Most valuable player

Will China deal keep LeBron James in Cleveland?

Most valuable player

"King James" of Cleveland: LeBron is the Cavalier-in-chief

LeBron James hopes to pip Tiger Woods to become the world’s first billion-dollar sports star. Reaching out to a billion-plus new basketball fans could help him hit his ten-digit target.

News this week that a Chinese investment group is keen on buying a stake in the Cleveland Cavaliers – James’ team – suggests that the NBA’s Most Valuable Player in 2009 may be a part of their plans too.

Kenny Huang, who is heading the Chinese group interested in the Cavaliers, has brokered various deals between Chinese firms and US sports franchises in the past. But the Cavaliers transaction (a 15% stake in the franchise and its sports arena) would still be a groundbreaking one, as it would be the first time Chinese money has backed an NBA team. The deal still needs approval from the game’s governing body.

Basketball’s popularity in China is well known, with estimates of player numbers as high as 300 million. The NBA’s marketeers have played a patient game in promoting the franchise in China, since first sending the Washington Bullets on a tour in 1979. At the time the Bullets seemed less than enthralled by the trip. Power forward Elvin Hayes even refused to leave the bus during a sightseeing visit to the Great Wall, complaining that he had “seen a big wall before.”

But the NBA built up an appreciative Chinese audience nevertheless, offering free-to-air game coverage until the late 1990s, and a survey last year from market research firm TNS reported that 89% of 15-to-54 year olds had no difficulties recognising the NBA brand.

The next step for the NBA’s Chinese subsidiary is to cash in on the game’s popularity. Matches are screened each week across 51 domestic channels, to viewing figures that average 36 million. NBA merchandise is sold in more than 50,000 locations, according to the China Daily. And NBA China has partnerships with a range of corporations including Adidas, Coca-Cola, Lenovo, Nokia and Haier.

The game’s high profile also means that America’s NBA professionals are much more enthusiastic about trips to the east too. James included; he’s visited the country four times, including an exhibition game and winning a gold medal at last year’s Olympics. There have even been mutterings about Mandarin lessons.

Although he isn’t the nation’s favourite player (the accolade goes to the LA Lakers Kobe Bryant, if shirt sales are anything to go by), James is still a basketball superstar in China. He sells more shirts than local hero Yao Ming of the Houston Rockets, too.

Audiences appreciate the dominant contribution James makes in games, says Huang Risheng, a writer for China’s Titan sports newspaper; “The Chinese are looking for individual heroes. We are not open enough, not extroverted enough. We like the individual effort, just one man saving the whole team like James.”

James is certainly no introvert, especially when it comes to a sense of his own worth, and China is a market in which he hopes to cash in.

Unfortunately, he got off to a bad start. A Nike ad, in which he inadvertently caused offence by outwitting a kung fu master, two traditionally attired women and a pair of dragons, was too much for the State Administration for Radio, Film and Television, which banned the campaign for containing content “that blasphemes national practices and cultures.”

Then he ran into controversy at home, when he declined to sign an open letter to the Chinese government on its policies in Sudan. The US media speculated that he was worried about compromising future sponsorship opportunities.

But James is set to become a free agent in 2010, and is said to be considering his options. A wild card move to Europe (no salary cap, as well as options to promote brand Lebron in frontier markets) has even been rumoured. More likely is a switch to a US rival. The New York Knicks are supposed to be interested.

The alternative, of course, is to remain a Cavalier. And the common view is that this is why team bosses are pursuing the Chinese link, as bait for a contract extension with their best player.

With a local backer the Cavaliers could ratchet up their Chinese revenues. James would then get his cut.

Success in China would keep “King James” happy in Cleveland.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.