- The Washington Times - Monday, January 19, 2004

Most of the major pro sports leagues in the United States are making China the centerpiece of their international marketing efforts, considering it the country with the most economic potential.

A year after Yao Ming mania hit both sides of the Pacific Ocean, the NBA is airing its games regularly to more than 310million Chinese households — nearly three times the number of American homes with a television. The league plans to stage two exhibition games this fall in Beijing and Shanghai between the Yao-led Houston Rockets and Sacramento Kings.

The NFL also soon will announce exhibition games for those cities in 2005 and 2007, and it will broadcast this season’s Super Bowl to about the same number of Chinese households reached by the NBA.

Major League Baseball is working with the Chinese Baseball Association on a comprehensive, grass-roots effort designed to increase play of its game.

In each instance, the efforts are supported by extensive local marketing, native-language Web sites and game broadcasts, and youth clinics designed to foster play of basketball, football, baseball and other sports in China.

“There are great opportunities for pro sports in China. The growth over the next several years is going to be very, very significant,” said Marc Ganis, a Chicago-based sports industry consultant who is working with the Chinese government to raise the country’s profile among American sports and entertainment entities.

“China is embracing a more capitalist business model and has tremendous interest in all things American. The Olympics are obviously coming in 2008 [to Beijing]. That adds up to something very powerful for all those concerned.”

The 1.3 billion residents of China long have been a tempting economic carrot not only for the major sports leagues in the United States but for all of American commerce.

Several leagues, particularly the NBA, sought to raise their profile in China throughout the 1980s and 1990s by conducting tours, clinics and goodwill appearances staffed by prominent current and former players.

Those efforts never really clicked; interest in American sports was muted. The leagues were not staging exhibition or regular-season games in China as they were in Japan, Puerto Rico, Mexico, England, Spain and Germany, contests accompanied by a great deal of hype and having significant fiscal impact.

The leagues also found it difficult to conduct business in China and frequently heard horror stories of American companies losing millions in shady China-based business deals.

“There is still a learning curve that is being crossed,” Ganis said. “A lot of U.S. companies have no clue how to do business in China. It’s a very different culture. Even something seemingly simple here, such as doing due diligence to close a deal, is a highly difficult task there.”

Yao’s arrival in Houston, however, quickly began to melt barriers.

Within months of beginning play, Yao earned a spot as a starter in the NBA All-Star Game — an honor gained with the help of tens of thousands of Chinese who visited the league’s Web site to vote for Yao. He was the star of several prominent ad campaigns, thanks to lucrative endorsement pacts with Visa, Apple and Gatorade.

Last fall, Yao trumped those deals by signing a contract with Reebok worth an estimated $70million. Reebok, in turn, has opened a full-throttle NBA merchandising effort in China.

Basketball now is the most popular participatory sport in China, and the NBA’s merchandising business there is growing at an annual rate of 50 percent, topping any other major country in which it does business.

“I don’t think the Yao craze has died down at all, certainly not in China,” said Scott Levy, the NBA’s vice president for international TV and marketing partnerships. “The viewership there is as strong as ever, and that’s only helped to broaden the interest in the entire league. Fans in China now also want to see LeBron James. They want to see Carmelo Anthony. They don’t want a spoon-fed or watered-down version of the NBA. They’re interested in all the same players and teams as we are in America.”

The leagues’ work in China is transcending interest spurred by Yao, and it is turning the country into a permanent, fully fledged place to do business. The NBA operates an office in Hong Kong, and the NFL and Major League Baseball have offices in Japan that also serve China.

“With the Olympics coming there, we want to be there, and we want China to be competitive in baseball. It only helps us in the long run,” said Paul Archey, senior vice president of Major League Baseball International. “Our base of support is relatively small there right now, but the next couple of years are going to be very big for us.”

Corporate America is underwriting the next chapter in the leagues’ Chinese immersion program. The leagues, fueled by the mounting interest of Chinese fans, have been joined in China by many of their primary corporate partners, companies like Reebok, Nike, Anheuser-Busch and Coca-Cola.

“It’s not just us by ourselves now,” said Sal LaRocca, the NBA’s senior vice president of global marketing. “Reebok, for example, has come into China with a very comprehensive [retail] program and will be in 175 to 200 major stores with our gear this year. That’s basically up from zero.

“Around the world, whether it’s Madrid, Mexico City, Melbourne or Chicago, people are all migrating to many of the same pieces of popular culture. We’re part of that, and China is certainly part of that, so we’re very optimistic.”

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