ESPN, Chinese groups invest in NBA China

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HONG KONG -- The Walt Disney Co.'s ESPN has joined Hong Kong real estate billionaire Li Ka-shing and Chinese government-backed investors in paying $253 million for 11% of a new entity formed to conduct all of the NBA's business in China, Hong Kong and Taiwan, the NBA said late Monday.

Tim Chen, former CEO of Microsoft Greater China, will be CEO of the new NBA China group, a move analysts say could help grow and protect the league's popular licensed content from piracy as the sport grows on its own, spearheaded by the adoration of such local heroes as Yao Ming and Yi Jianlian, who play for the Houston Rockets and Milwaukee Bucks, respectively.

Basketball is one of China's most popular participant and spectator sports, and is broadcast on flagship China Central Television as well as 51 other telecasters.

The other major investors in the new NBA China entity are the state-owned Bank of China Group Investments; Legend Holdings, a subsidiary of computer-making giant the Lenovo Group, of which the Chinese government is a major stakeholder; and China Merchant Investments, a 136-year-old commercial bank listed in Hong Kong.

"The opportunity for basketball and the NBA in China is simply extraordinary. The expertise, resources and shared vision of these immensely successful companies will help us to achieve the potential we see in the region," NBA commissioner David Stern said in a statement.

Added Disney president and CEO Robert Iger: "We are delighted to be participating in this promising venture in what's become one of The Walt Disney Company's most important markets."

The NBA opened its Hong Kong office in 1992 and currently employs 100 people in four offices in Greater China. It first hosted the China National team in 1985.

"Basketball is a global phenomenon, a sport that has brought nations together through the spirit of friendship and healthy competition. It represents a quest for excellence that requires teamwork, discipline and personal development," Li Ka-shing said.

The new NBA China entity under Tim Chen will be responsible for all of the NBA's business dealings here, including content licensing. Its $253 million in investment will allow the NBA to continue working with the Ministry of Sport and the Chinese Basketball Assn. to promote the sport in rural and urban communities, an NBA statement said.

"Microsoft has a long history of dealing with the Chinese government from the standpoint of getting their software paid for, and Tim Chen has a really good record of progress in that respect, so the hope would perhaps be to leverage that track record over at NBA, because it's also a content licensing business," said media analyst William Bao Bean, a partner at investment bank Softbank China and India Holdings.

Bean noted the difficulty foreign content providers have had getting licensing deals in China, owing partly to their own sluggishness, policies back home and rampant piracy in China.

"The NBA, on the other hand, is probably one of the most successful in getting their content into China because of the time-sensitive nature of the content," Bean said. "The games are always fresh and new, and they don't lend themselves to piracy as much as other content."

Li's investment in the NBA is not surprising considering other recent investments in such youth-oriented properties as the social networking Web site Facebook -- in which his company bought a $60 million in late 2007 -- and the peer-to-peer TV show distribution platform Joost.

"It fits in with the media platform (Li) is launching in China," Bean said.

Jonathan Landreth in Beijing contributed to this report.
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