The Business of Sports with Rick Horrow

Sports Professor Riccaro on the $1.3 trillion business of sports, the intersection of sports and business.

USA Today helps sponsor a conference, sports, uh, uh, uh, innovation, uh, conference, SEI.

Uh, clearly a very important conference in Vegas.

2nd week in July, year 2, but there's so much more than that.

And one of the keys we can do to support it is on the record to gather a whole bunch of different opinions from some incredible opinion leaders in the space.

Danny Shea.

Utah Jazz, Nuggets, Bucks, Lakers, Suns, Heat.

On and on, and with the Magic in '99.

We're not gonna cover all of that, but clearly a veteran NBA player, veteran family lineage, we'll let him tell the story.

Danny, hey, how are you doing?

I am doing great.

And yes, my, my actually family history goes back to the founding of the NBA.

So, uh, I'm officially a lifer and, uh, uh, from the black and white era, luckily my career was in color the entire time, so I'm not that old, but, uh, Uh, but, but it's great looking back.

Well, obviously, your, your great lineage and even as you describe it, very humble.

Your dad Dolph, selected to the Naismith Memorial Basketball Hall of Fame.

What was it like growing up, uh, with him, tutored by him, talking basketball with him?

Must have been a treasure.

Well, not only that, but I was around experiences that really didn't exist for other people.

Remember, this is obviously pre-internet, pre-network, uh, you know, if you got to see a game a week, you know, that was a big deal.

You know, back in the mid 70s, people forget the final NBA finals weren't even uh broadcast live.

They were on tape delay to not compete with All in the Family and some of the other sit. that drew much better ratings.

And, uh, but my history goes back even before that.

My dad, one of the founding stars of the league in the late 40s, came out of NYU, uh, drafted by the Syracuse Nationals, now the 76ers, in 48, the NBA merged, uh, or became the NBA officially in 49, so he technically predates the NBA.

Uh, and my neighbors growing up were guys like Johnny Kerr and Hal Greer, and the Paul Seymour, those original Syracuse stars.

Danny Byzone, who invented the 24 2nd clock, was a family friend who was invented in Syracuse in the mid 50s.

I was actually named after Danny.

Uh, so you have that connection to the game as well.

Uh, so it's a very pivotal time in the league's history, you know, really, uh, we could, many people consider the 24 2nd clock the greatest innovation in sports, really saved basketball.

My career that I, being around my dad, I got to be a ball boy for the Buffalo Braves, their expansion year 1970, now the Clippers franchise.

So I was around on the working on the bench with Pistol Pete and and young Lu Alcinder and Uh, you know, that era players Ernie D came right after that with the Buffalo team.

Bob McAdoo got to watch those guys and then play against, uh, many of them, the Bob Lanier and like I said, McAdoo, that group, uh, and then had an 18 year career myself.

So really kind of expand the entire, uh, history of the league.

And to put some perspective on today, and then we'll get back to some of the NBA stuff, your host with Ian Thomas, uh, of the show called Center of Attention in Syracuse.

Obviously, you took your basketball talents off the court, and, uh, I, I, I, I, I assume that's part of the Kind of role model that emanates when you grow up in a journalistic dominated uh community like Syracuse University.

Well, what was interesting is I actually started as a rock DJ, uh, when I was in college, the, um, uh, guy who owns that station now, uh, Ed Levine, had a small rock station.

He was just out of New house, and he, uh, let me do the Sunday night guest DJ spot a couple of times, and I really liked it and stayed with it.

Uh, so I was a rock DJ in Syracuse for a couple of years, then when I was with the Nuggets, actually had a real rock DJ DJ job at one of the top FMs in Denver, stayed on the media side, ESPN.

Turner, uh, did color for the Sonics when I retired, and actually, even when I was an active player, uh, then I'm the only player in NBA history to be the team's radio analyst while I was on the active roster.

Uh, it's so interesting.

I was actually calling my own games.

I had ankle surgery, missed a few weeks, and the team's radio broadcaster was ill, so I actually, uh, subbed in as the, uh, uh, as the, as the color analyst for the, for the Nuggets broadcast while I was on the roster.

So I just went from the bench over 5 seats to the scores table and and called the game.

So stayed on the business and media side after my career.

I didn't get into the coaching side as much.

Basically, like, like I said, I got intrigued by business and stayed on that side of it.

Is that unique as far as you know it, that whole idea of calling color while you're still in the active roster.

