The NBA started playing in China in 1979 when the Washington Bullets took on China’s national team at the invitation of then Chinese leader Deng Xiaoping. Few foresaw that one day China would play such a huge role in the NBA’s international growth.
The league generates revenue of over $5bn globally, and China is the engine room for its international revenue growth. An estimated 70m followers on the leading social platforms WeChat, Tencent Weibo and Sina Weibo help the NBA generate revenue from sales of merchandise and licensing agreements in China of about $150m annually. As an illustration of NBA’s massive reach on social media in the market, when Houston Rockets player Chandler Parsons hosted a Weibo chat last year he received more than 1,000 questions and generated 8.6m impressions.
NBA revenue in China is set to increase significantly following the digital media rights deal agreed earlier this year with Tencent, worth about $140m per year to the league in the seasons 2015-16 to 2019-20.
How has the NBA achieved such a strong position and reach in China? The reasons include:
- A long-term partnership with state broadcaster CCTV, beginning in 1987, under which NBA games have been broadcast live to the whole country.
- It has had an office in Hong Kong since 1990, handling all of its Asia business including China.
- The 2002 draft of Chinese player Yao Ming by the Houston Rockets, which massively increased interest in the sport. A hugely popular star at home, his legacy has been compared to that of David Beckham’s role in the rise in football’s popularity in China and the US. Interest in the sport is, however, now so developed that “China no longer needs an individual player to point to for garnering interest,” according to Luis Cabral, an economist at NYU Stern School of Business, and author of the report Exporting Sports Entertainment: The NBA in China.
Extensive grassroots activation including:
- Annual games staged in China between leading NBA teams
- Creation of after-school basketball programmes
- Build of a $1.5bn, NBA-branded, 2,300-acre sports and entertainment complex on the outskirts of Beijing opening this year.
Chinese smartphone maker ZTE Corporation is the sponsor of three teams in the 2014-15 season: New York Knicks, Houston Rockets and Golden State Warrior. Nike and adidas send their biggest NBA stars on promotional tours in Asia every summer. The league has licensing deals with Anheuser-Busch InBev, which owns the Harbin beer brand in China, and features NBA logos on its Harbin bottles.
The July 2015 deal with Tencent makes the Chinese internet platform the NBA’s most valuable international digital partner. Tencent becomes the exclusive digital partner of the NBA in China, with rights to stream a record number of live games and to deliver original NBA programming and highlights. The content will be accessible to fans via Tencent’s NBA sections on instant messaging platforms QQ.com and Mobile QQ, social networking platforms Qzone and WeChat, the Tencent Video application, and the Tencent News application.
NBA and Tencent will launch the NBA League Pass full-season live and on-demand subscription package in China for the first time.
Tencent and the NBA will also jointly manage and operate the NBA’s digital assets in China, including the official NBA online destination NBA.com/China and sites for all 30 NBA teams, NBA events and merchandise.
NBA ID, the league’s loyalty programme in China provides fans the opportunity to earn points for using NBA services and redeem them for special privileges and merchandise.
NBA China chief executive David Shoemaker said, “This ground-breaking partnership will reach hundreds of millions of daily users across Tencent… Our fans will receive unprecedented NBA content, interactive gaming, customised communities, and merchandise on QQ.com, Weixin, Tencent Video and News apps, and other Tencent platforms throughout the year.”
For Tencent, the deal provides exclusive content, strengthening its arm in its battle with rival Sina, although Sina continues to stream NBA games on mobile via Weibo.com.
Sina scored a major victory when NBA All-Star guard Kobe Bryant featured as a commentator during its coverage of the NBA Finals 2015. More than 120,000 viewers posted comments on Sina’s mobile platform during the game, according Sina Sports.
Bryant is a major celebrity in China. He has visited 10 times since 2001 and has more than 3.4m followers on his Sina Weibo account. This year he launched an official personal website on Sina and an online store at Tmall.com.
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