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Following deal with J. League, Perform Group outlines digital vision for sports in Japan

by Shintaro Kano

Kyodo

The J. League raised a lot of eyebrows around the Japanese sporting industry with Wednesday’s announcement of a 10-year, ¥210 billion deal to sell online broadcasting rights to the British-based Perform Group.

The $2 billion pact is the largest commercial deal in the history of Japanese sports.

Perform Group’s chief representative in Japan, James Rushton, said it is worth every yen, which they expect to make back by 2026.

“We’re not a charity. We’re a commercial business — we’re a very successful business,” Rushton said in an interview with Kyodo News on Friday.

“We wouldn’t be doing this type of deal and putting down this kind of investment unless we were confident we could make a return. But the point is, we don’t have to make a return in 2017. … If we are slow and steady but continue to grow the brand, grow the audience and invest in the product, we will make a return.

“You can’t be game-changing and disruptive without some sort of risk. The point is, we feel that the J. League has done a fantastic job creating what they have now, but there’s still a huge amount of growth to go.

“I firmly believe in the growth story, and I firmly believe that whatever risk there is, it’s relatively limited, and it’s certainly worth the risk because the upside could be — and should be — huge.”

Aiming to become a Netflix-like presence in sports, Perform Group is the white knight the J. League could only have dreamed of. Twenty-three years after its founding, the league has been fighting off stagnation; crowd figures have plateaued and stadiums are becoming old and outdated.

Against considerable opposition from fans, the J. League last season reverted to the two-stage system followed by a championship playoff hoping to jolt interest and TV ratings, but it remains to be seen what impact that has had.

Enter Rushton and his team — who were perusing the Japanese market for “the last 18 to 24 months” — offering to more than quadruple the annual broadcasting fee for the next decade.

The league’s total revenue last year was slightly north of ¥13 billion, so the money from Perform Group alone, starting in 2017, will overwhelm that figure, giving J. League Chairman Mitsuru Murai a sizable war chest to reinvest in the game.

The length of the contract, Rushton says, was a key factor in Perform Group’s commitment to the J. League because it gives them time to get the general audience familiar with their Over-The-Top content through an online sports content platform, DAZN, which is slated for launch this summer.

“We’re trying to change the way fans consume sport. We have a long-term plan for Japan, a long-term vision for Japan,” Rushton said. “It was fantastic of Mr. Murai and his executive team to buy into that plan and work with us and agree to a deal over 10 years. That was a big thing for us, the length of the contract.

“It’s not for me to comment on how the money is distributed within the J. League and the clubs in the ecosystem, but obviously the league now has more money. That means they can invest more in players, both overseas and in the development of (local) players, so I would hope the standard of play improves over the next 10 years.

“I would expect the standard of facilities to improve over the next 10 years — and by that, I don’t just mean new stadiums or the refurbishing of stadiums, but the physical, actual experience of being in a stadium.”

Perform Group’s digital rights cover only the domestic market, but once the J. League’s current international deal expires in two years, Rushton said, the firm will be more than interested in adding those rights as well.

While some remain skeptical as to how much room for growth there is left in Japanese soccer, Rushton said there is plenty, adding that he would be disappointed if Perform Group does not eventually equal or surpass the existing broadcasters.

“The idea of tapping into fans’ passion points across multiple sports and buying the best quality of content across those sports, I think, gives us a distinct advantage not just to SoftBank’s Sportsnavi but versus WOWOW, J-Sports, Sky Perfect,” Rushton said.

“We stand shoulder to shoulder against any of those guys. In fact, I would argue we stand slightly taller in terms of the quality overall of our rights package.

“Our challenge and the J. League’s challenge is to create a product, to create an experience that is on par with the Champions League, Premier League, La Liga, Serie A — those great leagues from Europe.

“I don’t mean in terms of players, but in terms of the audiovisual product that can stand shoulder to shoulder with the European leagues. If we can do that, you’d be surprised at the size and interest of the J. League in general.”