By Drew Berube
On April 4, 2019, the annual University of Miami School of Law, Global Entertainment and Sports Law + Industry Conference, hosted a panel titled, A View from the NBA Front Office. Executives from around the league gave their perspective of the current status of the NBA and the issues they face. Moderated by Professor Andres Sawicki of the University of Miami School of Law, the panel consisted of Ted Johnson, Chief Strategy Officer of the Minnesota Timberwolves; Steve Silton, an attorney at Cozen O’Connor and Adjunct Faculty at the University of Miami School of Law in the Entertainment, Arts, and Sports Law L.L.M.; Vered Yakovee, Vice president and Associate General Counsel at the Miami HEAT; and Joe Pierce, Vice President and General Counsel for the Charlotte Hornets.
The panel began with each panelist discussing their background and what led them to their current positions.
Ted Johnson, Chief Strategy Officer, Minnesota Timberwolves
“I’m not an attorney, [though] I’ve had a lawyer-like career…. I took my LSAT, got accepted into law school, and took a left turn to work in politics. [I] had a great opportunity to go up to Washington D.C., [and] intern for a member of Congress…. I started my career in paid campaigns…and spent some time in the Attorney General’s office working with a lot of attorneys, before I went to work for a PR agency. [I was] then recruited over to the Timberwolves 15 years ago. I’ve worn a number of different hats within the organization. I started out by running the communications arm and eventually ran half of the business operations as the CMO [Chief Marketing Officer]. About four years ago, I transitioned again to Chief Strategy Officer…. This is a role that’s emerging and typically Chief Strategy Officers have a broad set of experiences within a front office and tackle a lot of the things that fall outside of the normal lines of running a basketball team. The vast majority of my time is spent…doing business development, and trying to lead a transition within our organization from a basketball team to an enterprise level operation that’s involved in multiple franchises and properties…”
Steve Silton, Attorney at Cozen O’Connor & Adjunct Faculty at the University of Miami School of Law in the Entertainment, Arts, and Sports Law L.L.M.
“I’ve been practicing law now for 23 years…. I was trained as a general corporate attorney…[and] started practicing in commercial bankruptcy. Back in 2007, I had my own practice… [and] I was marketing a client who had a regional catering company. I had never done any sports work prior to that time and really wanted to. As a part of the marketing effort for my client, I was introduced to a player who had recently retired from the NFL, Jack Rourke. [During his playing days, he] started a number of businesses…with the NBA…and he needed a lawyer. [I] was glad to help out Jack…[and he] wound up introducing me…to Drew Rosenhaus. I got to know Drew and his brother, Jason, very well and we became very close. [In the process], my craft…expanded from representing players, to representing agents, to working…with teams. I’ve had the privilege to work with a number of professional sports teams including the Minnesota Timberwolves, Wild, [and] Vikings.”
Vered Yakovee, Vice President & Associate General Counsel, Miami HEAT
“Before [I began my current role], I was Associate Team Counsel for the Boston Celtics. Before [the Celtics] I had my own law firm in policyholder-side insurance and risk management. [I] did transactions similar to what I’m doing now, [as an] outside counsel [and worked on] some sponsorship contracts and…everything under the sun for…the Sugar Bowl. Before I had my own firm, I was with a big firm in Los Angeles known for their policyholder-side insurance. Before that, I was volunteering for an athletic organization, [the Southern California Outrigger Racing Association] that I also competed with. I raced outrigger canoes for almost 20 years. Almost no one was involved in this type of insurance, so when there’s no one doing something, it’s a really good opportunity to come in and learn the full scope of whatever the subject matter is. I started doing [policyholder-side insurance] and continued to do that all the way until I went in-house with the Celtics.
Joe Pierce, Vice President & General Counsel, Charlotte Hornets
“I grew up in San Antonio, a major fan of the Spurs and was exposed to the business of sport at…an early age. [E]ven as I moved forward as a collegiate athlete, I…recognized that I wanted to work on the business side of the sports world and eventually did a JD/MBA [at the University of Pennsylvania Law School and the Wharton School of Business]. Going through the program I realized the benefit of a legal education and the chance to see the enterprise [of law and business] and all the issues that [they encompass] as opposed to being in just one silo. I realized [this] would be a good place for me to contribute on the legal side of sports or in general business.”
