Nba Expansion Into China

The first game played in the NBA was on November 1, 1946 in Toronto, Canada. The game was played between the Toronto Huskies and the New York Knickerbockers.

The final score was 68-66, and there were 10,000 people on hand. At that time, the NBA was named the Basketball Association of America, and was made up of eleven teams. The first 11 teams were from New York, Chicago, Cleveland, Detroit, Philadelphia, Pittsburgh, Providence, St.Louis, Toronto, and Washington. In 1949 six teams from the NBL, the Denver Nuggets, the Anderson Duffy Packers, the Sheboygan Redskins, the Tri-City Blackhawks, the Waterloo Hawks, and the Syracuse Nationals joined the Basketball Association of America and the seventeen teams formed the National Basketball Association. This is a far cry from the NBA of today.

Today there are 30 teams in 29 cities in the United States, and 1 city in Canada. The total fan attendance during the 2010-2011 season was 21,302,573. The NBA also has broadened their operations outside of the United States and has 16 offices worldwide, holding events in over 191 cities, in 30 countries.

The NBA has had 4 commissioners or presidents over its history. David Stern has been the head of the NBA since 1984, and has overseen the boom in the NBA popularity overseas. Within that timeframe he has had the luxury of marketing some of the biggest superstars the game has seen, names like Larry Bird, Magic Johnson, and the player that took marketing to the next level for everyone Michael Jordan.

When Michael Jordan was drafted into the league he was known as a high flyer, but not much else. Once he started to win titles with the Chicago Bulls his name recognition went through the roof. Jordan signed a deal to become the face of Nike basketball, and the shoe business was never the same. Jordan by himself became a global brand, and this helped the NBA expand their brand globally.

Helping the growth of the NBA as a global brand was the influx of foreign born players like Drazen Petrovic (Croatia), Vlade Divac (Croatia), and Hakeem Olajuwon(Nigeria) in the late 1980’s. The numbers started to grow from there. In 2003 there were 65 players representing 34 countries outside the United States. During the 2010-2011, season there were over 70 players from countries outside the United States. The number of international players and the worldwide appeal of the NBA’s superstars have helped make basketball the most popular sport in the world trailing only soccer.

The first tournament played by a NBA team outside of the United States was in 1988 by the Boston Celtics. The tournament was held in Madrid, Spain and included Real Madrid, the Italian league champion and the European winner of the Olympic qualifying tournament. This was one of the first steps of Stern’s foreign policy, which helped bring the NBA to the world outside of the United States. The NBA was a part of this tournament for 12 years, and won the championship every year. There is a new tournament that is currently being put together which will be a club championship and include the NBA champions starting in 2011. This will continue the growth of the league as a global brand.

The major expansion of the NBA outside the European market is in China, which has been established for some time now. China has had a rich history of playing basketball outside of the NBA in its own right. The game was first introduced to the Chinese people by Max Exner, in 1908. Exner had been a roommate of Dr.James Naismith, and was in the first peach basket game. The game grew from there and was a common game played by students and in 1935 was declared a national pastime.

When communism took power in China basketball continued to flourish, with the party using the game to represent hard work, collectivism, and revolutionize fitness. During the 60’s and 70’s basketball along with badminton, and ping pong were the only recreation available to the people. In today’s China the main area for pickup games is a streetball facility named Dong Dan, which has over 20 courts and is underwritten by Nike. Nike has been in the market since the early 1990’s and helped develop Yao Ming, China’s most famous basketball player.

The Washington Bullets toured China in 1979, and the All-Star game of 1987 was shown on CCTY. The Dream Team of the 1992 Olympics that consisted of Michael Jordan, Magic Johnson, Larry Bird, and the biggest stars of the game drove the want for more NBA basketball in the global market; this was especially true in China, in 1994 when the NBA Finals were televised for the first time. After that Michael Jordan become China’s main pop culture hero. Now with Yao Ming’s success, he has become a pop culture hero in his own right. Games are televised on a regular basis in China, with people staying up to watch the Houston Rockets games when Yao Ming was playing. He has since had to retire due to chronic foot problems.

To grow the brand in China the NBA has had to deal with the Chinese various levels of governments to get approval for stadium construction, and have local television stations to run the NBA games which are broadcasted nationally. To navigate these channels the NBA tagged Timothy Chen, who was with Microsoft’s China division to lead NBA China which was formed in 2008. There are three offices maintained by the NBA throughout China, with over 100 employees all there to expand the reach of the game within the country.

