How the NBA kept the bubble from bursting

October 15, 2020 0 By boss

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On the second Sunday in October, an unprecedented 12 months after the National Basketball Association’s 74th season tipped off with preseason games, the league finally crowned a champion—the Los Angeles Lakers. It was a made-for-TV moment: LeBron James captured his fourth title and, more historically, did it with his third team. By leading the Lakers to victory against the feisty Miami Heat—the team with which he won his first two rings—James completed his mission to restore the storied franchise to its past glory. He also solidified his claim as one of the game’s all-time greatest players. 

But the night was about so much more than the triumph by James and his teammates. It also was the capstone to a year of unprecedented tumult that included a financially painful spat with China last fall, the unexpected death of former commissioner David Stern on New Year’s Day, and the tragic demise weeks later of retired Laker superstar Kobe Bryant in a helicopter crash. And that was all before the NBA suspended its season on March 11 after a Utah Jazz player tested positive for COVID-19—a watershed moment in the early days of the pandemic that reinforced the seriousness of the health crisis at hand.

That James was able to hoist the Larry O’Brien trophy at all is a testament to how the NBA rebounded in the weeks and months after the shutdown. By now the outline of the story is well known. Shuttered for much of the spring and early summer, the NBA crafted a plan for a Disney-hosted bubble in Orlando and worked out an arrangement with the players to restart play with 22 of the league’s 30 teams. (The bubble excluded teams without a realistic shot at the playoffs to reduce headcount.) It then proceeded to stage 172 games over two-plus months without a single player, league official, or team staffer testing positive for the novel coronavirus. 

The NBA’s fractured season came at a tremendous cost. Bubble expenses alone totaled about $180 million, and the league undershot its preseason revenue projections by as much as $1.5 billion because of the pandemic. Yet the overall success of the NBA in the face of adversity is something many other businesses can only dream of. The bubble not only salvaged what could have been a devastating year financially, but it also put a global spotlight on the league’s product. And it further boosted the reputation of NBA commissioner Adam Silver, considered by many to be the best in professional sports.

NBA11.20.Practice Arena
To create practice space in the bubble, the NBA installed courts in a Disney hotel ballroom.
Joe Murphy—NBAE/Getty Images

Restarting a season after stopping it cold was an operational feat of epic proportions. And pulling it off with a minimum of dissent and drama represents a textbook case of labor relations done right—a nontrivial achievement given the amount of money and the size of the egos involved. The feat is all the more remarkable given that it came about during a period of generational social justice upheaval that profoundly affected the NBA’s players, from superstars to scrubs, and that at more than one point threatened to torpedo the season.

Those with the most on the line seem to appreciate the victory of a shortened but healthy season. “I think the league did a masterful job of doing the best it could to keep revenue coming in for both the teams and the players,” says Los Angeles Clippers owner Steve Ballmer, the former Microsoft CEO and a member of the NBA’s board of governors, which met weekly throughout the crisis. “Juggling those interests and being willing to put in some significant costs with some significant benefit, I just think the league was phenomenal.”

The NBA wasn’t the only sports league to snatch victory from the jaws of a pandemic. The WNBA pulled off a similar bubble experience in Bradenton, Fla., on the state’s west coast. NHL teams finished the season shuttling between two Canadian cities, Toronto and Edmonton. And even Major League Baseball, though hampered by multiple outbreaks of the virus over the course of a truncated schedule, has managed to make it deep into its playoffs with televised games in stadiums with cardboard cutouts for fans.

NBA11.20.Virtual Fans
SCREEN TIME: To bring fans into the mix virtually, the league installed giant video displays in the arenas. Among the fans “attending” Game 1 of the finals were TV anchor Robin Roberts, retired NBA star Shaquille O’Neal, and former President Barack Obama.
David Dow—NBAE/Getty Images

But by mastering the bubble the way it did, the NBA showed once again why it is viewed as one of the world’s best-managed sports leagues. “I don’t think there’s a brand in America that is more consistent than the NBA,” says David Carter, a sports business professor at USC’s Marshall School of Business, strategic marketing consultant, and longtime observer of the league. “To me, a brand is a promise, and you know what you’re going to get out of the NBA, just as you know what you’re going to get out of Tiffany and Harley-Davidson.” 

