NBA Extends Agreement With Tencent Until 2025
July 29, 2019
Chinese Internet giant Tencent has signed a five-year (2020-2025) extension to its existing deal (2015-2020) with NBA as the exclusive official digital partner in China, multiple sources have confirmed to Lanxiong Sports.
The new deal is approximately worth $1.5 billion, which is 3 times as the previous contract, said sources briefed on the details of the agreement.
The negotiation between Tencent and NBA started from last year but no final agreements were reached within the exclusive negotiation window period, which ended in April 2019. Then Alibaba, another Chinese Internet giant, came into the battlefield to compete for the exclusive NBA media rights.
Lanxiong Sports learned that NBA China submitted the two scenarios offered by Tencent and Alibaba to the NBA last week, and NBA called a conference immediately for this issue. Both Chinese companies offered a similar amount of money in order to land the deal. A few days later, NBA commissioner, Adam Silver, eventually selected their former partner Tencent.
Besides, Lanxiong Sports has also learned that in the extension negotiations, Tencent previously hopes to get the whole exclusive rights of digital media in the next five-year cycle, which means that Tencent is the only partner on all kinds of digital media distribution channels, such as PC, mobile, social media, OTT and mobile news aggregation platform. By investing billions of dollars on NBA media rights, Tencent naturally want to concentrate all the NBA video resources to its own channels without any diversion, to maximize the revenue scale of paid users.
At present, the only question up in the air is whether NBA can persuade Tencent to abandon the rights of short videos, NBA League Pass, IPTV, etc, which were previously acquired by several Chinese media platforms like Bytedance, BestTV, Weibo, etc. Apparently, NBA doesn’t want to see that all kinds of media rights are monopolized by only one company, which is contradict with their overall strategy to broaden the margin of audiences globally. However, if Tencent chooses to abandon those parts of rights above, sources told Lanxiong Sports, the price of the overall rights package will drop to $1.2 billion to $1.3 billion.
