(FORTUNE Magazine) – David Stern, his tie loosened and askew over a crisp white shirt, is sitting by a picture window in a conference room at the National Basketball Association's Fifth Avenue headquarters. Outside, snow whips around a pizza-sized DirecTV satellite dish. It's connected to a television in the room, which is tuned to an ambitious new digital network called NBA.com TV. Which, in turn, is connected to the future of the NBA.

You have to feel a little sorry for Stern, the league's respected, 57-year-old commissioner. He has had to guide the NBA through the retirement of its most famous superstar not once, but twice. Michael Jordan is two seasons into his second retirement, and this time it looks as though he really means it. None of today's elite players have moved out of the pack to fill the void left by Jordan, and the league is still stinging a bit from the effects of an owners' lockout that canceled 464 games last season. Nearing the halfway point of the current season, average attendance is down almost 2% from last year's already depressed lockout level. Television ratings for NBA games have sunk to levels not seen since Jordan led the Bulls to their first title in 1991. And gross retail sales of NBA-licensed products have plummeted more than 50% since 1995, down to $1 billion in 1999, according to a recent report. That's less than Nascar sold in licensed goods last year.

The figures don't reflect apocalypse, but they do suggest that the NBA has lost its casual fans--those peripheral supporters who stopped channel-surfing long enough to watch Jordan whenever the Bulls games aired, flocked to the local arena when he was in town, and donned his familiar No. 23 jersey even if they couldn't tell a pick-and-roll from a jellyroll. Those people are now finding other places to spend their leisure time and their entertainment dollars. And they're finding other sports to watch. "Look at Tiger Woods in golf," says Neal Pilson, the former head of CBS Sports who now runs a sports-consulting firm in Chappaqua, N.Y. "People who wouldn't normally watch a golf tournament are watching. My wife says to me, 'If Tiger Woods is on the leader board, you let me know, because I'm watching.' Jordan did that for the NBA. I'm not one who thinks the NBA is in some sort of jeopardy, but it has some serious issues it has to address."

Stern is trying to do just that, and his first shot is NBA.com TV, which launched in November. Think NBA meets MTV meets WebTV. Stern's dot-com vision is to make pro basketball accessible to fans worldwide through their televisions, computers, wireless phones, handheld computers, or whatever Internet devices roll out in the future. "Whether the fight to get into the home is ultimately won by DSL or cable modem or wireless, the issue is content," says Stern. "We think we have content."

Stern thinks this content is something not just fans but also Wall Street will crave: He is having discussions with the investment bank Chase H&Q about taking part of the NBA public. The new entity could include not only the league's Internet assets--NBA.com, a digitized library of games, and NBA.com TV--but perhaps all of NBA Entertainment, which includes consumer products, licensing, global TV distribution, home video, videogames, and publishing.

The strategy may be yet another version of the bedrock business idea of the 21st century: Go digital and go public--but wait a minute. Interactive basketball? Are people really going to pay to sip a beer and watch a game on their Palm XII? Well, maybe. Think of it this way: Would you want to bet against David Stern?

Stern, who became commissioner in 1984, essentially saved the NBA. The first cable contract he negotiated for the league, as a rookie general counsel in 1979, was for $500,000 a year; today the NBA contract is worth $223 million. When he took over the league, cities didn't care whether their teams lived or died; now an NBA franchise is a civic crown jewel. "NBA basketball is the most widely distributed product in the world," Stern contends. "It's sold to somewhere in excess of 200 countries. Some of the great brands--AT&T, IBM, Coke, McDonald's, American Express, Anheuser-Busch, Schick, Nestle--have chosen to associate themselves with us."

Stern's new marketing vehicle, NBA.com TV, is actually a cable channel with interactive, broadband ambitions. Right now it looks like Bloomberg Television with a basketball jones. The screen is a frenetic puzzle of frames filled with images and data. The most prominent frame is filled by a live anchor chattering about the night's games, highlights of recent games, or perhaps classic footage from the league's vast archive. The frame alongside contains the latest scores, updated in near real time. A promotional banner sits at the top of the screen, while two ticker-tape bars of hot stats and news scroll across the bottom. It's a basketball junkie's dream, though it's available only to DirecTV subscribers (of which there are about 5.6 million) and on some digital cable systems.

For now, NBA.com TV is pretty low tech. Fans can't choose which information they receive when they tune in. That's still up to the TV heads at NBA.com TV's headquarters in Secaucus, N.J., just across the river from Manhattan. But that will change in a broadband world. Portions of every game this season have been digitized and stored, making it easy to put video clips on the Web. Next year the league will start digitizing its entire library of games--55 years' worth. In time, wired viewers will be able to request their own highlight reels. Say you want to see every Allan Houston shot from last night's game or every Vince Carter dunk over the past week. No problem. Just enter your order, then watch it on whatever gizmo is clipped to your belt. In Stern's dreams, the NBA's future fans will be dedicated point-and-clickers. "Younger consumers aren't interested in consuming 2 1/2-hour blocks of programming," says Adam Silver, 37, who as head of NBA Entertainment oversees all of the league's business operations, including technology. "Everything we're doing and will be able to do in digital media is designed to attract fans with a more limited attention span."