Compared with other professional leagues, says Carter, the NBA “just seemed to be more uniform, more in lockstep for how they handled major issues, whether it’s COVID, or social justice, or putting together a bubble that works.” And understanding why reveals valuable lessons for businesses and leaders well beyond the realm of sports. 

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Chris Paul, the star guard for the Oklahoma City Thunder and the president of the National Basketball Players Association, knows firsthand what, and who, it took to make the bubble work. In fact, when he arrived in Orlando he says he sought out Kelly Flatow, executive vice president for events for the NBA. “I just wanted to give her the biggest hug,” says Paul. “Because we had been on all these Zooms together where we’d been talking about this, talking about that, talking about logistics.”

The logistics were like nothing Flatow, a 14-year veteran of the NBA, had ever seen. Her group puts on more than 200 events a year, from the All-Star weekend to games outside the U.S. Planning for these events begins years in advance, though, and they never involve more than two teams. “This was having 22 teams and roughly 350 players, all coming together in one environment,” she says. “There was no playbook or blueprint for this.”

Flatow’s team spent the late spring and early summer on Zoom calls and messaging each other on Slack from their respective homes near New York City. After they got to the Disney World ESPN World Wide Sports Complex, home base to the bubble, a core group of 15 met daily at 8 a.m. to discuss the tasks of the day—whether it was building seven practice facilities, including one that went up in a Disney World hotel ballroom, or erecting a broadcast center for games without fans. Every Sunday Flatow hosted an all-hands meeting for the cross-functional staff of nearly 150 that spanned communications and medical to IT and security. 

0

Number of players in the bubble who tested positivE for COVID-19

172

Number of games played in the NBA’s bubble after the restart

By the time games were in full swing, it took an even larger number, a proverbial 6,500-person village, to service the entire community in the bubble in Orlando. “I analogize it a bit to when you go to a movie and you see the actors on the screen and then the credits start rolling at the end, and they keep rolling and they keep rolling,” Adam Silver, the NBA commissioner, said at a press conference before the finals series began. (Silver gamely tried to persuade people to use the word “campus” rather than “bubble.” Everyone called it a bubble.) He singled out Flatow for praise, calling her “in essence the concierge” for the assembled crew. 

She did “everything from making sure the buses run on time to [assisting] those of you in this room who requested feather pillows. I know who you are. I know all the personal requests that everyone here has made.” 

NBA11.20.Adam Silver
BUBBLE BUDDIES: NBA commissioner
Adam Silver (being interviewed before a finals game) was in constant
communication with players’ union president Chris Paul as the bubble plan came together.
Douglas P. DeFelice—Getty Images

More seriously, the NBA also had to invent health protocols from scratch. A former corporate lawyer named David Weiss, the NBA’s senior vice president for player matters, quickly learned enough about infectious diseases and testing to work with a team of doctors to design the elaborate health rules that governed the bubble. Weiss also regularly briefed the owners. “It was absolutely stunning how fast some of the league staff came up to speed on the health issues,” says Ballmer.

The league established a daily testing regimen for everyone who stayed on the campus at an expense of more than $100 per test. Everyone not playing, coaching, or officiating games were required to wear masks in the presence of others, particularly because support staff left the bubble after their shifts.

But while league officials were able to stay ahead of the virus, there were other challenges they didn’t see coming.