I know a lot of color commentators who are voices of teams where the teams on the broadcast rights, a little worried about what happens, about what they say.

This takes it to a whole new level, doesn't it?

Well, I, I wasn't, you've heard of player coaches, obviously.

So I was the first player broadcaster.

I was injured, so I didn't actually like say, hold on a second, I have to go check into the game.

I mean, it wasn't quite that active, but, uh, but was it, what was really interesting is I learned a lot calling the games while I was on the roster, because now I'm number one, as I'm in the game most of the time, my coach Doug Moe, uh, was known.

Affectionately is the most foul-mouthed coach in the NBA and also one of the best.

And one of the best.

That was great.

I learned so much from him.

Uh, I had to sit next to him the whole game and listen to him, and I'm like, wow, is he like that one?

I'm in the game.

Holy cow.

Uh, so it was really a lot of fun.

We joked and ribbed about it all the time.

And every time, every once in a while, he'd look over and give me one special, just, uh, uh, you know, just to let him know that he didn't forget about me.

Uh, but yes, I, I think being a, uh, active player calling the wrong games is pretty unique.

What's the epiphany time where you said, OK, you know, you've played 16 seasons, 1818 total, but X number of seasons, and life after basketball is, and then you started focusing on life after basketball.

When was that?

Well, I knew, you know, during my career, uh, that, you know, I was gonna make whatever I was gonna make, you know, I was at the beginning of free.

Agency, but never hit like the big, big money that, you know, every, as you know, every player whoever retired said, if I was just 5 years old, right?

Because the money kept going up and up.

Uh, I did well, not, you know, not complaining.

Uh, so I, I really worked to get into like understanding money, investing.

Uh, at the time, there, it wasn't like it is now with internet and information and all that.

So it was, it was a bit dicier.

Um, and didn't have a lot of time to necessarily start a business, but when I retired, I ended up getting into the seminar world as far as learning through seminar education.

I met Robert Kiyosaki, the author of The Rich Dad series of books, uh, at an event, and, uh, he kind of encouraged me to, to do some, some education.

He was very big into financial literacy.

And I wasn't gonna go back and get my MBA, but I started doing seminars, and I, my wife and I did probably 2 or 3 events a month for 3 years on everything from real estate to entities, personal development, stock trading, etc. etc.

And, uh, you know, that's how I got into the business at the beginning.

I was a good saver, so I had money in the bank, but as most athletes do, they have no income.

Uh, I played till I was 40, so I wasn't really employable in the traditional sense, and that I had, you know, had never worked a corporate job.

Even though I had a strong education.

And so I really got into entrepreneurship.

And then, uh, interestingly, several years later, I kind of backed into a few corporate uh positions, and one thing led to another and, and kind of got me where I am today, and that is, you know, working for a global technology firm, teaching sports teams how to use AI and technology effectively as we get into this next explosion of technology.

All right, we'll talk about that in a second, but I just wanted to kind of one more stroll down, uh, on court memory lane.

We look at, we look at the Nuggets and, and the Bucks and Lakers, Sun's heat, uh, and even magic at, at a time, they all had a moment in the sun, really.

Glorified history.

Winning championships, uh, some years would be great.

When do you find out early in the season that it's going to be a great year, a bad year?

How much is players, how much is coaching, how much is chemistry?

Give me that.

Give me that overall perspective you have.

Well, chemistry is very underrated, uh, I think at the league level.

A, there's the turnover of players is as high as it's ever been.

Uh, you know, is that the money is so big that, uh, you know, you're, uh, right now, teams are chasing the star factor.

I find it interesting that in today's day and age, the two teams in the finals are among the lowest payrolls and the team, youngest and developed their players.

So it's interesting how that dynamic all of a sudden switch from super teams, right, to now, wow, we can develop teams and actually win.

As you know, it's a NBA is a copycat league.

Uh, you could generally tell relatively early how the team's going to do.

Uh, we've had, uh, like my, I'll tell you two specific seasons with the Nuggets.

We made a big trade my 3rd year to bring in Calvin Nat, Fat Lever, uh, Wayne Cooper traded Kiki Vander Weyden, who was a great start to Portland.

And uh Calvin Nat was really the key to that trade, although underrated, big physical tough, gave our whole team uh basically courage and strength.

And the first preseason game, we knew that everything fit together, had great chemistry.

We're gonna have a great year, ended up winning the division.

Next year, unfortunately, he tears his Achilles, the first game of the year.

So that obviously was a unique situation, extreme situation where, you know, things went south.