Stern's strategy has been an easy sell to his bosses, the owners. No wonder. A lot of them are already tech heads. Microsoft co-founder Paul Allen has owned the Portland Trail Blazers since 1988. In January, Broadcast.com billionaire Mark Cuban paid $280 million for the Dallas Mavericks. And Ted Leonsis, president of America Online Interactive Properties, owns a significant stake in the Wizards.

Cuban isn't wasting any time bringing his own passion for technology to the game. He's talking about putting monitors with Internet access in front of each Maverick fan's seat. Fans would have their own ID cards, which would allow them to purchase their favorite player's jersey, highlight video, CD...you get the idea. "Michael Finley has a thundering dunk," predicts Cuban. "And up comes: Would you like to see a replay, yes, no? Would you like to e-mail this to your home? E-mail it to a friend? Capture this on your personal video recorder? Each has a little charge associated with it. In the digital world, bits are bits."

Stern has larger ambitions for NBA.com TV: He wants it to become a revenue-generating missionary, preaching the game's gospel--past and present--24 hours a day. Already the NBA sells about ten hours of games and other programming each week in 202 countries outside the U.S. The foreign satellite and cable companies that air NBA programming get to pocket the advertising dollars generated locally. Stern wants those companies to buy an international version of NBA.com TV that will air 24 hours and offer five hours of live games.

In that scenario the league essentially becomes an international broadcast network. Why not do the same in the U.S.? Right now the NBA gets $660 million in annual broadcast and cable rights fees domestically. In a broadband future the league could conceivably televise its own games on NBA.com TV and keep the ad dollars for itself, rather than sell the rights to broadcasters. "Essentially NBA.com TV is a very, very glorified pay-per-view concept," says Mel Poole, president of SponsorLogic in Charlotte, N.C., a sports marketing firm. "It allows Stern to outflank whatever broadcasters decide to do. The danger is that he'll lose that casual Saturday afternoon couch potato."

Many of those sedentary fans have already moved on, and it's not certain that Stern's digital and broadband fantasies will bring them back. Will high-tech wizardry boost attendance at Clipper games or get kids out of their Jeff Gordon jackets and into a Kevin Garnett jersey? Not even one of the NBA's brightest stars is sure. "It seems like the league has plateaued," says Detroit Pistons All-Star Grant Hill, drawing a line in the air with one hand. "It will go up and down over time, but I don't think it will ever get back up to the level it was at."

Stern doesn't see it that way at all, of course. He blames the figures showing a decline in gross retail sales, for instance, on external factors. "Certain of our licensees were [only] interested [in] their quarterly reports," Stern insists. "They developed products on a short-term time frame for short-term tastes, and they sold it in the widest number of venues. That isn't necessarily a good brand-building exercise." In response the NBA will cut ties with recalcitrant licensees and produce more of its own products. Those products will be sold, of course, on the league's Website or at its own retail outlets. Or, in time, on NBA.com TV.

Even if we allow the league a post-Jordan hiccup and say recent declines in attendance and ratings are only transitory, none of Stern's moves address what may be the NBA's biggest problem: the lack of a transcendent superstar. "We've got plenty of stars now," says Magic Johnson. "But it's the superstars who attract fans and people."

The league can only blame itself for making the superstars, not the teams, its primary product. Back in the 1980s, when several franchises were near economic extinction, the league built its marketing strategy around guys like Larry Bird, Magic, Isiah Thomas, Charles Barkley, Hakeem Olajuwon, and Patrick Ewing, who were popular beyond their local turf. Who cares how the Philadelphia 76ers did last night; did Barkley break a backboard? Those players, and others like them, ignited the NBA's first major growth spurts--in attendance, television ratings, and retail sales. Then came Jordan.

He steered the NBA on an unprecedented joyride. Attendance soared 88% during his playing days; television ratings during the finals rose 39%; and retailers couldn't stock enough Jordan stuff. Two years ago FORTUNE estimated, conservatively, that Jordan pumped more than $10 billion into the U.S. economy during his career. Jordan still has an outsized influence in basketball, of course--when he announced his intention to buy a stake in the Washington Wizards, 4,000 more fans than usual showed up for their next game--but let's face it, now he's just another business executive.

Stern never crafted a plan specifically for a time when Jordan would be gone. "I didn't have a Jordan policy," he says. "Why should I have a post-Jordan policy?" But couldn't Stern the master marketer have found some elixir that would have prevented a Jordanless headache? The issue was certainly brought up within the NBA's offices. "It was the ultimate denial," says one former NBA executive. "Here's one of the most valuable assets in the world of sports. You know you have a year left with him, and what do you do about it? The answer is nothing."

Stern readily admits it. The league, he says, constantly regenerates itself with each year's draft. One of those rookies--whether he lives up to Jordan or not--is sure to turn into a superstar. If only because the sports media demand it. "Whether it's ESPN, ESPN2, CNN/SI, Fox Sports...there's an industry out there that raises the issue of whether sports leagues can do nothing and just be taken along for the ride," says Stern. "We happen to think that being a rudder and adding a little power of your own makes the ship go that much faster."

This time Stern will be powering the NBA with technology, not marketing. Which brings us back to NBA.com TV. It's not yet ready to live up to its broadband name, but then, few of Stern's players are ready to be superstars. Maybe by the time NBA.com and NBA.com TV merge, the next Jordan will have arrived. If Stern's right, we'll be glued to our cell phones cheering.