(Reuters) - Sports and entertainment agency IMG and Indian conglomerate Reliance Industries scored an agreement that could eventually lead to the formation of an Indian professional basketball league.
As part of the 30-year deal, the Basketball Federation of India (BFI) has granted the IMG Reliance joint venture commercial rights to basketball in India, including sponsorship, advertising, broadcasting, merchandising, data and franchising rights. Terms of the deal were not disclosed.
IMG Reliance also will advise the BFI on managing school and college leagues.
"This is a gigantic opportunity," IMG chairman and owner Ted Forstmann said in a telephone interview.
"We got together with (Reliance Chairman Mukesh Ambani) to build a very big sports ownership business in a phenomenal country that's growing like crazy," he added.
Ambani is India's richest man. Reliance, whose businesses include petrochemicals, retail and telecommunications, is India's largest company by market capitalization.
IMG and Reliance formed a joint venture in March to develop, market and manage sports and entertainment in India. Forstmann said the venture was formed to tap into a market of 1.2 billion people that boasts a fast-growing middle class and a young demographic looking to branch out beyond the wildly popular cricket.
IMG officials have openly discussed their desire to own the next Indian sports league after the success of the Indian Premier League, a cricket organization IMG helped establish three years ago that Forstmann said is now valued at $4 billion.
The IPL's rapid success has changed the way potential sports investors view Indian commercial opportunities, said Neel Shah, a sports marketing associate with the Indian office for advertising agency Dentsu who previously worked for Major League Soccer.
"It has raised the bar tenfold on what type of value people are placing on sports properties that do well on the ground and on air," he said of the cricket league.
Under Forstmann, IMG's profit has grown fivefold since he bought the company in 2004. He has expanded it from a business of representing athletes and models to managing more lucrative events like Wimbledon and Fashion Week, and crafting TV deals in China and India.
The initial focus for the IMG Reliance venture will be on developing the sport of basketball and the infrastructure, but a pro league could follow three to five years after that, said Andrew Wildblood, an IMG executive vice president and an executive director with the joint venture.
"This is a giant step towards our stated vision of making basketball a much-watched and popular sport in the country," BFI general secretary Harish Sharma said.
IMG and Reliance are not alone in wanting to develop basketball in India as the National Basketball Association in March announced a partnership to start a recreational league for 14- to 18-year-olds with another Indian conglomerate, Mahindra Group.
"There is a large untapped opportunity for sports in India, particularly for basketball," NBA International president Heidi Ueberroth said in an email. "The investments being made by Reliance and IMG will accelerate the growth of basketball and affirm its potential in India."
NBA Deputy Commissioner Adam Silver told Reuters in March that basketball participation and interest in India is growing, and there may be an opportunity to create a league sooner rather than later.
Forstmann acknowledged India currently lacks many arenas that could accommodate pro basketball teams, but said IMG does not want to miss out in a country where the number of Indian middle-class households is expected to surge fourfold between 2008 and 2030 to 147 million according to a McKinsey Global Institute report.
In addition, IMG Reliance is moving ahead with plans to open at least one sports academy to train Indians in such sports as golf, tennis, basketball and soccer, as well as position the country to win more medals in the Olympic games.
Source : Reuters
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