An Interview with NBA D-League President Dan Reed, Part 1

Friday, September 18, 2009

Since taking over as NBA Development League President on July 1, 2007, Dan Reed has overseen continued growth of the NBA's minor league system. He's helped the league grow and expand into the eastern part of the country with Erie last year as well as Maine and Springfield for the upcoming season.

Reed has also spearheaded the league's efforts to be the most accessible league in the world, embracing social media and encouraging the D-League to reach out to fans via blogging, Facebook, Twitter, and MySpace. So I probably should not have been surprised when Reed graciously agreed to speak with me about the D-League and the Erie BayHawks, but I definitely was excited.

Our conversation was so information-rich that I've decided to break it up into two parts. Part one focuses on issues that affect the D-League as a whole. Enjoy!

Blog Talk BayHawk (BTB): Though there is still room for the D-League to grow in terms of mass appeal, there is a clear cult following of fans that is evident, especially on the Internet through blogs, Twitter, Facebook, MySpace, etc. Some leagues like the NFL seem almost scared of social media but the D-League seems to embrace it wholeheartedly. Why is that and how has it paid off?

Dan Reed (DR): In the NBA Development League, we aim to be the most accessible sports league in the world, and we made a decision that embracing social media was a great way to provide fans with access, provide fans with the opportunity to really understand how this league works—both in front of the scenes and behind the scenes. And selfishly it was a great opportunity to share our message directly with the fans because we are still a relatively new league on the scene.

As you mentioned, there is a very deep following of NBA D-League fans, but there are still many people that are still learning what this league's about. And it's a great opportunity for us to share a very authentic message directly with fans who are interested in knowing. What we've found is that the fans who are believers in the league and the people that are very knowledgeable about the league are using the same social media tools to tell everybody else. And that was part of the idea because we know we have a great product.

We know it's a great experience in the arena, and we produce nearly 20 percent of NBA players and growing. So, we've got a great message and a great story. It's just a matter of getting the word out, and we feel that social media is a great way to do that while at the same time providing the level of access to our fans that we pride ourselves on.

BTB: Absolutely. When I jumped into this blog thing, because I didn't really see people in Erie getting as excited as I thought they should be, it was really great to see that other people around the country were doing this for other teams. You've got Ridiculous Upside covering the D-League as a whole. It was great to see that there are lots of people that are really passionate―not just about basketball, but actually about the D-League―and I think that's going to help it grow. I think it's cool that you guys are so open to people like me and others in social media. You're ahead of the curb in terms of most sports leagues.

DR: Well, thank you. We also strive to be innovators, so it's nice of you to say that.

BTB: Sticking off the court, the D-League has grown significantly since beginning with eight teams in 2001. The BayHawks were part of an expansion last year, and two additional expansion teams in Springfield and Maine will begin this year. However, there have also been a handful of franchises that have gone under, including last year's champion Colorado 14ers. What is the D-League doing to continue the growth of the league while also working to protect its teams/cities from going under?

DR: I think the really positive news is that we have been growing so aggressively. In the last three years, we've doubled the size of the league from eight to 16 teams, and we'll have the same number of 16 teams playing in the league this season. What that shows is that the demand for NBA Development League teams is very strong, and we have a very strong set of owners.

If you look at the newest teams that have come into the league, the Maine Red Claws are owned by the chairman of TD Banknorth, one of the largest companies in Maine. The Springfield Armor are owned by a gentleman who owns four very successful minor league baseball teams. The Reno Bighorns are owned by the group that owns the AAA baseball team, the Reno Aces. Our new Frisco team is owned by Donnie Nelson, general manager of the Dallas Mavericks. So, if you look at the latest teams that have come into our league—and that's not even mentioning Erie, who's owned by the chairman of a Fortune 500 company in Cleveland—it demonstrates that a very strong caliber of owner is increasingly attracted to this league, and we continue to grow despite the challenges of the economy and despite the fact that I think every league in the world is reevaluating the team business model.

It's just sort of a tough business for everybody in every industry right now with the economy being what it is. And so, in terms of what we're doing, we're continuing to invest in our teams. We're continuing to work closely with our teams to take costs out of the system like trying to get smarter with the way that we schedule. Teams are looking at every item and trying to find ways to reduce costs but at the same time looking to find new revenue opportunities.

We're working on how can we grow our media presence, how can we continue to grow our sponsorship base―and those numbers have been growing consistently over the last three years―our team sponsorship revenues increased by double digits every year. Our team ticket sales have also been steadily increasing over time. And most importantly, the valuations of our teams have quadrupled over the last two years. We, like very company in every industry, are focused on how do we continue to improve the fundamental business proposition in our league. I think it's very strong now, but it can and will get stronger.

