The Murdoch going big on India’s favourite sport

This year’s NBA Finals, which concluded on Thursday with the Golden State Warriors’ fourth championship since 2015, have treated us to a bevy of spectacular performances. I watched Games 3 and 4 from TD Garden in Boston, including ironclad defence by the Celtics’ Big Three and a 43-point masterclass by Stephen Curry of the Warriors. With the Dubs victory now in hand, the series ultimately delivered on a matchup of the league’s 20th century dynasty Celtics with the 21st century titans in the Warriors.

Off the court, the action is just heating up. The NBA will be the next major professional league to negotiate a media rights package, with their current deal with Disney and Turner Sports expiring in the 2024-2025 season. There are whispers of potential franchise sales, and a vague promise of expansion teams somewhere in the future. More on this below, but first, our esteemed media-cum-cricket correspondent Anna Nicolaou has the download from James Murdoch’s ambitions in sport. Do read on — Sara Germano, US sports business correspondent

Why James Murdoch is going big on India’s favourite sport

James Murdoch was always the rebellious one in the family. After dropping out of Harvard, he started a hip hop record label located next to a porn shop in New York’s Tribeca — a tale that would help inspire the pugnacious Kendall Roy character in Succession.

Later on in his 20s, while his older brother Lachlan worked on Fox’s Hollywood movie studio, James moved to Hong Kong to try to revive Star, the Asian television group that had been losing money since his father Rupert acquired it in 1993. James would find his footing there, helping build Star into one of India’s top broadcasters and triggering a long-term interest in the country.

That path came full circle this week as the younger Murdoch son, having stepped away from his father’s business and reunited with his old business partner Uday Shankar, snagged the coveted media rights for Indian Premier League cricket matches. Murdoch and Shankar’s new company, Bodhi Tree, was part of the winning $3bn bid for the rights to stream IPL matches from 2023 to 2027.

It is James’s biggest bet since separating himself from his father’s business. He and Shankar, who helped build the Murdochs’ Star empire, want to recreate their magic and build a new streaming service in India. The IPL is “the rocket”. 

“In order to build that platform, you need a rocket, so to speak. The IPL is an extremely powerful asset”, Shankar told Scoreboard.

“Bodhi Tree was set up with the belief that the digital explosion in India is going to transform a range of consumer services”, Shankar says. “It’s on this hypothesis that James and I came together. Winning the digital IPL rights is right at the core of it”. 

Since Rupert Murdoch broke up his media empire in 2019, James has charted his own course. Rupert’s six children each received up to $2bn from the sale of his entertainment businesses to Disney, and James Murdoch has used this windfall to invest in companies including Vice Media, a comic book publisher and start-ups aimed at combating fake news.

But cricket is James’s biggest financial move. Murdoch and Shankar made their bid as part of Viacom18, a broadcasting joint venture run by tycoon Mukesh Ambani’s Reliance Industries. Bodhi, backed by funding from Qatar’s sovereign wealth fund, recently bought a 40 per cent stake in Viacom18 for $1.5bn.

With this auction, in which companies splashed out more than $6bn for five year airing rights, the IPL has become one of the most valuable sports tournaments globally.

“When people look at these numbers in isolation, they look staggering . . .[But] the commitment on the IPL is a commitment on India”, Shankar says. “There is no media property that gets such a large congregation of Indians to come and watch for a period of two months . . . as the IPL.” 

Media rights, franchise sales, expansion: a busy to-do list for the NBA

The National Basketball Association crowned their 2022 champions in the Golden State Warriors on Thursday, but the league will have no shortage of activity off the court with the season wrapped up.

As of this week, the NBA moves to the top of the queue of professional sports with an expiring media rights package. Their current terms with Disney’s ESPN and Turner’s TNT concludes with the 2024-2025 season, though industry experts anticipate it will be negotiated before then.