The NBA started to broadcast their games in China in the mid 1980’s, and have staged preseason games, and charity games that include NBA teams since 2004. In 2007 there was a preseason game between the Cleveland Cavaliers, and the Orlando Magic, which sold out in 10 hours. This speaks to the popularity of the sport when tickets that can cost more than some people make in a month’s time. There are fifty-one television stations that show NBA games in 20 of China’s provinces. This includes the CCTV network, which is the state owned network in China. The games have an average viewership of 558,100. There has been a downturn in television viewership since Yao Ming retired, which has caused some concern within NBA circles.

A big piece of the NBA’s push into China has been their grass roots efforts. They hold camps and clinics for kids all over the country. This is in accordance with the notion that to win in China you need to win at the local level. By partnering with local schools and holding thousands of camps for young people, the NBA has grown a following of up and coming basketball players throughout the country. This is done a couple of different ways. The NBA runs some camps directly, but some companies are doing camps on their own as well. Gatorade for example ran a branded basketball camp at 270 junior highs in five cities throughout China. Amway has also participated in running camps in different cities around China.

One of the keys to the NBA’s expansion in China has been the marketing partners they have agreements with. Companies like Adidas, Amway, Cisco, Coca-Cola, EA Sports, Gatorade, Lenovo, Mengniu, Nike, Oppo, Peak, Spalding, Toyota, Tsingtai, and Visa have all seen China as an area of opportunity, and have used the partnership with the NBA to grow their market share in China. AEG is another of the strategic partners for the NBA in China. The partnership with AEG is designed to run arenas throughout China.

The target is to eventually have 12 arenas total throughout China that can hold NBA events, as well as other live events that will bring in revenue. The first all new arena will be in Shanghai, and similar to arenas in the United States the naming rights have been sold, the Mercedes Benz logo will adorn the outside of the facility. There was already an arena in Beijing, which was adapted to the NBA’s use after the Olympics. The third arena will be in Guangzhou, and will be an 18,000 seat facility which will be used for NBA preseason games as being used for the Asia Games.

A large part of the partnerships is that there are not just US based companies in the portfolio. There are also local Chinese companies like Oppo, Mengiu, and Tsingtai which helps the NBA sell its sponsorship portfolio at a local level. The NBA utilizes these relationships to grow their sales within the region as China, with the total revenue in NBA China thought to be between $150 million and $170 million. They have seen double digit growth since the inception of NBA China in 2008. The games shown in China have almost doubled in the 2009-2010 season with 1937 games televised over the season. This is far and away the most games shown in China of any United States based league.

Web traffic has also become increasingly used by the Chinese people. The traffic on NBA China has grown 60 percent with the video portion growing 385 percent. The NBA uses the website not only to grow their brand but also to sell their products. Currently the NBA has products available to sell in over 30,000 outlets throughout China.

The utilization of its major stars have also helped the NBA in China. Stars like Kobe Bryant, Lebron James, Chris Paul, and the like have all seen the value in China and have all made goodwill trips to China. They have done many thing outside the norm to connect with the people of China. Ron Artest for example sold a gold watch and gave the proceeds to a Chinese student in junior high to pay for his ongoing education.

They have donated during natural disasters, and participate in grass roots campaigns bringing the message of the NBA to the people. The utilization of these stars is vital to the continuing growth. Now that Yao Ming has retired there is no superstar from China in the NBA. Giving back to the communities is an important part of this program.

One of the next steps will be to get a NBA sponsored league setup in China. There is a professional basketball league in China today, the Chinese Basketball Association (CBA). The NBA has a marketing agreement with them where they do clinics and grassroots events together. The NBA would like to grow beyond a marketing agreement into a full blown partnership to have more of a NBA run league, but at this time there are no hard plans for that.

The NBA has had success in China for multiple reasons. They have built strong partnerships; they had strong investors from the start, and have made an effort to understand the culture and how to get your message across in the right way. They had help for sure in that basketball was a popular sport in China to begin with, but they have made the right moves to grow. Through their website, the arenas they have control of, and the manpower resources they have built in China they should have success in years to come. Bibliography

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