After law school, Pierce decided to go to the top law firm in Silicon Valley, and focus on building skills. While at the firm, a partner announced he was leaving, just four months after he became partner. “As a young impressionable first-year associate, I said, ‘So why is so-and-so leaving?’ And a friend of mine said, ‘He’s going to G-O-O-G-L-E dot com.’” Fortunately, Pierce fell back on his sports interest and eventually became the Associate General Counsel for the Jacksonville Jaguars. His journey then took him to Comcast working on their sports television RSN (Regional Sports Network) group, where he served as the Vice President of Legal & Business Affairs, negotiating TV rights deals for several years. Before his obtained his position with the Charlotte Bobcats (now the Hornets) he became the Senior Vice President, Associate General Counsel with Bank of America in Charlotte. “[It was] a little bit of a different route but still focused functionally on media, sports sponsorship and advertising, and talent work for the bank. I’ve been at the Hornets for just about five and a half years now.”
Professor Sawicki then asked the panelists who the main decision-makers and personalities in NBA front offices are?
Ted Johnson began by saying, “it really is different office to office. [W]hat you come to find out pretty quickly is every team is structured very differently. And that’s not only within the NBA but across leagues.”
“[T]here are different power centers. You have an executive office, but those executive officers and roles are different team-to-team. Ownership plays a large role in shaping the culture of what that team is. [O]ur owner made his money [and] fortune in a printing business. He has a very different approach to our business and how we are structured than someone who’s made their fortune, like Mark Cuban, in the technology center. [Y]ou can often have teams with the same titles, and yet, in Atlanta, the CMO [Chief Marketing Officer] carries much more sway because it’s led by the former CMO of Coca-Cola, than an organization whose CEO comes from the sales arm.”
“We’re one of the few teams left who doesn’t have an in-house counsel, so I fulfill a lot of the roles typically a General Counsel would. [M]y role is an emerging one that seems to change and evolve as sports has really become more than just running professional teams, it’s really become a sports and entertainment business. There really isn’t a typical [front office], and it varies greatly from team-to-team, league-to-league.”
Joe Pierce gave his perspective as he works with Hornets’ team leaders and executives. “These are family businesses, so there are unique dynamics in terms of how that business operates…. [You may have] an owner who has made their money in a certain industry and has their own business advisors that are also involved. These combined dynamics come to play together…but you have to get direction [from the] owner. They are going to be the guiding light in setting the culture and strategy for what the organization wants to achieve. However, many times the owner is not in the office on a daily basis, so they defer the day-to-day operational aspects to the CEO, President, or leadership team. You look at that balance to say…we’re going to be managing the operations on a daily basis, but we’re getting our strategic direction…from the owner’s goals and objectives.”
Vered Yakovee was asked to discuss her interactions between lawyers and non-lawyers. Specifically, if she approaches problems differently than her non-lawyer counterparts.
“[W]e approach things very differently. My number one goal is to provide a safety net for all the business endeavors. Most of the time, our company is really good about [bringing me] in at the point when they’re developing their idea and we sort through it collaboratively. Non-lawyers think about the creativity of their business endeavor and I’m thinking about making sure they stay within the safety zone. [F]or the most part, people…welcome getting guidelines at the outset because they [like to know the boundaries].
Johnson hit on a couple curial points when he weighed in on the topic. “Really good in-house counsels are people who are businesspeople. They’re applying a specialized level of knowledge and applying it to the larger business pools of the organization. The best relationships and collaborative environments are created when you approach it by understanding the business goals or objectives, and you all bring something a little different to the table. [I]t’s incredibly important to…become a master of a lot of different things, to become a great generalist, and to be able to prioritize or triage a lot of different things.”
As an outside counsel himself, the conversation then turned to Silton and his insight into how attorneys interact with other counsel.
“As Ted [said], it differs substantially from team to team, and…the majority of my sports work is with three different teams. [M]y interactions are very different and my entry point into each of the teams is very different. I preach…taking risks. If you don’t…push, we’re not really providing the extra value [you need to stay ambitious] in the incredibly competitive sports law business.”
