The Star Behind NBA All-Stars -- Seattle's Rick Welts Has Midas Touch, Turning NBA Properties Into Gold

"You'll be prepared to answer such questions as . . . `What exactly does NBA executive Rick Welts do?'

" `Rick who?' you ask. Rick Welts - president of NBA Properties, instrumental in launching NBA All-Star Weekend and the league's corporate sponsorship program as well as much of its international business, former Seattle SuperSonics ball boy - that's who." - from print ad for Microsoft's "Complete NBA Basketball"

NEW YORK - The walls of his office are graced with autographed photos of Julius Erving, Larry Bird, Bill Russell and Spud Webb, plus an encased No. 40 SuperSonic jersey with his name stenciled on the back, a 40th birthday present. As best as he can approximate them, Rick Welts is nestled among the familiar comforts of his past. And from his vista on the 14th floor of the Olympic Tower building, he can peer down Manhattan's Fifth Avenue all the way, it sometimes seems, into the future.

That is, after all, where Welts has helped drag the National Basketball Association during the past decade. He sees and shapes this future with great skill. But also with so little fanfare, you'd hardly know that he has fashioned himself into one of the most influential people in professional sports.

Make no mistake, Welts is a powerful man. As president of NBA Properties, Inc., he is head of the marketing arm of the NBA, which is the engine of arguably the most spectacular sports success story of the 1990s.

Yet, have Welts stroll down Fifth Avenue in his own hometown and, unless he runs into Zollie Volchok, Les Habegger, Fred Brown or someone else associated with the Sonics' 1979 championship team, you'll watch him take a walk on the anonymous side of the street.

Seattle really couldn't be blamed for such a slight. Many across the country will be tuned next weekend to the NBA's annual midseason celebration, in Phoenix, but will be oblivious to its roots. The three-day convocation is really the league in a nutshell - its stars on center stage, its corporate sponsors well-serviced and its products in great demand.

And it's all basically Welts' show.

"He made the All-Star Weekend into, I think, the premier event in sports," NBA Commissioner David Stern says. "The three-point shot contest was his. I told him I thought it was the silliest idea I ever heard, but if he wanted to do it, go ahead. Now, I enjoy going around getting credit for it."

While Stern is going for a chuckle, he does hit upon the essence of Rick Welts. The graduate of Queen Anne High School and the University of Washington is the quintessential second-in-command whose behind-the-scenes work forms the perfect marriage with Stern's more up-front creative flair. Together they've made beautiful music - and it goes something like, ka-ching, ka-ching, ka-ching.

In 1982, when Welts signed on with Stern, then the incoming commissioner, the NBA still was the "drug league." Its domestic licensing revenue was a laughable $10 million. It was just entering into a television contract with CBS worth $88 million over four years. Last year, the NBA did $2.5 billion in domestic licensing revenue, and another $350-plus million internationally. It now is in the first year of four-year contracts with NBC and Turner Broadcasting worth at least a combined $1.1 billion.

And they're really just scratching the surface.

Overseas travelers are increasingly struck by the sight of Orlando Magic gear in Munich or Shawn Kemp jerseys in Tokyo. Sparked by the Dream Team experience in 1992, the NBA is better poised than any other U.S. professional sports league to make a major move in the international marketplace. Outside of quadrennial super-events such as the Olympics and World Cup, the NBA is the largest provider of sports programming worldwide, with its games and highlights being beamed to 140 countries, from Abu Dhabi to Venezuela.

Today, the sun never sets on the NBA. The league has people stationed in Geneva, Melbourne, Tokyo, Hong Kong and Mexico City. It just opened its Latin American headquarters in Miami.

Barcelona Games significant

And, yes, all that essentially is Welts' show, too.

"All 325 of the best players in the world all play in the same league," Welts says. "That's unheard of in any other sports market. That makes our opportunity even more unique. When you write about the history of the sport in 20 years, you'll look back and say the Olympics in Barcelona was the most significant single event in the history of the sport.

"I'm an American, and I knew what the Olympics were all about when I was growing up. It was our country vs. your country, and it's good when our country wins. I don't think we fully understood that, outside the United States, the Olympics represent this idea that you could enjoy excellence in athletics whether or not your country is standing on the gold-medal platform when it's all over.

"That's why this team - maybe the best team ever assembled in any sport - really captured the world. Countries that never gave any attention to basketball were captivated by it."

Now that Michael, Magic and Bird, et. al., have got the world's attention, Welts' job is to increase it. If Welts succeeds in leading the NBA to global domination, he will be something of a velvet Napoleon. A rarity in business, much less sport, he has left no trail of carnage on his way to the top. Rather, Welts has seized upon opportunities made available because, well, he's so well-liked.

