RAKUTEN SIGNS COMPREHENSIVE MEDIA PARTNERSHIP WITH NBA

The NBA and Rakuten (OTC: RKUNY) have signed a comprehensive media partnership worth a reported $225 million; making the Japanese e-commerce and internet services giant the league’s exclusive distribution partner for live game broadcasts in Japan. The company’s messaging platform, Rakuten Viber, will be an official media platform for the NBA, giving league content to the services’ 900 million users. On the marketing side, Rakuten will also now sell select NBA & team merchandise globally through its e-commerce platform. This is the 3rd major sports deal Rakuten has signed in the last 12 months, following a $235 million jersey sponsorship deal with FC Barcelona and a $60 million jersey sponsorship deal with the Warriors. CEO “Mickey” Mikitani has stated the company “wants to be a household name like Google and Facebook.”

Howie Long-Short: RKUNY is the largest e-tailer in Japan, with roughly 25% of all transactions in the country taking place on their site. However, with Japan’s aging population, if the company is to become a household name, the likes of Google and Facebook, they’ll need to grow internationally. Mikitani believes to do that, they need to hire the best talent they can find world-wide. In 2012, he implemented English as the official language of the company, so that the Japanese staff could seamlessly communicate with non-Japanese speakers. Since then, the company has started to invest internationally, acquiring U.S. cashback website Ebates and taking stake in both Lyft and Pinterest.

Fan Marino: Globalization remains the league’s most promising avenue for future growth and no American pro sports league has a bigger international following than the NBA. Perhaps that is why new Rocket’s owner Tilman Fertitta felt comfortable investing in the league, but said he “would have been scared to pay $2.2 billion for an NFL franchise”. Howie is the finance guy, but for my $2.2 billion I’m buying a pro football franchise. For all the negative talk surrounding the NFL, look at the TV ratings. Last Thursday night’s Bucs/Pats game drew 15.4 million viewers. The average 2017 NBA playoff game drew less than 5 million people. I don’t believe there is an NFL franchise with an intrinsic value less than $2 billion.

NBA expands global reach with massive deal with Rakuten

Author: John Wall Street

At the intersection of sports & finance.

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