Uh, but you know, certain situations, you know, when I starting with the Jazz, my first year, uh, we didn't have a super talented team but had really good chemistry.

Uh, we were bumping along decent and had a big losing streak that kind of took us out of it in the middle of the season.

Uh, but that was a team where I learned it was a, it was a growth year.

And at that time, the Jazz were, you know, kind of near the bottom of the pile, so they were developing.

Uh, when I went to the Magic, it was, you know, at the end of the Shaq era.

I replaced Shaq there, still had a very strong team, Penny Hardaway, Nick Anderson, Grant.

Uh, so, but we're one step below that up that top tier, and, uh, my year here in Phoenix, we knew going in we were the best team in the league, played the entire season as the best team in the league.

Unfortunately, Danny Manning blew out his ACL about the, the 2/3 point of the season, so it took us from easily the best team to that top tier 5 or 6, ended up losing a heartbreaker game 7 to Houston the year team went nuts through the playoffs and Uh, ended up, uh, uh, swept the magic in the finals, uh, but that was, uh, you know, a great team, great year, every, you know, every game was electric and exciting.

So, uh, you know, you can generally tell what, you know, things are, are going on and off the rails, and chemistry, like I said, a very underrated component.

Uh, unanswerable question, but I'm gonna ask you anyway.

Uh, the, is basketball the on the court part better today than it was when you played or when your dad played?

Obviously, you have to adjust to the style of play.

I think that the players today are molding into the current style, which is, you know, 50% of the shots or threes.

Uh, so the game has really transformed.

I think it's exciting to watch again to a point.

I mean, I think sometimes the the 3 ball over you know over dominates, uh, you know, watching the playoffs now, especially the finals where teams are really defending again and playing with teamwork, moving the ball, that's exciting to watch.

And, uh, you know, my dad's era, it, you know, you know, starting at the beginning, the players weren't nearly as big and physical, uh, but the style of play was very um passing game, a lot of movements, uh, you know, a lot of freelance, which was a fun brand of basketball to watch.

It was a very physical game.

On my era, the 80s and 90s, obviously, it started with Bird magic, and then Jordan and Hakeem, and then all the way through Shaq and Kobe.

We used to joke that's when dinosaurs ruled the earth.

Every center, every team was loaded with bigs, every team played inside out.

Uh, I played with 10, 20,000 point centers at the same time, uh, during that, that era.

So when you look at the instant, you know, that was the dominant premier position.

The three-point line was something you do when you're down 7 with a minute to go.

You know, you didn't build around it.

Um, you might have a kick out 3, but there wasn't like you didn't run to the 3 point line.

Now I'm sorry, the teams have used analytics to say, well, if I shoot 38% from 3, that's better than 50% from 2.

So let's only shoot 3s, right?

So now every player, whether you're a point guard or a center, you gotta shoot 3s to be in the lead.

And, uh, so that has certainly morphed.

I think that, uh, you know, a team like Oklahoma City, which It you know, it's probably among the least 3 point active teams, uh, especially in the finals, is something that, you know, may bring that back a little bit more, you know, get to the rim, get to the free throw line, get high percentage shots.

Uh, but so we'll see, it's like I said, it's a copycat league and the teams that win kind of drive the style.

Put AI to the side for a minute because we're gonna finish with that with a thunder, cause that's obviously what you spend a lot of your time on.

The finan the, the structure of the NBA today versus a while ago, it's undergone a tremendous metamorphosis.

But it is interesting, you refer to your history of your dad and, you know, the Pacers and OKC or the, you know, too small. markets collectively, a little over 2 million since, as you say, the dinosaurs from Fort Wayne and Syracuse and Rochester ruled the earth in the early 50s as well.

So it proves today that small market teams can win in the NBA.

Well, there, I mean, if, if you look at the, you know, the teams that are doing well, right?

I mean, you know, New York had a good year, the Lakers are the Lakers, right, the Celtics are the Celtics.

Uh, but outside of that, right?

I mean, you have Minneapolis who is strong, uh, you at times you had Utah who is strong.

Uh, you know, now, like I said, Indiana, you've had Detroit, you know, who went through their phase, Orlando went through their, you know, their phase a couple of times.

And so there's no real magic, uh, you know, to it.

It's like I said, chemistry is very underrated.

The hard part is keeping a group together because free agency, uh, is such an omnipresent factor, you know, as you know, the contract lengths have gotten shorter and shorter over time due to collective bargaining, and owners not one to get committed to these long 89, 10 year deals.

