NBA has high hopes about expansion in China

The NBA is succeeding in China where other sports properties like the NFL, MLB and top European soccer clubs have stumbled. Some believe the NBA’s impact on the way China does business may rival the effect of next year’s Beijing Olympics.

“The NBA is the one foreign sport that is doing it right in China, that’s really reshaping the business of sports in China,” said Terry Rhoads, who runs Zou Marketing, a sports marketing business in Shanghai. Rhoads signed Yao to his first contract with Nike before leaving to set up his own business five years ago.

“Every sports entity out there is looking at China,” Rhoads added. “It’s such a mystery, but the NBA seems to be demystifying the whole idea. The NBA will become the Harvard Business School case study for how a foreign sports property builds a successful business in China.”

Rhoads suggested the NBA’s rapid growth in China would be much like Nike’s. He said Nike’s revenue in China was $8 million 1994 when he joined the company, and $100 million when he left in 2002. Nike believes it can be a $1 billion business in China by next year.

The way the NBA operates in China is in sharp contrast to Europe’s top soccer clubs like Barcelona, Manchester United and Chelsea, which make an annual summer blitz hoping for quick cash and exposure.

“Arguably, these European soccer teams have a greater following and more passionate support in China than any NBA team except the Rockets,” said Chris Renner of Helios Partners, a sports marketing company in Beijing.

“But they come through here like carpetbaggers,” he added. “They just kind of show up on the scene, do a game, disappear, and then come back two years later. That’s no way to win hearts and minds.”

By contrast, the NBA runs clinics, road shows, junior leagues and brings in a steady stream of players. NBA basketball has been on TV in China since the 1980s. At parks and schoolyards, Chinese teenagers play basketball — known in Chinese as “lanqiu” (pronounced lahn-chew) — dressed in baggy shorts, wearing baseball caps cocked sideway on their heads, and even trash-talking in Chinese.

“The NBA has proven they’re part of the furniture, part of the landscape now,” Renner said.

Three NBA preseason games this week in China are sold out. On Wednesday, the Cleveland Cavaliers play the Orlando Magic in Shanghai. On Thursday, the Magic face a China All-Star team in the former Portuguese territory of Macau. And on Saturday, the Cavaliers play the Magic in Macau.

The NBA last week concluded a series of preseason games in Spain, Italy, Turkey and England featuring the Toronto Raptors, Boston Celtics, Memphis Grizzlies and Minnesota Timberwolves.

The preseason games have been overwhelmingly successful. But they may become relics, particularly in China.

Basketball has always been popular in China, introduced in the late 19th century by missionaries. Only soccer rivals it for popularity. But in the last half-dozen years its popularity has grown rapidly because of Yao, a growing middle class and pressure on China’s communist government to allow more media freedom in the run-up to next year’s Olympics.

“The Olympics is the Olympics,” Rhoads added. “But it’s kind of like the circus coming to town. The NBA seems like it’s going to be here forever.”

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