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On Aug. 26, in the middle of the playoffs, the Milwaukee Bucks chose not to come out of their locker room for their Game 5 playoff matchup with the Orlando Magic. They made the decision not to play in order to protest the shooting of a Black man named Jacob Blake by a police officer in Kenosha, Wis. What began as a one-game walkout—some called it a boycott, while Silver let it be known he preferred “work stoppage”—quickly cascaded into a full cessation of play in the NBA as well as other sports leagues. The next day the remaining players and coaches in Orlando gathered to decide if they would return to the court. The season—and the revenue all parties would reap from completing the playoffs—hung in the balance. 

Before the meeting, Paul, the players’ union president, spoke with Silver. The directness of the exchange is illustrative of the trust that the two sides have in each other. “I just said, ‘I’ll let you know,’ ” says Paul. “I know it sounds simple. But that’s real, you know? At the end of the day, obviously we’re partners and it’s all about the game. But I’m a player. I know how players feel. And this was bigger than the game.”

The meeting itself was an extraordinary moment of mass catharsis for the athletes. “It was not fun, but it was really astonishing to see 150 men spend hours in this crowded banquet hall screaming, yelling, laughing, crying, but ultimately coming together as brothers,” says Michele Roberts, executive director of the National Basketball Players Association. “I’ve never seen anything like it. That’s what democracy looks like. And it was quite stunning.” 

NBA11.20.Chris Paul
Chris Paul (driving to the basket for Oklahoma City in a playoff game in August) was in constant communication with NBA commissioner Adam Silver as the bubble plan came together.
Nathaniel S. Butler—NBAE/Getty Images

After more discussion the next day, the players agreed to go back to work, encouraged by an agreement with team owners that stadiums across the country would be used as polling stations for the upcoming election.

Businesses everywhere, especially those with unionized workforces, have had to deal with sensitive labor-relations issues during this time of pandemic-induced business shortfalls. But more than most leagues, the NBA came into its difficult year enjoying a history of mutual accommodation with its players. “Silver and Roberts have a ton of credibility,” says Joshua Mendelsohn, a labor lawyer and author of The Cap, a new history of labor relations at the NBA centered on the introduction of a salary cap in 1983. When the season was suspended and revenue stopped flowing, the owners could have ceased paying salaries. They didn’t. “The owners continued to pay the players,” says Mendelsohn. “The union did a good job of negotiating, including upping the liability if someone got sick. They listened to the players. Without the players, there is no game.” 

That mutual understanding paid dividends before play even began in the bubble. After the killing of George Floyd by police officers in Minneapolis in late May, and the surge in social justice demonstrations that it sparked, many of the league’s stars were unsure they should resume the season. They feared distracting from the national conversation about race.

$180 million

TOtal costs incurred by the NBA to put on the bubble

$1.5 billion

Total hit to revenue incurred by the NBA from the disruption of the season

6,500

Number of workers needed to make the bubble possible

But the players also recognized the platform they would have by returning. “We understood the economic ramifications and the financials of not returning,” says Andre Iguodala, the Miami Heat forward and first vice president of the players’ union. “But the political landscape of the country and what was happening with race relations made it bigger than money. And I think that’s what made it special for a lot of us to say, ‘Let’s do it for a bigger reason than just us going out and getting a check.’ ”

So they negotiated to have certain approved messages—like “Vote” and “Say Their Names”—associated with the Black Lives Matter movement printed on the backs of their jerseys. It’s the kind of compromise that Silver and Roberts are experienced at negotiating. “I have had fights with Adam. It’s not hunky-dory all the time,” says Roberts. “But at the end of the day, we do behave like adults.”

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No matter how successful the NBA was in making the best of a bad situation this year, the fact remains that the pandemic slammed the league’s finances in the same manner it has hurt so many businesses around the world. The league entered last fall expecting to collect $10 billion for the season, with about 40% of that figure coming from so-called game-night revenue: tickets, concessions, merchandise, and the like. Though the league did complete about 80% of its season before it was suspended, this revenue stream went away the moment fans stopped being able to attend games. 

