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NBA Has Hometown Edge in Courting China

Houston Rockets star Yao Ming draws throngs to exhibition games. The league and corporate sponsors look to a huge sports market for growth.

October 24, 2004|Ralph Frammolino and Don Lee | Times Staff Writers

Despite impressive middle-class gains, the majority of China's 1.3 billion people are peasants, and the average annual per capita income just slightly tops $1,000. That means even in Yao's bustling hometown of Shanghai, few could afford the NBA ticket prices of $35 to $240 for this month's games.

The Chinese government has yet to put a dent in piracy, and a blizzard of knockoffs will only create headaches for the logo-driven NBA.

Perhaps even more daunting are the uncertainties that come with doing business in a Communist land where the government controls many aspects of commerce.

Sports is no exception. In fact, China has long followed the former Soviet Union model, in which sports was viewed as a national endeavor, supported and dominated by layers of government.

Some analysts and businesspeople here say the system will inevitably change, with the central government turning over its hold on sports to private hands and nongovernmental organizations.

For now, though, the sports world must play politics according to the Communist Party rule book, and that can result in some uncomfortable blocked shots, as a consultant for Reebok found out.

The shoe company agreed to fix up a Shanghai public school play yard and pay the school in Yao's hometown $20,000 a year as a goodwill marketing gesture, said Terry Rhoads, a Shanghai marketing consultant who helped broker the sponsorship deal. It even featured the hometown hero in a dedication ceremony last year at the play yard, dubbed Yao's House because it is located next to the gym where NBA scouts first saw the budding star.

But this year, rumors began circulating that the local government wanted to evict Yao's House for a new tennis facility -- a consideration local officials recently confirmed, though leaving details vague.

"At first, the feeling was pure shock, disbelief and anger," Rhoads said. "Very much an attitude of we're not going to take it. Then we realized -- it's China!"

On a grander scale, the NBA and other outside interests have to step lightly, as the government-controlled Chinese sports establishment realizes and exploits the financial potential of its homegrown athletes.

In basketball, the government hopes to make money by remaking the Chinese Basketball Assn. into the NBA's image. Last week, it unveiled plans to move the 12-team domestic pro circuit to private ownership by 2015.

Left unanswered, however, was the delicate question of how much the CBA will allow the NBA to cherry-pick its best players. Indeed, the government's sports ministry had to approve Yao's release from the Shanghai Sharks so he could go to Houston.

Potentially next off the bench to NBA stardom are two young players for the Guandong Tigers: point guard Chen Jianghua and 7-foot center Yi Jianlian.

However, they and other Chinese stars still must give up a share of their incomes to the Chinese government and their former domestic teams. And their endorsement deals still pale in comparison to those of athletes from other countries.

NBA officials say they are cautiously optimistic that they can avoid business snares in the Chinese market.

"We can rise above that a little bit easier than other companies, given the love of people here for the game and the growing interest in sports in general throughout China," said Mark Fischer, managing director for NBA China. "Nobody is going to want to see basketball fail."

Least of all the fans. If the sold-out games in Shanghai and Beijing are any indication, Chinese sports enthusiasts are hungry for the NBA formula of sport as entertainment -- where fans are "consumers" and games are packaged as "experiences" that include scantily clad dancers, hip-hop timeouts and T-shirts shot into the crowd.

In the carnival-like atmosphere before the Rockets' game against the Sacramento Kings a week ago in Beijing, that global reach was on full display as fans milled around in NBA-licensed jerseys and mugged for photos with an Asian Ronald McDonald.

Wang Shengchun, 22, a Beijing University medical student, made the connection.

"The NBA is the best league of basketball in the world, has the best players from all over the world, and it could, by the way, earn a lot of money in the field of entertainment," said Wang, adding that the key would be changing how the Chinese view their beloved game.

"In China, we can see basketball as a sport," he said. "But Americans see basketball as entertainment. You can either watch a movie or go to a basketball game."

And the choice is made easier because of Yao. With a wholesome humility and a new autobiography, he has marketing coattails that won't quit.

In China, a vast nation eager to shed its overall sense of inferiority, Yao has become a hit because he has gone toe to toe with the best of the West but retained his Eastern demeanor, author Larmer said.

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