Walking the tightrope, NBA's money machine revs up on China comeback

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The NBA returned to Macau this week with a lineup of stars, marking its comeback to China after six years. However, the league's most significant victories were not on the basketball court but in the realm of business and diplomacy, according to industry insiders and experts.

Thousands of fans gathered on Friday as the Phoenix Suns, led by four-time NBA All-Star Devin Booker, defeated the Brooklyn Nets. The event was attended by high-profile celebrities such as David Beckham, actor Jackie Chan, and Alibaba founder Jack Ma, who sat in the front row. This match symbolized the NBA's re-entry into the Chinese market, which had been effectively frozen since 2019 following a team official's tweet supporting democracy protests in Hong Kong.

Just hours after the pre-season game at the sold-out Venetian Arena, US President Donald Trump announced an additional 100% tariff on China, highlighting the tense relationship between the two nations. Despite this volatile environment, the NBA and its star players are making a strong push to return to the post-pandemic Chinese market. LeBron James and Stephen Curry have already visited the country this year to promote their brands.

Michael Lin, a VP at sports digital agency Mailman, an IMG company, noted that athletes often mention the rapid success of James Harden's 2023 visit to China, where he sold his wine and quickly sold out in just 60 seconds.

Near the arena, booths showcased the NBA's Chinese brand partners, including e-commerce giant Alibaba, live-video app Kuaishou, and dairy company Mengniu. These partnerships aimed to attract younger consumers through merchandise and other products.

David Leiner, president of trading cards for Fanatics Collectibles, mentioned that the company recently launched China-specific NBA card packs in over 30 cities. He emphasized that the 10 yuan ($1.4) entry price point was crucial for broad distribution.

"For us, it was very important to get the product broadly distributed," Leiner told AFP.

Decades of Business

China became a priority for the NBA in the early 2000s, partly due to the superstardom of Yao Ming, said Mark Fischer, former managing director of NBA China. Fischer noted that the business entity NBA China was valued at $2.3 billion around the time of its 2008 formation.

This figure grew to more than $4 billion a decade later, according to NBA deputy commissioner and COO Mark Tatum in a 2018 Forbes interview. In 2019, the league signed a deal reportedly worth $1.5 billion with Tencent for exclusive online streaming rights.

However, this progress was soon overshadowed when Houston Rockets official Daryl Morey publicly supported Hong Kong protesters. The NBA's return to Macau showed that Beijing was "opening the side door but not the main gates and red carpet just yet," said Fischer, now an international sports consultant.

Macau is a special administrative region of China, known for its casinos. The teams are also taking advantage of the opportunity to recoup lost revenues from the vast Chinese market.

The Suns hired the marketing team behind American internet celebrity IShowSpeed's successful China streaming tour. Andrew Spalter, founder and CEO of digital marketing firm East Goes Global, explained that they were working with the Suns to create content around players eating mooncakes and ensuring the correct terminology was used for Lunar New Year versus Chinese New Year.

The Nets, owned by Alibaba chairman Joseph Tsai, have an in-house Chinese social media team.

Warning

Victor Cha, a geopolitics expert at the Center for Strategic and International Studies, warned that China still holds the "ultimate form of power over the NBA" and could leverage its huge market to force firms to self-censor.

A sports marketer in China, who spoke on condition of anonymity, said the Morey tweet triggered online outrage within minutes. They noted that because of the sheer number of people involved with the NBA, it would be "impossible" to avoid a similar incident.

"We know how quickly things can spiral out of control," the source said. "It's not even about an individual NBA player, it's anybody associated with the brand."

Appearing in Macau on Thursday, Las Vegas Sands president and COO Patrick Dumont tried out Alibaba's AI technology, which purportedly translates spoken NBA match commentary from English to Chinese or vice versa. The Dallas Mavericks owner asked if he could say anything he wanted, as opposed to reading out scripted lines shown to him on a screen.

His host pointed at the text and replied, "Technically, you can say what you want, but this would be the most optimised."

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