The pandemic exacerbated what already had been a financially traumatic year. When Daryl Morey, general manager of the Houston Rockets, last October tweeted an image showing support for protesters in Hong Kong, Chinese authorities quickly canceled an exhibition game in Shanghai and pulled NBA games from state broadcaster CCTV. Silver took heat from multiple quarters. The NBA initially called Morey’s tweet “regrettable.” But the league quickly backtracked and said that it would not censor players or team owners. The NBA estimates the China imbroglio cost $400 million in lost revenue and jeopardized relations with its fastest-growing market.

Signs of a thaw appeared just as the season was ending: CCTV aired the last two games of the finals. “We were only given 12 hours’ notice that we were returning to CCTV, without a lot of explanation,” says Silver. “Ultimately there was a sense coming out of China that we were not going to change. We are who we are. We are exporting American values.”

NBA11.20.Michele Roberts
STEADY VOICE: Michele Roberts, the executive director of the National Basketball Players Association and a onetime public defender, advised the union on how to turn the bubble into a
platform for social justice advocacy.
Courtesy of Michael Patton/NBPA

Adds Silver: “What came from the NBA with those last two finals games on CCTV were images of players wearing T-shirts that say ‘vote’ and ‘equality’ and ‘liberty,’ not necessarily values people have traditionally associated with China.”

Television was challenged in the NBA’s home market, too, for very different reasons. The first game of the best-of-seven championship series broadcast on Disney-owned ABC, garnered the smallest television audience ever recorded for a single game in the NBA Finals—a 4.1 rating with 7.41 million viewers, according to analyst Jon “Paulsen” Lewis of Sports Media Watch. Lewis estimates that viewership for this year’s series was down by at least 40% from last year. 

I have had fights with Adam. It’s not hunky-dory all the time.

Michele Roberts, Executive Director of the National Basketball Players Association

The NBA is hardly alone among professional sports leagues in seeing viewership declines. Viewership for the NHL’s Stanley Cup Final was down 61%, Lewis estimates. And the reworked MLB regular season lost a quarter of its audience from the year before. 

Unfortunate timing is partly to blame for the NBA’s ratings slide. The finals usually conclude in June rather than October, when it is competing with football and baseball, among other sports. One extraordinary day in September featured events from 12 top sports, including Major League Soccer, the WNBA, tennis’s U.S. Open, and college football. The NBA even had to contend with a crazy election season. Game 3 of the finals competed, for example, with wall-to-wall coverage of President Trump’s surprise COVID-19 diagnosis.

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The end of the bubble means the beginning of a new, difficult chapter. There’s plenty of work ahead—for the players, the owners, and league officials. Negotiations to revisit the collective bargaining agreement already are underway. The delayed NBA draft is slated for Nov. 18. And the league has floated the idea of beginning the next season in January, with the presence of fans uncertain. Indeed the biggest debate in the weeks ahead will likely be about the best and fairest way to share the financial hit the league is facing. Says Roberts: “It’s no secret the conversation will entail how to spread the loss over a longer period.”

The NBA’s 1,500 or so league-office employees, at least, got some post-finals good news. Silver told them by email that each would receive a one-time $1,000 bonus as well as four consecutive Fridays and all of Thanksgiving week off.

I don’t think there’s a brand in America that is more consistent than the NBA.

David Carter, sports business professor at USC

As for the commissioner himself, he didn’t fly north when most of the rest of the league staff fled the bubble following the last game. “Believe it or not, I’m still in Orlando,” he told Fortune a couple of days later. “My wife and our two daughters came down, and we’re going to Disney World for two days. It’s like that commercial: ‘What are you going to do after the championship? We’re going to Disney World.’ ”

It’s not entirely a fairy tale ending. The pandemic is still raging, after all. But it’s about as close as anyone’s going to get to one in a year like this. 

Additional reporting by Andrew Nusca.

A version of this article appears in the November 2020 issue of Fortune.

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