BTB: One of the things that I think helps you as a business, and I think you would agree with me on this, is your connection to the NBA that other minor leagues haven't had in the past. What is the D-League doing to get more NBA teams to invest more―money but also time―into utilizing the D-League as a developmental tool for their organization?

DR: One fundamental change we made that I think over the long term will have a big impact on both the NBA and the NBA Development League is the adoption of our single-affiliation partnership model―or as it is popularly known, the hybrid model―which allows NBA teams to essentially take control of the basketball operations for their NBA Development League team.

This is something that NBA teams have expressed a lot of interest in because some NBA teams have not been able to take advantage of the league the way that they would like to—sometimes because of injuries or because of circumstances outside of their control. Everyone is very passionate about the NBA Development League. Everyone sees the value that the NBA Development League provides, and it's really just whether the opportunities line up to take advantage of it.

There are many NBA teams that have expressed that they would be even more engaged if they actually had control of the basketball operations, so we made that opportunity available. It says a lot that in this tough economy there was an NBA team that took advantage of it last year. The Houston Rockets partnered with the Rio Grande Valley Vipers, and now the Rockets are in full control of the basketball operations of the Vipers. And by the way, while the Rockets obviously see a lot of value in that from a basketball standpoint, that's another thing that helps the economics of the NBA Development League team because those basketball operations costs come right off the bottom line for that team.

That's one thing that we've done based directly on NBA team feedback that allowed them to get more involved. Other things that we do are our Showcase. It's an event that we hold every year that all 30 NBA teams participate in. It's a great scouting opportunity for them, and it's an opportunity for them to get closer to the D-League. We have what we call an affiliate partner program where we encouraged NBA teams and NBA Development League teams both on the business and the basketball side to work together. So, over the last two years, you've seen an increase in the number of NBA D-League head coaches who have participated in their NBA parent team's training camps, for example. You're seeing teams that are having weekly/daily calls when a player's signed. You're seeing teams share information about what sets they're running and what skill that they'd like a particular player to improve upon.

There are conversations all the time between NBA teams and NBA Development League teams―and, frankly, from us at the league office―about how teams can use the system and how it can grow. I think we're in a good place.

If you look at the stats, the fact that nearly 20 percent of NBA players are formerly of the NBA Development League. We had an all-time high number of players called up to the NBA last year; we had 20 players called up to the NBA. The number of assignments from NBA teams to the NBA Development League continues to grow. The system is working. There's no doubt about it. It's just a matter of, over time, proving out that adoption model. But we've seen steady and consistent growth in this area, and we expect to see even more down the road.

BTB: Keeping along those lines, you talked about how the affiliation model has worked out. As the D-League continues to grow and expand, does the D-League aim to someday work as a farm system for the NBA similar to Major League Baseball where there's a one-to-one team correspondence? Is that something that's in the plans or what is the direction of growth for the D-League in the future?

DR: I would say that our goal is to build the perfect minor league system for the NBA and the game of basketball. There are certainly other models out there to look at. You mentioned the minor league baseball model where it's a one-to-one relationship. You can look at hockey where it's not quite a one-to-one relationship, but the system still works quite effectively. I think there's still an open question as to what is the ideal model for basketball.

We are certainly the closest to the ideal model that's ever come about so far. Every team is directly affiliated with an NBA Development League team. We are seeing the up-and-back movement that you typically associate with those leagues, and the proof is in the pudding. If you look at the players in the NBA Development League, 20 percent of the players in the NBA Development League in any given year will also play in the NBA that same season. And, I think in minor league baseball, 8 percent of all the players in minor league baseball will ever make the majors—much less in the same year.

In many ways, we are already that quote-unquote true minor league system for the NBA. But the answer is yes, we're still looking to grow and strengthen it. I expect that over time we will add more teams to the league. I expect that over time NBA teams will continue to take more and more advantage of the league. I think the upcoming collective bargaining discussions with the NBA Players Association offers an opportunity to continue to change our model. In eight short years we've made big progress, and I think that eight years from now the league will look even better in terms of being a true minor league for the NBA.

BTB: Yeah, it's really impressive how much has developed In such a short time. I guess the Development League is an appropriate name in that sense. I think one of the thing that helps is that you [the D-League] are innovators, you're not afraid to try new things. Playing the game of H-O-R-S-E at All-Star Weekend and the pick-your-poison playoff format adopted last year immediately come to mind. Are there any experimental plans in the works this season, anything new the D-League will be trying out?

