The partnership between the NBA, Disney and Turner goes beyond a television deal.
Disney-owned ESPN will join four Chinese firms in “[investing] in an 11 percent stake in the National Basketball Association?s subsidiary in China“, reports the New York Times. ESPN itself will have a 5% stake in the new league.
The four Chinese companies joining Disney are Bank of China Group Investment, Legend Holdings Limited, Li Ka Shing Foundation and China Merchants Investments. All told, the “outside investors will pay about $250 million.”
The investment of a corporate giant such as Disney into NBA China speaks to the potential the NBA has in the communist country. According to NYT, “nearly a third of the traffic to NBA.com comes to the Mandarin Chinese side of the site“, and the NBA itself estimates that 300 million people — equal to the entire population of the United States — play basketball in China.
NBA Commissioner David Stern explained that the “expertise, resources and shared vision of these immensely successful companies will help us to achieve the potential we see in the region,” and the investment from the companies will help the league work with the Chinese Basketball Association and the General Administration of Sports.
Meanwhile, the NBA and Turner are expected to come to an agreement that would see Turner, which broadcasts NBA games via TNT, run NBA TV and NBA.com. The NBA would be the “biggest deal to date” for Turner Sports New Media, which operates NASCAR.com and PGA.com; Business Week reports NBA.com generates “nearly twice the traffic” of NASCAR.com.
For over a year, there has been speculation Turner would run NBA.com and NBA TV. Early talk had the league selling both properties, as well as NBA League Pass, to Turner, though Commissioner David Stern dismissed that late last year. In an interview with Mediaweek, Stern spoke of a “joint venture where the ownership of the assets would remain with [the NBA], but [a partner] would be responsible for operating them and they would share in the profits based on various benchmarks.”
Such a deal would resemble the arrangements Turner has with NASCAR and the PGA. “If the deal mirrors the ones with the PGA and Nascar,” writes Business Week, “Turner would earn a fee for managing both properties and split ad revenues with the NBA.”
In other NBA/new media news, the Sports Business Journal reports the NBA Board of Governors will consider a plan that would allow the league’s 30 teams to “sell local digital rights that are not included in the league?s media deal with Turner and ESPN.” The NBA would become the first major sports league to “free up broadband and wireless agreements that, in the past, have been controlled at the league level.” The plan would have to be approved by the owners, though SBJ reports “the proposal already carries strong support.”
