- The Washington Times - Tuesday, March 10, 2009

NBA commissioner David Stern on Monday said the league is happy to be “treading water” financially during the economic recession, but he fears the 2009-10 season could be hard-hit as fans buy fewer season tickets and sponsors continue to struggle.

Stern said ticket sales this season have been flat and licensing business has dropped because many companies have suffered a decline in sales. But he said sponsorships were slightly up despite the economic difficulties faced by corporate America.

“Staying even is a great success in this economy,” Stern said Monday before a luncheon at George Washington University in honor of Wizards owner Abe Pollin. “We’ll actually be up a couple percent from last year. We’ll see a little bit of growth - nothing like we anticipated. We’re not guaranteeing it will continue next year, because nobody knows exactly what’s going to happen.”

The NBA was buoyed this season by the fact that most season-ticket sales and sponsorships were in place before the economy suffered a serious downturn last fall. The 2009-10 season will be the first to begin while the country is in a full-blown recession.

“It’s all under duress, and it will be that way going into next season,” Stern said. “We’re anticipating that things won’t [rebound]. We’re planning for that in terms of our activities, our approach, our belt-tightening. We have to make adjustments to our expenditures to make adjustments for the economy.”

The NBA laid off about 80 employees at the start of this season, but Stern said he hoped to avoid additional layoffs by keeping open positions unfilled. Despite the economic troubles, Stern said he does not believe any teams are in dire financial straits, though several - including the Sacramento Kings and Memphis Grizzlies - reportedly expect to lose millions of dollars this season.

“We’ve been monitoring the situation, and our ownership position is quite strong,” he said. “There will be teams losing money, as there always are, but our owners advise us that they are all in quite strong shape to make any additional investments that are necessary.”

Looking forward, Stern dismissed recent suggestions that the league is heading toward a tense showdown with its players union, saying both sides recognize the challenges in the economy and that he is optimistic the parties will work something out.

Stern also addressed the NBA’s addition of $200 million to its credit facility, a move he said was a sign of strength because few banks have been lending large amounts of money. He disputed reports that the money was requested to cover team operating losses and said some teams likely will use the money to pay off other debt early.

“Somehow, this was construed as a terrible thing when, in fact, I had people calling us to say, ‘Can I buy a team so I can have access to some liquidity here? Because you’re the only people who can borrow,’ ” he said.

Stern said he was encouraged by the response to last month’s All-Star Game festivities, which drew strong television ratings. He said he expected ratings for the season, both locally and nationally, to rise more than 10 percent.

“There’s sort of a sense of well-being about the game itself,” he said, “but you’d have to be overly optimistic to say we’re not going to be impacted by [the economy] - because that’s just not the case.”

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