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JohnWallStreet is on vacation this week. In its place, Sportico is running a five-part series of news features and columns taking a look inside Joe Tsai’s and BSE Global’s sports ventures.

Joe Tsai’s first experience bidding for a piece of a team taught him a lesson that informs his whole approach to managing his sports properties today: Have control.

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It was 2017, and Tsai was approached by representatives of the Brooklyn Nets. Mikhail Prokhorov was looking to sell 49% of the team. Was Tsai interested? A Taiwan native who spent many of his formative years near Philadelphia cheering for the 76ers, he found the prospect of owning a piece of a team Dr. J put on the map appealing. The asking price was steep, but Tsai could afford it, having helped build Alibaba into one of the world’s largest digital businesses.

But when the investment bankers representing him forwarded the deal’s term sheet, Tsai knew he needed to rethink his approach. “I was putting up half the money [of the team’s value], and then I got a term sheet, and I’m treated like I own 1%. I’m like, ‘C’mon, I’m a lawyer. I know how to read term sheets, this doesn’t give me any rights,’” Tsai recalled on a recent video call. “Pretty quickly after that I decided to pivot and enter directly into the process.”

Tsai, a graduate of Yale and Yale Law, convened his “rag tag team,” the name he’s given his inner circle—Rich Tao, Oliver Weisberg and Henry Li. They jettisoned the bankers and decided minority ownership wasn’t what they wanted. But it just so happened Prokhorov also wanted to sell the remaining 51% of the Nets, but only in a couple of years. The catch: Tsai had two weeks to get his bid in. The rag tag team vetted all the documents—ultimately 38 legal roadmaps governing the complex transaction of buying some now and the rest later—and submitted their bid to Allen & Company, which was brokering the deal. And then they didn’t hear back for a week.

“If you submit a big number, like we obviously did, and don’t hear back in a couple of hours, you’re obviously not the first guy on the list,” said Tao, who helps run Tsai’s family office, Blue Pool Capital.

Said Tsai: “It was a process that taught me being a minority shareholder in a team is not a lot of fun.” In summer 2019, the odyssey finally played itself out, with Tsai gaining majority ownership of the Nets and Barclays Center.

Don’t mistake a desire for control as meaning Tsai craves the spotlight. For more than two decades now, he’s been in the shadow of Jack Ma, the Alibaba founder who got Tsai to leave life as a corporate lawyer to help launch the business in 1999. Tsai freely admits he’s well down the list of influential team owners in the NBA, sitting just on the blockchain committee (“I would love to be on the media committee, just because it would be such a great learning experience for me.”) He also wishes the New York tabloids would stop printing stories on what Manhattan homes he may or may not be buying.

But the notion of control is central to how Tsai and his team view the evolution of sports and how they construct BSE Global and Tsai’s other sports holdings. Primarily: The evolution of media and technology means the best business position is to have control of the licensing rights.

For the bulk of modern sports media history, the cost of accessing a sports fan was incredibly expensive—you had to own a limited number of broadcast licenses or build out a cable system. That, explained Tao, put the networks and cable magnates like Liberty Media’s John Malone in the position to extract tremendous value from the sports ecosystem.

Contrast that with today, where the marginal cost of accessing a new consumer is pennies. “With the cost of distribution approaching zero, you want to be on the rightsholders’ side,” Tao said. “And the easiest way to be at scale on the rightsholder side is to own a team. All the innovations that are coming built on a close-to-zero distribution ecosystem are going to send disproportionate value back to the league, back to the players. We’re not LeBron James; we can’t participate that way, so the best way is to own a team.”

While Tsai says the Nets and Barclays Center were fully priced at the $2.26 billion (cash and assumed debt) he ended up paying, the entrepreneur believed he saw value others were discounting—mainly the NBA’s huge fan base outside the U.S.

It’s not news that China is a massive market—its basketball fan base is estimated to be the size of the entire U.S. population—but Tsai’s team believed international media rights were far undervalued based on domestic contracts. Roughly speaking, Tao said, Chinese media was generating viewership and engagement numbers similar to the U.S., but they were paying fees perhaps one-twentieth of the multi-billion-dollar U.S. media deals the NBA had at the time. While American consumers are wealthier than Chinese ones, the disparity still implies foreign rights are deeply discounted. “Our instinct is that the rights and value… in Asia are going to go up substantially,” said Tao.

They’re not just talking about China. Tsai says data shows southeast Asian countries are hotbeds of NBA interest. “Indonesia, the Philippines—those are potentially big markets the NBA can enter,” he said. The Philippines, for example, generates some of the largest web traffic and Facebook engagement for the NBA.

Similarly, Tsai believes sports betting and crypto/blockchain products also will be extensions of an ecosystem in which rightsholders—the league, team owners and players—stand to benefit greatly. “Media, sports betting, crypto—we see all those things converging a little bit,” Tsai explained. “You can’t talk about sports betting these days without thinking how that affects your media rights. And maybe, for the betting fan base, injecting a little bit of crypto will be interesting.”

Since buying into the Nets, Tsai has been on something of a sports spree. He now owns the WNBA’s Liberty, as well as Nets-affiliated teams in the G League and NBA 2K esports league. The rare minority positions he holds—in LAFC of Major League Soccer and G2 eSports—are deals done because they make financial sense, Tsai said.

Other businesses, mainly in lacrosse, are viewed through a prism more like basketball, with a combination of business sense and love of the game. Tsai owns a minority stake in Premier Lacrosse League and is majority owner of the San Diego Seals and the National Lacrosse League’s Las Vegas expansion team, in which Wayne Gretzky and Steve Nash are limited partners. “I love lacrosse, it’s a very small community,” he said. “Any opportunity that comes up in lacrosse, I’m more likely to do it than not.”

The center of the business plan, however, remains the Nets. By some measures, the rag tag team has already done quite nicely: The squad is worth $3.4 billion in the latest NBA valuations, fourth highest in the league. Yet Tsai thinks he’ll hold off on any other major acquisitions until the Nets “show some progress,” which he clarifies: “We need to win a championship.”

Changing technology and consumer habits aside, sports is a business where winning remains the best way to add value to media, betting and blockchain efforts that will define the sports business to come.

“Sports sits in the middle of this,” Tsai added, “because we own the intellectual property. Without the IP, no one can do anything. Having that is almost priceless.”