The NBA in China: Opening a Super Market
Thursday, October 18, 2007
When Abe Pollin led the NBA's first venture into China in the summer of 1979, not every member of the Washington Bullets shared the team owner's enthusiasm. As players and their wives poured off a bus to take in the splendor of the Great Wall, Elvin Hayes and Dave Corzine refused to budge.
Pollin peered back and asked Hayes if he was coming. "I've seen a big wall before, Mr. Pollin," Hayes told him. Wes Unseld tried to persuade Hayes by telling him the wall was the only man-made structure that can be seen from outer space. To which Hayes responded, "I'm never going into outer space."
Pollin was so infuriated afterward he swore that he'd never take his team on another trip. "One of the wonders of the world," Pollin said recently in a telephone interview, "and they didn't get out of the bus."
Where Pollin's generosity with his players ended, the NBA's infatuation with China began. Over the next 28 years, the league's flirtation became a courtship, which is now a serious commitment, with the establishment of NBA China. The subsidiary -- which places all of the NBA's businesses in China under one umbrella -- was announced last month and is being ushered in this week with preseason games featuring the Orlando Magic and Cleveland Cavaliers.
The Magic will become the first team since the Bullets to play the Chinese national team in China as it opens a new sports arena in Macao on Thursday. The Magic defeated the Cavaliers, 90-86, in Shanghai on Wednesday, and those teams will meet again on Saturday in Macao.
The three games in China this week conclude an international NBA preseason that has already seen four teams -- Boston, Toronto, Memphis and Minnesota -- play in Italy, Spain, Turkey and England as part of NBA EuropeLive. The NBA's globalization efforts increased after the 1992 Dream Team's gold medal performance, but in recent years, the league has developed a special affinity for China.
It's easy to understand the NBA's desire to intensify efforts in China, with its enormous population (1.3 billion), booming economy (the world's fourth largest and steadily rising), interest in basketball (the NBA estimates that 300 million Chinese play basketball) and next summer's Beijing Olympics.
The league generated $50 million in China last year, making it its largest market outside of the United States and persuading league officials to expand the brand. "We looked at this as a way to help us accelerate the buildup of our infrastructure and operations," said Heidi Ueberroth, NBA president of global marketing partnerships and international business operations. "I think if it's successful, we'll look at it as the model for other areas."
"The dynamics in China -- with the incredible popularity of the game, the increasing urban middle class, the development of the arenas, the Olympics -- [are] creating such an opportunity for basketball and the NBA," she said in a telephone interview. "The challenge, and it sounds like a high-class problem, is really keeping up with the demand in a place that is so vast and broad, such as China."
To address that concern, the NBA hired Timothy Chen, former chief executive of Microsoft's China operations, last month to head the league's subsidiary in China. Chen, a native of Taiwan, started this week and is one of the best-known executives in China. He was chairman and president of Motorola in China for two years before joining Microsoft in 2003.
Chen received his executive MBA from the University of Chicago, where he became a fan of Michael Jordan and the Chicago Bulls, or "Red Oxen," as they are referred to in China. He is expected to help the NBA maneuver through a country where the right guanxi -- the Chinese word for political relationships and influence -- is required to persuade governments to provide the land necessary for new arenas and persuade local and provincial television stations to carry NBA games.
"His expertise just stood out, to build and grow a business," said Ueberroth, who led the recruiting process.