So the, you know, the double edged side of that sword is that now your stars get to be free agents faster.

And uh, so again, tougher to keep teams together, two supermax guys will kind of wipe out your salary cap pretty quickly.

Uh as Phoenix has found out, highest payroll in the league don't make the playoffs.

Uh, so it's, you know, it's not a, it's not a perfect system.

And, uh, you know, like I said, teams that are starting to understand that, hopefully that pendulum will swing to really getting into the development, teamwork, uh, concept of, of getting involved in your team.

All right, let's talk about AI.

CCON is big in AI.

July 7 through 10, everybody, it's a major thought leadership convention and great opportunity.

So talk a little about your specific role with AI and your perception of AI in general.

Should we embrace it or be scared of it?

Uh, no, actually you should absolutely embrace it, especially in this context.

And the reason is, is as sports teams valuation skyrocket, and we only have to look at this month's headlines.

Celtics go for a $6 billion valuation, then the Lakers at almost double that at 10, highest valuations of any team in any sport in history.

Uh, to generate that kind of value, you have to, you know, keep up with the revenue.

And where does that come from?

Most teams sell out their arenas, so the any increase there is incremental.

Uh, you know who they are.

You have a physical person and a physical seat, but look, you sell them a ticket, you, you feed them, you park the car, you're pretty much done.

You sell them a jersey once a couple times a year, uh, and so it raise prices a little here and there, you know, but those, that's incremental improvement.

Most teams, less than 1% of fans will ever set foot in the arena.

So you have 99%, you know, 100 to 1.

Uh, of your fan base, you have no idea who they are or where they live.

Their, their Nielsen ratings this year, in the past.

Now with AI for the first time, you can, you know, create a very personalized, uh, hyper personalized relationship through streaming, through interaction, through social media.

Uh, you know, through your, you know, through your websites.

And so, uh, you know, now you can, uh, interact with fans out of market, out of country, by personality, by language, by, uh, you know, by their, their viewing habits.

You can now, uh, use AI to 2.5 hours, a long time to watch a game if I'm in London at 3 in the morning.

You know, now you can text me a 1020 minute version of the game.

You know, within minutes of the game ending.

And, you know, so now I can interact on a personal level with fans in a way that I never could before.

And that's where you're gonna see the massive growth in the next phase.

And that's gonna be all AI driven, because, like I said, now I can, uh, if I want to broadcast in, in Spanish in the past, I had to get 4 guys sitting there in Spanish during the game, right?

Now, I can broadcast in 100 languages with the touch of a button.

And, uh, you with my top team doing it, right?

Uh, my broadcasters, right?

Uh, instant translation, uh, you know, like I said, I can now interact email and everything else I do, uh, you know, fan engagement, team engagement, player engagement, all in whatever language, whatever culture, instantaneously.

So that's gonna be, you know, the next big thing is being able to create hyper personalized relationships with that 99% that'll never step foot in your arena.

Now, the good thing about that, obviously, is it keys right into the NBA strong suit, which is sharing best practices.

There's not a better league in the world at sharing best practices than under Adam Silver.

We know that.

Uh, and so, but that's basically fan experience.

Are we concerned about the Chinese wall or the competitive advantage relative to on-course metrics if some people can figure out how to use AI better than others, or just as a call for some teams to join the other teams and get smart about it?

Well, look, the key is the content creation, right?

The the content creators hold all the cards.

Uh, everything else is AI gymnastics, but the key is what's coming out of the content.

That's, you know, you know, your players on and off the court, that's the game action, uh, obviously all-star playoffs, uh, you know, your uh your your sponsor interactions, those kind of things.

Uh, so the content creators are the ones driving the action.

Uh, you know, the AI providers will be the ones, you know, kind of maybe shaping that relationship with the fan base.

Uh, but at the end of the day, content is king, and pro sports, you know, has two massive advantages.

A, there's a fire hose of content.

Right?

20 games a night, uh, between, uh, you know, whatever games are going on, you know, hockey and basketball during the winter, baseball in the summer, football in the, in the fall.

So there's always something going on, and that's just those four majors, obviously, tons of other content.

Uh, and then there's, you know, great player interaction and, and so there you have the fire hose of live content.

Number 2 is that, uh, the game needs to, you know, it, it's power is that it's live, right?

It's not a sitcom, which I can watch at any time.

