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Brick City
Mainland
China's pro basketball players got game, but the CBA can't
turn fast breaks into fast bucks
By
CRYSTYL MO Shanghai |
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Profiting from Chinese basketball ought to be a slam dunk. The
fans are there; attendance at Chinese Basketball Association
games has been rising steadily and is on pace to break 600,000
this season. Valuable sponsors are eager to plaster their logos
on team jerseys and arena signboards. Homegrown superstars are
emerging, such as rangy prodigies Hu Weidong, a crowd-pleasing
Jiangsu Dragons forward, and Yao Ming, a 2.23-m windmill who
regulates the paint for the Shanghai Sharks. Showtime in the
CBA has all the trappings of big-time hoops. It's becoming a
credible entertainment replete with thunderjams, jiggly cheerleaders
and thousands of screaming spectators.
But no matter how exciting the on-court action, China's professional
basketball league is leaving its best game in the locker room
and shooting air balls in the boardroom. Seven years after
it was sanctioned by Beijing, the CBA remains a profitless
enterprise full of disgruntled players and frustrated team
owners whose careers are orchestrated by a government bureaucracy.
Despite a burgeoning fan base, all of the 13 Division I clubs
are losing money. Inexperienced team owners and heavy-handed
government restrictions have prevented the league from realizing
the most lucrative sponsorships and licensing deals. "The
CBA just doesn't understand how to exploit the TV rights and
merchandising potential of the sport," says Richard Avory,
a Beijing consultant and former manager of league promotion
for IMG, the global sports marketing company that owned all
CBA rights until last year.
When it comes to money, Chinese basketball has hands of stone-a
fact many owners and managers blame on the control-happy CBA
itself. The league is run as a government sports program.
Top officials are Communist Party appointees accustomed to
top-down dictatorship-and the league's lack of marketing
and promotional expertise shows. At the beginning of the season,
CBA officials lost a $4.2 million marquee sponsorship and
promotion contract when its would-be partner, Y.C. Advertising,
a media company owned by Hong Kong's Tom.com, withdrew only
a month before the season was to begin. Motorola stepped in
as the league's title sponsor, but the hastily arranged deal
netted the CBA just $1.8 million, less than half of what it
might have earned.
Yet the CBA zealously reserves the rights to most of the
business's biggest money-spinners, including broadcasting
rights and major licensing deals. Many potential sources of
team revenue, including ads at courtside and on player jerseys,
are restricted. It is the league's prerogative to make exclusive
agreements with the makers of just about every product imaginable,
from computers to cars, airlines to bottled water, leaving
the franchises to pick from second-tier advertisers.
With the government maintaining control of key aspects of
the game, internal league relationships are as contentious
as a bench-clearing brawl. Players, many of whom make less
than $10,000 a year while living in shoddy dormitories under
a strict curfew, are very nearly indentured servants. And
the servants are getting restless. Ma Jian, a 32-year-old
forward, has taken the unprecedented step of suing his former
team, the Beijing Olympians, in a highly publicized contract
dispute. A few of the most talented players would like to
move to the greener pastures of the NBA (center Wang Zhizhi,
23, became the first Chinese national to play in the NBA when
he joined the Dallas Mavericks last year). But the government
and the clubs themselves are the ones who decide who goes
and who stays. "China views its athletes not as people but
as tools that can be used to bring glory and honor to the
country," says a former player.
Meanwhile, team owners say under the current system they
feel more like sharecroppers than entrepreneurs. They want
a bigger piece of the action. "The reason we have so many
conflicts is because the CBA doesn't treat us as partners,
they treat us as something they own," explains Li Yaomin,
general manager of the Shanghai Sharks. "We should be like
the NBA with truly independent franchises."
That's not how the state-run system works today. Only two
teams, the Sina Lions and the Beijing Olympians, are privately
held. The rest are either partially or wholly owned by government
entities (the August 1 Rockets team is fielded by the People's
Liberation Army). Each is expected to subsist mainly on an
annual allowance doled out by the league. This year the stipend
is $133,000 per team, which is supposed to help cover player
salaries, food, equipment and travel for a 26-game schedule,
plus play-offs. It doesn't go far. One poverty-stricken club
in Shanxi province reportedly can't afford to feed its players
meat during the season.
Cast as The Heavy in the courtside drama is CBA chief Xin
Lancheng, a fortysomething Communist Party apparatchik who
"wouldn't go to a basketball game unless it was his job,"
according to one industry insider. Xin, who missed the first
half of the season to attend Communist Party school, admits
to no great passion for hoops. "If I had things my way, I
would be a full-time painter of traditional Chinese landscapes,"
he says. But he defends the system with the ardor of a Red
Guard. "The CBA should earn the money and distribute it equally
to the clubs," he says. "This is the only way we can maintain
power and keep order." The lack of profits he attributes to
poor budgeting by owners. "If the clubs understood how to
take care of their finances better, they could make money,"
he says.
Even Xin's critics credit him with helping to develop the
sport through initiatives such as this year's founding of
the women's professional league, the WCBA. And his point about
mismanagement is right on the mark. Most team owners are neophytes
when it comes to running a sports franchise. Li Yaomin, a
retired journalist, admits he knew zip about basketball-or
business for that matter-when he was assigned to be general
manager for the Shanghai team.
But there are signs owners are catching on. Teams this year
were allowed for the first time to market their own licensed
apparel; the Sharks recently sealed a deal with Adidas worth
around $400,000, which includes a one-month training trip
to the U.S. A new Taiwanese-owned team allowed into the league
this year, the privately held Sina Lions, is raising the bar
in terms of shrewd professionalism. Co-owner Daniel Tu managed
to drum up $1 million in sponsorships in the Lions' first
season. Still, the U.S.-educated Tu, former president of STAR
TV in Taiwan, and his partner Daniel Chiang, chairman of China's
largest Internet portal, Sina.com, say teams must be given
more autonomy if China is to kick-start the high-voltage basketball
culture promoted by NBA franchises. "The best policy would
be to give the clubs the rights to earn money, then if they
don't have the professional sense to earn a profit, they shouldn't
even belong to the league," says Tu. "Sports should definitely
be market-oriented and market-driven," says Chiang. "The less
government intervention the better."
Though still lacking the sheer physicality of NBA play, the
competitiveness of teams has improved drastically since the
founding of the league-there are dozens of foreign players,
including some with NBA experience, and several foreign coaches.
Multinationals such as Nike, Adidas and Converse have invested
millions of dollars in the development of the sport. Says
Terry Rhoads, Nike's sports marketing director for China:
"When people think about the potential of this country of
1.2 billion and the level of talent already being displayed,
they see that if China can do basketball right it will change
the whole landscape of basketball the world over."
While it's unlikely the government will be passing the ball
to the private sector anytime soon, even Xin acknowledges
that the CBA can improve. "We are desperately studying the
NBA," says Xin, who attended the U.S. league's annual All-Star
game this month in Philadelphia. If he closely studied the
hoopla surrounding one of the sport's biggest hype-fests,
Chinese basketball just might learn some dazzling new moves.
  
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