Despite near universal objection to the NBA’s one percent integrity fee, commissioner Adam Silver has said the fee, “call it a royalty”, is necessary to protect the league’s “intellectual property.”
Speaking at the NBA’s union address, Silver defended the controversial fee, pointing to other jurisdictions that have used the same model to compensate sports leagues for the use of their IP – but added that the NBA would be open to discussion.
“From the NBA’s standpoint, we will spend this year roughly $7.5 bil- lion creating this content, creating these games,” Silver said. “This notion that as the intellectual property creators that we should receive a one percent fee, seems very fair to me.”
Critics have argued that as a one percent fee on wagers, before book- makers have paid out winnings, amounts to around 20 percent of revenues, licensed bookmakers would struggle to operate effectively against the black market. Furthermore, it’s hard to see what would be left over for the states to collect in taxes..
In both cases, the benefits of regulation could be lost – and the original goal of “protecting the integrity of the underlying competitions” undermined.
Silver however, disputed the “math”, adding that the league had created what “a model bill would look like.”
“In that model bill is a one percent fee, call it integrity fee, call it a royalty to the league.”
“Having said that,” he went on, “we are happy to sit with legislators and look at the economics and talk about what is the best system.”