The National Basketball Association (NBA) expanded its agreement with Chinese Internet company Tencent Holdings Ltd (騰訊) to increase the league’s presence in the world’s most populous country.
The deal is valued at about US$700 million, according to a person with direct knowledge of the matter.
The five-year agreement, which takes effect on July 1, creates the largest international digital partnership for the NBA, the first US sports league to open a business office in China and the first to play there.
The extension also makes Tencent, which market research firm Millward Brown called the “most valuable Chinese brand,” the exclusive digital partner of the NBA in the country of 1.35 billion people.
That gives Tencent popular programming that will draw advertisements and boost revenue, said Ashley Sheng, a Shanghai-based analyst at SWS Research Co.
“Content has been increasingly important for Internet companies nowadays, especially for Tencent,” Sheng said. “We believe Tencent’s next growth driver is online ads from both PC and mobile.”
The pact follows Tencent’s agreement last month to distribute Sony Music Entertainment songs from artists including Beyonce Knowles. Last year, it also reached distribution deals with Warner Music Group Corp, Fox International Channels, YG Entertainment Inc and HBO.
“NBA fans in China are among the most passionate and knowledgeable basketball fans in the world,” NBA commissioner Adam Silver said in a statement. “Tencent is one of the most innovative, leading brands in China, and their extensive reach will give our fans unparalleled access to the league and its teams.”
Hundreds of millions of people communicate everyday on Tencent platforms, which include the WeChat and QQ messaging programs and online gaming.
The Shenzhen-based company was the largest Internet company in Asia by market value until Alibaba Group Holding Ltd (阿里巴巴) US$25 billion initial public offering in September last year.
Tencent, which declined to comment on the deal valuation, will carry a record number of live NBA games and original NBA programming under the expanded agreement. That includes regular-season contests as well as the playoffs, NBA Finals, draft and All-Star Game.
The NBA and Tencent will also co-manage the league’s digital assets in China, including its Chinese Web site and the sites for all 30 teams.
Basketball is the most popular team sport in China, with more than 300 million participants, according to the NBA.
“The NBA represents both a widely followed sport and an active healthy way of life in China,” Tencent president Martin Lau (劉熾平) said in the statement. “This multiyear agreement enables us to bring substantially more NBA games and content to consumers than has even been available in the past, and we look forward to working with the NBA league, teams and players to further enhance the sport’s profile and popularity.”
Under the expanded partnership, the NBA and Tencent will make the first-ever NBA League Pass offering in China, giving fans access to full season of live and on-demand games.
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