Yakovee gave her perspective on the different levels of interaction she has with outside counsel. “All the outside lawyers…are different. I hire some of them because they’re…subject matter expert[s], and I need their expertise. With some of our outside counsel, I trust…that they understand the flow of our business and I’ll give them an entire contract and put them in touch with the particular business colleague of mine who can answer questions. I’ll watch and monitor, but I trust them to set the pace. [I]t really depends on the personality of the outside counsel, both how they interact with me and how…they interact with one of my colleagues.”
Next, the panel was asked to discuss the leading issues at the intersection of business and law in the NBA today. What keeps them up at night, but also, what gets them excited for the future?
Johnson led off the conversation. “The things that I’m working through are sports betting, [and occasionally] I’ll wear my old PR hat anytime a team or player crisis [comes up]. For us, it’s really this evolution to an enterprise model of multiple properties. We focused primarily on our NBA franchise and then over the last couple of years we’ve really started growing our portfolio…”
One of the main issues Pierce believes all teams need to pay more attention to is workplace conduct. “Commissioner Silver, five minutes into the job, had to deal with the situation at the Clippers. All businesses…are putting extra focus…on workplace conduct and making sure we’re creating the right culture where people can succeed and be proud of where they work and how they are treated. That’s a blending…of the legal and the business world, and we’ve gotten a lot more aligned between legal and [Human Resources] because you…realize the impact of having people that are productive, happy, and treated well [and how that affects] the end product of driving a business.”
Counsels’ Time Occupied by Globalization of Sport
Pierce was then asked to start the next topic which was to discuss the impact of globalization in the NBA.
“We are territorially restricted [to] a 150-mile radius…and so by nature that…leaves the global aspect to the league. On the margin, there are things a team can get involved in. Take the Hornets, for example, we just announced that next year we’re going to be playing a regular-season game in Paris and we have two French players. We can use this opportunity to help drive local sponsorships. We’ve learned, there are 50 companies in Charlotte that have French homes or major presence. This may be a way that we can connect with those organizations that aren’t spending money with us right now, but may want to associate with the NBA and our travel abroad.”
From more of the business side of the front office, Johnson gave a different look. “Typically, the world sport has been soccer. Domestically, the NFL’s been the 800-pound gorilla. We view the NBA as the one place where the world’s sports pop culture meets American sports pop culture. The NBA is the world’s largest social media brand, so, we have this incredible global footprint.”
“Traditionally, the way it’s been divided is that the teams have your local territories and the NBA tries to monetize the league outside the national borders, but that really has changed with the advent of social media. We have millions of followers of the Minnesota Timberwolves in China that I can activate right from Minneapolis, Minnesota. It’s a shifting landscape and we have other properties, such as the NBA’s joint venture with Take-Two Interactive, to start a new eSports NBA 2K league. It’s another opportunity for us to expand our footprint and deepen our relationship globally without nearly the amount of overhead it would take with a traditional model.”
“Forty percent of players now come from overseas. The elite players of soccer have many different professional leagues that they aspire to play in, but in basketball, there’s really only one league they all aspire to play in. The league is growing globally, it has this incredible footprint with multiple properties from eSports to the WNBA.”
Looking at the globalization and diversity in Miami itself, Yakovee added, “a lot of what we do that touches the international community, we do right here. Within the NBA, the Miami HEAT are in a unique position…as we have a little mini-version of the globe right here. We probably have more of a local, international base than any other team.”
Reflecting on the global reach of not only the NBA but the Minnesota Timberwolves, Johnson began, “I always find it amazing because most of my conversations in Minneapolis are, ‘who has the best team in Minnesota?’ What they don’t realize is, while there might be eighteen thousand people in that arena…and two hundred thousand households regionally watching the game, that very same game is registering five to ten million eyeballs around the world. [If] we’re playing a Sunday night game, we’ll have fifteen million people around the world watching that game. [I]n a sense, the people in the arena are really the television studio audience and a large part of our staff is focused on those local revenues and selling tickets in the community. Yet, the greater opportunity is really…around the world. We’re the largest exporter of the Minnesota brand.”
The value of teams is tied up in intangibles like brand and reputation, so the next question posed to the panel was how lawyers can help ensure teams are able to exploit, create, and raise their value?