Uh, so the, the, the value in the sponsor engagements is because of its, you know, the, the live nature, and I think that's why more and more money is going out of, you know, some of these other vehicles, you know, streaming movies or, uh, you know, TV shows into live sports, because again, that's the one place you pretty much watch the commercials.

Yeah, and, and, uh, you know, your experience with Syracuse is first rate, obviously from the opinion leader perspective, Syracuse UNLV have created some kind of a little rivalry off of CCAN and otherwise.

C a tremendous event last year, even bigger this year.

Excited about it?

I am, uh, to get into the, you know, obviously sports entertainment and innovation, uh, the innovation part is something that, uh, I, I'm just very excited to be a part of, uh, you know, being on the kind of the leading edge of where things are going.

Uh, as I mentioned, you know, many players go on the, you know, the coaching side because they know the game, right, and know how to coach.

I, I was very intrigued on the business side, near the end of my career, I was in the, uh, I did a lot of collective bargaining, uh, with one of the lead player negotiators and got deep into the league's business through that collective bargaining experience, and was very intrigued by that.

So I stayed on the business side.

I ran the retired players association, did work for an economics firm doing kind of what I do now, but economics projects, that's, you know, team valuations back then, variable and dynamic ticket pricing, uh, etc. some other uh other things as well, uh, in all the pro leagues.

And so, you're now being on the technology. being able to really drive both the next level of of fan engagement, but obviously the endgame is to generate revenue for for teams and leagues, and as well as you're just tremendous experiences for the fans.

And that's, you know, that's that, you know, that great um Uh, that great value, uh, proposition, right?

The teams, you know, generate great content, the fans get super engaged and energized by it, and then they monetize that.

And that's how I think just a, a perfect relationship that's, uh, that, that brings that excitement.

And frankly, the world should use some excitement right now, right?

Yeah, we, we, we, we totally agree.

Your mouth to God's ears.

Uh one more question.

So in the 70s after law school, tried to figure out A way to get involved in sports business and I found out the only way you were called an agent or sports lawyer is that you found some athlete that would call you that.

Now there are 473 sports law, marketing, administrative, uh, business courses.

Uh, would you opt for the good old days where you created your own blazer on trail or today where everything is really defined, but there's a lot more competition?

Well, the trough is massive, that feeds the pro sports world, as you mentioned earlier.

And so on the one hand, there's a lot more established things to do, like to plug into, especially if you're starting out, uh, so you can learn, get established, make contacts, network, uh, but the, I mean, you know, but the, the world is unlimited, and the sports world is unlimited as far as what the potential is and And now the, you know, the way that growth is happening, using these new technologies in so many ways, you know, fan engagement obviously is one, you know, building new revenue models for teams, uh, corporate efficiency, uh, you know, analytics, you know, you know, between game, uh, you know, we, the league now, as you know, is broadcasting in full 3D, uh, due to some of the technologies where they're, you know, using, you know, You know dozens of cameras to capture all the movement on the court, and then, you know, create that, uh, you know, 3D virtual reality version of that mixed reality where you can actually, uh, working on a project to train referees by taking that content, and referees can wear a set of glasses and, and be on a court with full holographic players so they can learn the game, uh, you know, using that type of technology.

So there's so many interesting ways where, uh, you know, there's Where technology is going to drive innovation.

So there's really no limit to how much innovation there is, but again, now with that trough being so big, there's, it's great for young people to come in and have so many places to learn the business.

Wonderful talk.

01 more question.

So you and your dad straight up universal bragging rights, perpetual universal referees, nobody in favor of one of you who wins, one on one.

Uh, well, I was much more physical as a player, and, uh, so, uh, you know, you know, but he had the range, you know, so I think it'd be a great matchup.

Uh, was what was very interesting though, he played in his era 1,0059 games, uh, which was a record at the time, because, you know, in his era, there weren't long careers cause there wasn't enough money to play forever.

So the day of my 10060th game, naturally I called him and said, hey dad, it's good.

I'm playing my 10060th game today.

And he had a big chuckle, but I have to admit he was mad, but he got over it.

So, I'm sure he got over it.

Look, the bottom line is the sport and the business is fantastic because you were both involved in his memory and you're taking it to the next step.

And what a political answer because the game changed.

You can't answer that question.

There are two different things.

Uh, Danny Shea is absolutely excited working with you.

Look forward to seeing you at CCon in just a couple of weeks.

Sports.

I'm excited to be there.

Come on out and say hello.

Sports Ricardo, speak with you soon.