At the same time, demand for ownership of the league’s clubs is hotting up. Earlier this month, Nike co-founder Phil Knight submitted an unsolicited bid for his hometown Portland Trailblazers, currently owned by the estate of the late Paul Allen. And there is the looming promise of expansion — creating a couple of new teams in yet-to-be-determined markets — that has some billionaire would-be investors salivating.

First, its media rights package is likely to rise in tandem with other recent deals. Last spring, the National Football League more than doubled its broadcast agreements’ value to more than $110bn over 11 years; this week, Apple reached its first leaguewide sports rights deal when it agreed to stream all Major League Soccer matches over the next decade, for at least $2.5bn.

Those trends are likely to continue even in the face of a darkening global economy, which we explore in our Saturday long read on the resilience of sports assets here.

“To whatever extent there are hungry distributors out there, demand for sports content is really strong. That’s undeniable”, said one investor who spoke with Scoreboard this week. The question instead, he said, is “how high can the ceiling go?”

As such, deciding on expansion of the NBA isn’t likely until such a new broadcast agreement is finalised between the league and its media distributors. Adam Silver, the NBA’s commissioner, said at the beginning of this year’s finals that “at some point, this league invariably will expand, but it’s not at this moment that we are discussing it”.

That hasn’t kept potential bidders from speculating about where such expansion franchises might arise: Seattle and Las Vegas are considered contenders. Asked about the potential for either or both of those cities to host new teams, Silver was coy and cited bona fides for the respective locales, including a new Seattle arena for the WNBA‘s Storm and a commitment to host the NBA’s Summer League in Sin City.

Edwin Draughan, vice president of boutique investment firm Park Lane, said a determination on the NBA’s media rights may well affect if and where additional franchises may come up for sale. “I do think there is some correlation to the market they end up going to. I would not be surprised if the NBA and their media partners are having at least preliminary discussions about it”, he said.

Highlights

• Russian and Belarusian tennis players will be allowed to play at the US Open, in stark contrast to the policy at Wimbledon. The US Tennis Association said the athletes can compete under a neutral flag. All England Lawn Tennis Club’s decision to bar Russians prompted the ATP and WTA professional tours to strip Wimbledon of its ranking points.

• Golfers offered uncomfortable answers when asked why they had joined the Saudi Arabia-backed LIV Golf series. The FT’s Robert Shrimsley points out that Western governments, including the UK and the US, are key trading partners for the Saudi state. “[A] reasonable answer for the Mickelsons, Johnsons and others is that they will put human rights above self-interest when they see some indication that their governments or sports are ready to do the same,” he writes.

• British-Iranian businessman Farhad Moshiri has received an offer for Everton Football Club, the English Premier League side, he owns. It narrowly avoided relegation last season. The longtime business partner of sanctioned oligarch Alisher Usmanov has injected hundreds of millions of pounds into the club, which has struggled on the pitch.

• China has repurposed Olympic villages used to house athletes at the Beijing Winter Games into quarantine camps for people potentially infected with Covid-19.

Transfer Market

• A new investment firm called Dynasty is trying to raise over $1bn to invest in professional sports teams, as the sector continues to attract capital. Jonathan Nelson, founder of private equity group Providence Equity Partners, and Don Cornwell, a partner at advisory PJT Partners, are behind the project, reported the New York Times’ Dealbook.

Final Whistle

it’s great that Andrew Wiggins is getting his flowers but this is still unimpeachably the best moment of his nba career pic.twitter.com/7NhxkCFeaK

— Kyle Goon (@kylegoon) June 15, 2022

The Golden State Warriors have their “Splash Brothers” in Steph Curry and Klay Thompson, but the breakout star of the NBA Finals may be Andrew Wiggins. Much like Rachael Leigh Cook in She’s All That, Wiggins has been solid since his selection as the first pick in the 2014 draft but it took a change of uniform for him to really shine. He also has an ear for the arts, as he demonstrates here.