“The leagues work differently”, Silton began, “the NBA…does a lot of their licensing through the league. The NFL is very different, they do a robust trademark practice directly for the Minnesota Vikings. One thing [you have to do is] try to protect the brands throughout the world. The NBA has a strong initiative in China and China doesn’t look at Intellectual Property, maybe as sacred as we do. That’s going to be a real and important challenge because that’s going to be a big chunk of the revenue going forward.”
Pierce continued the discussion by pointing out the fact that, “there are two ways you can be successful. You can make money and you can win. Ideally, you do both, but we all know how difficult it is on the winning side. That doesn’t mean if you fail, you’re not successful on the basketball side. You can still focus on the business side and make sure you’re doing as much as you can to drive revenue. Hopefully, that [revenue] will support the team side and help the team become successful. [It’s] a virtual cycle.”
Yakovee then presented her own question, which stuck out to her as she was preparing for the panel. The question presented was, what have you noticed that successful NBA organizations have in common? As an individual who has worked for multiple, undeniably successful organizations, in the Boston Celtics and Miami HEAT, Yakovee answered, “Nothing”. “One of the first things we touched on [is] how all the front offices…are structured so differently, and…that starts from ownership and…what they envision. You can’t say the Celtics aren’t successful and you can’t say the HEAT aren’t successful…but there is not one thing [an organization has] to have in order to be successful. It’s a different path depending on the character of the company.”
Silton interjected, “That’s an interesting point… [because as Pierce mentioned earlier] on the sports side it’s a zero-sum game [and] on the business side the teams actually work together.”
Johnson reiterated the point and added, “that is something that differentiates the NBA from the other leagues. TMBO (Team Marketing & Business Operations), is…a model developed in the NBA that a number of other leagues have…begun to emulate. We have a highly collaborative culture in the NBA and we work extensively with other teams. While it’s hypercompetitive on the team operations side…on the business side, it’s a highly collaborative environment. We have multiple meetings throughout the year and even have TMBO representatives. It’s an interim consultancy [where teams] share best practices. The philosophy of our league has been, ‘a rising tide lifts all boats’ and it’s served us very well….”
Legal Issues Change Depending on Whether You Are Winning or Losing
The panel was then opened up for questions from the audience. One question of particular interest asked the panelists to discuss the differences in issues they face when their respective teams are winning versus when they are losing?
Ted Johnson lead the response. “We consider ourselves a very successful organization and franchise. Yet, 90 percent of the brand that people associate with the Timberwolves is related to what happens on the court, [and] our failure to make it back to the playoffs. That has a certain amount of impact on staff, and it makes you work extra hard on the business side to make sure everyone on your staff doesn’t measure themselves against performance on the basketball side. You celebrate the small wins. You celebrate the fact that [your business team] is [being recognized for] best practices…shared around the league [and] you’re winning national awards. There’s a certain amount of pride in professionalism and…[that’s] something that’s really changed in my 15 years. [It] creates more of a challenge to create that control core within the organization when you aren’t winning on the court…it’s not quite so obvious to everyone else that you are a successful, thriving organization.”
Joe Pierce concluded, “control is a great word because you think about coming to an NBA game, what’s your experience? It’s the guest services usher, who is a part-time employee. Or your experience with the food and beverage concessionaire, who, in most cases, is not the team. [These] are areas that we don’t directly control, but may [have] a big impact on someone’s experience. We want to put the emphasis on those areas to create that positive experience, regardless of what the performance is on the floor.”
There is no one way to run the front office of an NBA franchise and no common thread between successful organizations. The NBA is in a unique position in many respects, but one of the most apparent is the league’s highly cooperative business side, facilitated by TMBO conferences. Additionally, the global reach of the NBA is unmatched. The NBA is the world’s largest social media brand and basketball players from across the globe aspire to play in the league. The NBA has a very unique place in the market and it will be interesting to see if they can capitalize on this position moving forward.
Drew Berube is a rising third-year law student at the University of Miami School of Law. He obtained his undergraduate degree in Sport Management from the University of Michigan. Drew has a strong background in professional and collegiate sports, including prior experiences with the NFL Players Association, the Denver Broncos, NFL Network, the Charlotte Hornets, and the University of Michigan Athletic Department.
