NBA makes full-court press in China

The Milwaukee Bucks and Golden State Warriors recently played an exhibition set in China. Twenty hours and a stopover in Anchorage got them to their first stop in Guangzhou, where they played to a sold out crowd. The deal was put together when Yi Jianlian was still playing for the Bucks. But even without him, in a country where there are 300 million fans and only .0005 percent has ever seen a live NBA game, any game is going to do well.

It was also an opportunity to bring over some VIPs in the apparent hope of rewarding existing luxury suite holders and soliciting new ones.

I had the opportunity to observe the circus after it arrived in Beijing, and everyone was gearing up for an official reception. It was a mixture of young stars (some who acted sheepishly and others who were trying out their 1,000-yard-stare); old stars who just did their thing; NBA wives who set up defensive positions against casual girlfriends and non-NBA types; staffers who carefully ingratiated themselves to those who mattered and ignored those that did not; VIPs who mingled over cigars, wine and Scotch; and fans who edged in and out asking for autographs and taking pictures.

The big brass mostly huddled in private areas away from the mill but would occasionally walk through the herd for effect.

However, despite the spectacular setting, it felt more like a traveling musical show, just another performance in just another place. The Beijing Ritz Carlton was fabulous. Western breakfasts were provided, followed by lunches and dinners at carefully selected Chinese restaurants and sightseeing trips in luxurious tour buses. People new to China talked about the Great Wall and Forbidden City.

Those with China ties summoned local staffers to terrify local vendors into bottom line prices for knock-off watches and local trinkets. A good time was had by all. But like going to New York, staying at a five-star hotel and catching a show, while you get a sense of what the place has to offer, you do not get much of a sense of it as a place.

The measure and strength of a city are how its people cope with their everyday lives and the unfortunate part of such trips are that there are few opportunities to see and share experiences with the people on the other side of the window from your bus or hotel room.

This sense of the “Great American Road Show” pervaded all aspects of the event.

Because, while the NBA did a fabulous job of catering to their players, guests and VIPs, it was not clear that their staff understood or was even interested in the world on the other side of the glass. Only two appeared to be able to speak Chinese. They seemed oblivious to the fact that few high-ranking Chinese officials attended the event, and while polite, when questioned, few could tell me the history of the NBA in China or much about China at all.

There have been many western companies who have entered China cloaked in the certainty of their own greatness only to fail because their staff did not understand the world they needed to operate in.

According to the Chinese, the NBA background story is that Commissioner David Stern came in 1987 with a highlight tape of the All-Star Game and tried to interest CCTV in broadcasting it. Two years before Tiananmen, three years after becoming commissioner, in the midst of the Cold War and without an appointment, he walked into the most powerful TV group in China and got them to broadcast the reel. Yes, he had to offer it as a gift. Yes, it took two years to get a contract. And yes, it was years before the NBA starting seeing positive numbers, but the results are undeniable.

Depending on whom you talked to, he waited for either more or less than an hour before the guard would even allow him into the building. True or not, the story is interesting, because it’s all about face. The NBA did not conquer China. The relationship started with a gift that recognized the importance and roles of each party. After 21 tumultuous years, the approach seems to be paying off. As part of the Bucks/Golden State exhibition series, the NBA and AEG celebrated the signing of a joint venture to build 12 basketball stadiums in China.

Obviously, a lot of credit goes to Stern. His decision to take direct control of the NBA’s image and marketing and to go into China has propelled the league into a multi-billion dollar entertainment machine with huge market potential. However,  how the NBA handles a foreign market where the popularity of their product is greater than it is at home presents challenges, many of which will have to be solved in China, not New York. The issue going forward is: will the NBA be able to see beyond its own bubble to find the approaches necessary to make it successful in China?

What’s at stake?

Adapting to the dynamics of the constantly changing Chinese market is the second problem. Figuring out that you can’t do business like you are in Kansas is the first. For small and medium businesses in America, watching what the larger companies do and don’t do can be an education in itself.