Everyone treated with respect

Know the saying about nice guys finishing last?

"Rick's proven that theory doesn't hold," says Dave Watkins, a former Sonic official and mentor of Welts.

Welts last summer was the "maid of honor" at the wedding of his sister, Nancy, who says, "I can't remember Ricky doing anything bad to me as a brother. He was 14 before he asked my mother if he didn't have to take me to the movies every Saturday. . . . When he went to the NBA, there was some concern that Rick was not going to be tough enough. That hasn't been a problem. It seems that people find his style refreshing."

At NBA Properties, Welts, like his boss Stern, commands staunch loyalty because he treats everyone respectfully, from his chief lieutenants down to the summer interns. Often the first to arrive and the last to leave, his work ethic is well-known around NBA headquarters.

Welts, 42, has a disarming and self-effacing sincerity about him that has served the NBA well in developing its few but rich and long-term corporate ties. A slick salesman may sell his product once. A truly great one makes a customer for life.

"He's a salesman, but he's not a salesman," says Bob Walsh, for whom Welts worked before enlisting with Stern and the NBA. "He sells and you don't know why you bought it. You bought it because of him."

Started in public relations

Rick Welts always has been best at selling Rick Welts.

In 1969, a friend was giving up his job as a Sonic ball boy and encouraged Welts to apply. Because of a letter he wrote to then-trainer Jack Curran, Welts got the job. A few years later, he was promoted to assistant trainer, and while he went to the University of Washington determined to become an investigative broadcast journalist, he worked as an assistant to Watkins, then the Sonic public-relations director.

It wasn't long before Welts had a new goal in life.

"I wanted to be a p.r. director, and Dave Watkins was my hero," Welts says. "He was creative, understood advertising in ways that I didn't, was a great dresser and had a cool car. I could never imagine having a more amazing job than that."

Though Welts would eventually get his shot, in the meantime he became increasingly interested in the business side of the Sonic franchise. Under Volchok, whose background was in vaudeville, the franchise had a flamboyance decades ahead of its time. The Sonics were big on entertainment and live music and routinely tapped into Walsh's Hollywood connections to lure name performers.

When Welts finally got his dream job as public-relations director in 1977, he couldn't have asked for a better run. His first year, the Sonics made it to the NBA Finals. The next season, they won the title.

After the title year, Welts left to join Walsh's sports marketing and promotion firm. And the Sonics were crushed.

"I knew he was ready for something bigger, but it was like losing your star player," Watkins says.

Stern beckons

Walsh would have the same type of feelings when the NBA snatched Welts away three years later.

"It killed me when he left me," Walsh says. "I thought I'd have to shut down my office."

Not long before Welts left for the NBA in 1982, he'd been the point man in Walsh's efforts to land an expansion franchise in Vancouver, B.C. The NBA, in fact, had agreed in principle to award a team to real-estate magnate Nelson Skalbania for $16 million. Because of financing, Skalbania later withdrew his application.

Welts' role in the Skalbania episode made an impression on Stern, then a deputy commission to Larry O'Brien. Out of the blue, Stern one day left a message on Welts' answering machine. Stern was to succeed O'Brien in 1983 and was searching for young, ambitious people who would "work for nothing" and dedicate themselves to the resurrection of the NBA.

"David Stern cast a spell over me," Welts says. "He really made me believe the NBA could be in this country what the Sonics were in Seattle."

Innovations prove lucrative

At the time, Welts was the 35th employee of the Stern regime and the sixth of the then-fledgling NBA Properties, Inc. As illustration of how good Stern was on his word, the NBA now employs 525, with 175 working for the Properties division alone.

And it needs every one. Created in 1982, NBA Properties, Inc., has a wide mandate. Among other things, it creates and sells sponsorships, develops licensed consumer goods, builds international interest in the sport, and coordinates entertainment and game operations at NBA events.

Under Welts, NBA Properties has been lucrative and innovative at almost every turn.

Employing the old supply-and-demand trick, for example, the league has made its sponsorships and licenses more valuable (and serviceable) by limiting their numbers. The NBA has 17 corporate sponsors as well as Nike and Reebok, who are considered marketing partners. The NFL, in contrast, has 37 national sponsors and 30 "packaged goods" sponsors. The NBA has about 150 licensees for consumer products, while Major League Baseball has about 400.

And part of the beauty is that corporations, in using the NBA in their advertising, essentially pay the league for the rights to promote the league - McDonald's Dream Team cups, for example.

The sponsorships also came in handy when the NBA negotiated its $750 million deal with NBC. In offering broadcast rights for bids, the NBA sold some of the advertising and included it in the package, thus guaranteeing revenue for the network. Making it a true partnership, the NBA shares all financial information with NBC and splits any broadcast revenue over the $750 million. The league also has a revenue-sharing agreement with Turner Broadcasting.