We do have a history of that, and it's something we pay a lot of attention to. It's part of our mission to be the [research and development] department of the NBA. There are two areas that we are spending a a lot of time on now.

One is how do we continue to be better at the core process of development. We are taking a look at other leagues, other industries, other businesses, and identifying what tactics we can apply to our league because we are the Development League after all. And while we've certainly demonstrated that we have a good track record with our promotions to the NBA―not only in terms of players but also with coaches and referees―we want to be the best in the world at that, and we have to innovate in order to do that.

The other area that you can expect to see some innovations from us over the coming years is in the area of statistics. There is certainly a cult following around basketball statistics and the evolution of basketball statistics. I think the unique thing about our league is that unlike NBA teams, who are all investing in statistics in a lot of different ways but they're also very proprietary―they're not interested in sharing their methods, not interested in sharing their stats because it would let go of their competitive advantage—is that we have no such issues.

In many ways, we can be a laboratory to experiment with different ways of collecting and calculating statistics. If there are new statistics out there that should be incorporated into the game, we're a great test lab to do that. We've actually assembled a group of people from around the country who have expressed interest in working with us on this, and we're looking to work collaboratively with them and see how we can reorganize ourselves and eventually help move the discussion along in terms of basketball statistics.

BTB: Is that something that's going to show up in the box score? Is it something that we're going to see this year or a bit more down the road?

We're still in the midst of determining how fast we can move in the area, but that certainly would be the long term goal, that to the extent that there are meaningful statistics that can be captured and calculated, that we can implement them. And not only the way that we capture and report statistics but the way that we report them to NBA teams as it relates to having them evaluate players in our league to be called up or how their assigned players are progressing. That may not happen right away. First you've got to figure out what statistics make the most sense and how to capture those. But the idea would be to use that information throughout the league.

BTB: One last general D-League question. The new schedule came out not too long ago and everyone noticed a shift in the way the schedule was put together with the unbalanced model promoting local rivalries. What was the thinking behind the new model and what has the response been?

DR: It certainly does serve to promote local rivalries as teams that are nearby each other are going to play each other more frequently. This is one of those areas when we looked at how to continue to invest in the business because if you look at other minor leagues, they have a very highly regionalized, and in many cases, unbalanced schedule that serves to promote rivalries but also to reduce travel costs.

For us, we thought it was an appropriate time to take that step to do those same things in our league. We're spread pretty well around the country, and this was an opportunity to pump up the rivalries locally while saving teams a pretty significant amount on travel. I'm happy to say we were successful in that effort. We still will make sure that every team gets to play each other at least once during the course of the season, and we think it will serve to promote rivalries and fans in every market will still get the opportunity to see the best players in the league and the best basketball in the world outside the NBA on their floors during the season.

BTB: I was really happy to see that yout kept it so that each team is going to play every team at least once, so that someone like me with season tickets can get to see pretty much everybody in the league that way. And it certainly makes sense from a financial standpoint to save on travel costs, especially in today's economy. So it's sort of the best for both worlds that way.

DR: I think that's right. And I'd say as well that with NBA Futurecast, fans also have the ability now that they didn't have a couple years ago to watch every team in the D-League regardless. That's an areas where we're putting some additional investment as well, and I think you'll see an improved NBA FutureCast as well as an easier ability to catch highlights of the teams in the league this season.

BTB: That's great news, and I'm definitely looking forward to that, especially for the BayHawks' road games this year.

***UPDATE: Check out part two of my interview with Dan Reed where we speak about the Erie BayHawks, their arrival on the D-League scene last year, and the league president's impressions of Erie as a basketball town.


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About this blog/blogger

Blog Talk BayHawk is an unofficial Erie BayHawks blog covering the NBA D-League. It features opinions and information about the NBADL and the Erie BayHawks. Blog Talk BayHawk is written from a basketball fan’s perspective to fill In the gaps left by professional journalists’ coverage of BayHawks basketball and the Erie professional basketball scene.

Matt Hubert is a 25-year-old writer and basketball fanatic born and raised in Erie, Pa. He graduated from Mercyhurst College in 2007 with a bachelor's degree in English and a dual concentration in writing and creative writing. Matt's not wavering from his stance as a lifelong Los Angeles Lakers fan, but he will cover the BayHawks' NBA affiliates in Cleveland and Toronto when it makes sense to do so throughout the year.

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