it's always something new and relatively different."
He did not come across as a commissioner looking forward to retirement.
"In some ways we're a mature business with an international and digital start-up," Stern said. "So it's a wonderful combination, because that start-up is infusing new life in a very good business to begin with."
On to the rest of the Countdown ...
• I've been a Steve Nash fan since his days in Dallas with Dirk Nowitzki. His departure from Dallas, a team that I've never liked, only made me like him more. And after winning back-to-back MVPs with Phoenix, he went out and had the best year of his career ... only to watch Dirk steal the MVP because of a number of wins. That MVP theft absolutely peeved me off, and ever since then, Steve Nash has been one of the most underappreciated and underrated players in the NBA. This year is going to bring Nash's name back to the top of the MVP list where it belongs. My only question is: Will anyone come within two assists of his leading average?-- Sean Flood, Wauwatosa, Wis.
Deron Williams and Chris Paul (averaging 10.1 and 10.2 assists, respectively), as well as RajonRondo (9.3), are within your margin of Nash's league-leading 11.0 assists. Maybe Nash will finish as the only player to average double-figures in that category.
Nash has been the best point guard in the league so far based on his stats, as well as with his positive impact on a team that wasn't expected to be 15-7. As far as the MVP race, you might want to look at LeBron James, who ranks fourth in scoring (28.0 points) and sixth in assists (8.2) to go with 6.9 rebounds and 1.1 steals.
• How did the Clippers manage to miss out on Greg Oden? Really, though, the guy is still so young that in five years he could still be the most dominant player in the game. I just hope he's not out of the league in two.-- Matt, New Jersey
He could still become a dominant player. But we should be realistic. Oden will have been injured for two of his first three years of the league. Terrific for him if he overcomes this start to become an All-Star, but first thing first: He needs to be healthy for an extended period of time before bearing the burden of a franchise player.
• Did Rod Thorn let Lawrence Frank go now so he wouldn't be saddled with a record losing streak? And am I wrong in my opinion that Frank did really well over the years? He adapted to the players he had, and even though he didn't do great in the playoffs, his teams weren't championship material.-- Kurt, Brooklyn, N.Y.
Frank is a very good coach. You're right that he adapted the team to VinceCarter and then to Devin Harris, creating an offense that enabled Harris to fulfill his strengths by creating off the dribble. But it was clear the franchise needed to try something new after an 0-17 start, regardless of Frank's ability. That was the main consideration.
The Nets' key players are back on the court and they appear to be playing harder for Kiki Vandeweghe, who has won two of his first three. His job is to develop the young players, especially Yi Jianlian, Courtney Lee and rookie Terrence Williams -- along with Brook Lopez and Harris -- to prepare them for a run at the playoffs next season, when the Nets will seek a major free agent as well as their high draft pick.
• Since the Knicks are so bad, and are scraping for the eighth playoff seed in the East, why wouldn't they try to see what Jordan Hill can do after spending a first-round draft pick on him?-- Jordan J., New York
He is too raw to play, and playing him too much would hurt his confidence more than help him. If a team like the Knicks can't afford to play a rookie like Hill, that means he simply isn't ready to handle big minutes.
• On whether Dallas feels like home after 12 years with the Mavericks:
"That's a tough question. I really love both places -- I love to go home (to Wurzburg, Germany) in the summer. My family's there and my sister moved back there with her two kids, so everytime I go back I see them. I love going back to Dallas -- to my house, to my friends, to basketball. So I really don't know yet where I'm going to end up when it's all said and done. I think I have a couple of great years left and we'll see what happens when I call it quits."
• On his enduring gratitude to Steve Nash and Michael Finley for their friendship when Nowitzki arrived as a rookie in Dallas:
"I was lucky to have some good guys -- Steve and Mike -- on and off the floor. They took care of me and they showed me the ropes, and they always took me out and really made me feel warm and welcome and comfortable. Without them, it might have been a big struggle. To this day, I have great friendship with them. I went to dinner the other day with Mike when we were playing San Antonio, and, obviously, [he sees] Steve all the time. So they're my guys and they really took me under their wings early."
• On Don Nelson's role in his development:
"Who knows, maybe in a different system they would have bulked me up and put me under the hoop. But Nellie gave me all the freedom in the world. Even in my rookie year he was like, 'Whenever you're open I want you to shoot the ball.' So I owe Nellie a lot, too, the way he let me do my things.
"Nellie was the perfect coach for me. It's all about mismatches, and I'll never forget my first year. My defense in the paint was ridiculous. I remember my second game in the league; I was guarding Muggsy Bogues. Nellie was like, 'Just space him!' So Muggsy would bring the ball up to the three-point line and I'm in the paint trying to zone up. I was lucky to be around Nellie, that's for sure."
That's why Nowitzki is surprised to hear of the problems Nelson has been having with the Warriors players at Golden State. "I always considered him a players' coach," Nowitzki said. "He's tough on the rookies, but I think about how he treated us and the freedom in practice. He was like, 'Hey, when you guys win, have a spa day,' so we would never practice. It's tough to see."
• An Eastern team executive on Tim Donaghy: "Tiger Woods has helped the NBA avert a major problem with Donaghy. Think about it: The Holy Grail is 60 Minutes -- prime time, Sunday evening, millions of people watching. But nobody has really focused on what Donaghy has had to say because it's all Tiger, Tiger, Tiger, Tiger, Tiger. I was listening to some of the clips from Donaghy and thinking, this is ugly, this guy is really trying to strangle the NBA. And I can understand it from his point of view, he's resentful and all of that. But he is gaining no traction on it. Tiger should get a Christmas card from the NBA offices."
• A Western scout on Sacramento rookie point guard Tyreke Evans: "He should be the favorite for Rookie of the Year. They don't have their key player in Kevin Martin, but Evans has stepped up in a big way and kept them relevant. Defensively, he's a cut above, and offensively, he makes everybody around him better. And I'm not sure you can say either of those things quite so much about Brandon Jennings [in Milwaukee]. The biggest surprise is how well his game has transferred over to the NBA, and his feel for the game is better than what anyone could have expected."
• Instead of fines, throw offenders through a table. Cuban, the Mavericks' owner, appeared to survive without major injury when he was body-slammed through a table recently at a WWE Raw event in Dallas. It got me to thinking about how passé it has to become to fine members of the NBA. Instead of demanding money from loudmouths and misbehavers, why not turn the punishment into publicity? When a coach or a player or Cuban complains too much about the officiating, throw him through a table. As always, this penalty could be tested in the D-League, with the first sentence carried out against Utah Flash owner Brandt Andersen for tricking ticket buyers into believing MichaelJordan would appear at halftime to play one-on-one against Bryon Russell. Fans would appreciate the gesture.