Events attract sponsors

Some of what now makes the NBA such an attractive buy has its roots in the old days when Welts, in charge of firing up the league's sponsorship program, couldn't get many companies to let him in the door. Welts had much to gain, but little to lose, by pushing the envelope of creativity.

While preparing for the 1984 NBA All-Star Game in Denver, Welts attended major-league baseball's Crackerjacks Old-timers Game. A light bulb went off.

"Watching that, I thought people like to sponsor events," Welts recalls, "but we didn't really have any events to sponsor."

Out of that came the Legends Classic, which was sold to Schick. With it, Welts had planted the seeds for the NBA's All-Star Saturday, the first of which was officially held in Welts' Seattle in 1987.

Still poking around for another event in 1984, Welts one day was having a drink at New York's Waldorf Hotel with then-Nuggets General Manager Carl Scheer. They got to talking about the famous 1976 ABA dunk contest, won by Julius Erving's even-more-famous foul-line takeoff slam. Soon, the NBA had the Slam Dunk Contest, sold to Gatorade.

In 1986, the Long Distance Shootout was added and sold to AT&T. Last year, the Legends Classic, plagued by major injuries to aged participants, was replaced by the Rookie Game.

On to new frontiers

With firm footing domestically, the NBA has pushed beyond U.S. boundaries. The league already has played exhibition games in Europe and Mexico and, twice staging contests in Japan, was the first American professional sports league to play regular-season games outside the U.S. and Canada. Two Canadian teams - Vancouver, without Skalbania, and Toronto - will join the league next season.

Western Europe is being won over the fastest, but Asia probably will be the most worthwhile long-term opportunity. If the NBA is to sign on an international sponsor based outside of the U.S., which is one of Welts' goals, it'll likely be based in Japan, Welts believes. The NBA also is close to announcing a major venture involving China.

Though the NBA is years ahead of baseball and pro football around the globe, Welts sometimes feels the league isn't aggressive enough. The NBA, after all, is not one corporation with one vision, but a conglomeration of 27 franchises often with 27 agendas.

"Sports leagues are funny animals," Welts says. "They aren't particularly entrepreneurial. We (the NBA) are as entrepreneurial as a sports league can be, but in some ways we're not like a real business. If a real business had the opportunity that we believe we have internationally, it would invest a huge amount of money - and be prepared to lose a lot of money - to build the business.

"We don't do that because we represent the teams. I get to keep my job if, at the end of every year, we can return more revenue to the owners than we did the year before. Whatever investment or building we do has to be within that context."

Many seek services

It's difficult to imagine Welts not spearheading such efforts until well into the future.

There have been some rumblings, in fact, that Welts could eventually succeed Stern as commissioner. Welts virtually dismisses such talk. In any case, nobody expects Stern to move on anytime soon.

As long as Stern stays, it's reasonable to assume that Welts will be by his side.

When the expansion Toronto Raptors put a full-court press on Welts last summer, Stern supposedly stepped in with a new contract. Welts probably stayed on, others say, more out of his loyalty to Stern and their evolving vision of the global NBA than for a better deal. After all, when Stern once offered a bonus of an automobile, Welts declined, saying he preferred a membership in a health club.

Deflecting an inquiry on the Raptors' courtship of Welts, Stern says, "Over the years, we have lost count of the number of organizations that have sought to win his services."

Those close to Welts say his dream post, under the right circumstances, would be running the Sonics. Welts, however, won't be that specific, saying only that he'd like to ride the emotional roller coaster once again.

"Every morning I wake up and come into the office, in effect, we've won half our games and lost half our games last night," he says. "If they all got played, and all got played well, then we had a good night.

"But there's nothing like being part of a championship team. There's nothing like winning and losing - putting all the work you've done out on the floor and seeing how it does in front of the world."

It's a job for which Rick Welts is eminently qualified.

NBA LICENSING REVENUE ----------------------------------------------

Gross retail sales of consumer products featuring the NBA logo, NBA team logos, special-event logos and NBA player likenesses:

YEAR DOMESTIC INTERNATIONAL

1981-82 $10 million . 1982-83 $28 million . 1983-84 $44 million . 1984-85 $68 million . 1985-86 $107 million . 1986-87 $173 million . 1987-88 $300 million $10 million. 1988-89 $525 million $16 million. 1989-90 $750 million $29 million. 1990-91 $1.0 billion $56 million. 1991-92 $1.4 billion $128 million. 1992-93 $2.1 billion $250 million. 1993-94 $2.5 billion $350 million.