Fortune Magazine
Dec. 12, 2005

Basketball
China is a slam dunk for the NBA.

BY STEPHAN FARIS | BEIJING

Sixty dollars for a basketball jersey seems like a lot in a country where dress shirts sell for less than $5. But a Reebok store in downtown Beijing moves half a dozen a day—and far more when the season peaks and teenagers swing by after school. “They always come for a particular number, a particular team,” says Li Wenxiu, a 25-year-old salesclerk, flipping through Shaquille O’Neal, Kobe Bryant, and Yao Ming jerseys. “Those are their heroes.”

The NBA is booming in China, and not just among jersey sellers. The league claims 100 million Chinese fans. While it doesn’t disclose financial information, it says revenues are in the tens of millions of dollars and that China is its fastest-growing market, on track to outstrip Europe. Adam Silver, president of NBA Entertainment, has predicted that China will one day even surpass the U.S. “We really see no end in sight for the growth here,” says Mark Fischer, 35, who runs the NBA’s China operations.

The NBA has been broadcasting in China since the mid-1980s, but it is only in the last year that things have taken off. It is now broadcasting on 23 stations, including the national state-run sports channel. A good game, shown live in the morning, can draw 20 million viewers. But television isn’t the revenue stream for the NBA in China that it is in the U.S. Instead it drives the brand and the sport. Nearly seven out of ten urban Chinese profess interest in the NBA, says Pierre Justo, president of TNS Sports China, a TV ratings agency.

So China Mobile pays to be the NBA’s official telecom company. Red Bull shells out to be the official drink. And Coca-Cola sponsors Jam Sessions, featuring mascots, dancers, and players. There are similar deals with Budweiser, Adidas, Nike, and Mc- Donald’s, all of which pay for a glint of the NBA’s reflected luster. Earlier this year, Mc- Donald’s offered NBA cups with each purchase of a Big Mac. Four weeks into the promotion, it ran out of stock. “There’s just a natural link between a guy’s passion for Big Macs and a guy’s passion for sports,” says Gary Rosen, chief marketing officer for Mc- Donald’s China.

Merchandising grew 50% in China last year. The country is the biggest market for NBA Reebok sneakers and Spalding gear outside North America. And the league will soon announce a deal to put NBA-branded notebooks and pencils in Carrefour supermarkets in China.

What is the NBA doing right? It certainly helps to have Yao Ming, a 7-foot-5-inch All- Star and “model worker.” But if the NBA wants to keep its hold on China, it will have to outlast Yao. Perhaps that’s why Fischer has floated holding regular season games in China, maybe as soon as 2007. He’s also in talks with the Chinese Basketball Association on how to strengthen its organization, and he’s considering launching some sort of NBA-branded league, the first outside the U.S. Says Justo: “After all, you don’t find a Yao Ming every day.”

Contact Information

Email: stephanfaris@yahoo.com