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Hong Kong Consortium Denies Involvement In Cavs Investment
Published May 27, 2009
|NWD Says They Have No Involvement With
Group Of Investors Buying Share Of Cavs
BEEFING UP THE ROSTER: The PLAIN DEALER's Windhorst noted Huang and "several of his partners were in Cleveland and attended" Eastern Conference Finals Games One and Two last week against the Magic. The "direct impact of the move is securing the future of the franchise, which has been in a minority ownership flux for the last couple years as it loses millions in attempting to build a championship-quality team." The deal "will not only mean an injection of capital but will open the Cavs to business in China." Windhorst noted the move, which has been "kept mostly secret in America, is being supported by the NBA as they have encouraged development in China." Meanwhile, another effect of the deal is "how vital this new link" could be for Cavaliers F LeBron James, "providing a huge tie-in with an economy James is eager to tap." If NBA owners approve the deal, it "could help to remarkably strengthen James' relationship with the Chinese fans and consumers that he's been working to reach for the last four years." James and Nike, "by far his largest sponsor, have been on a mission to create a bond with the Chinese over the last three years," and becoming the Michael Jordan of China "from a marketing standpoint would allow James to reach his goal of someday becoming the first billionaire athlete" (Cleveland PLAIN DEALER, 5/24).
A WELCOME INVESTMENT: In N.Y., Barboza & Schmidt wrote the deal "signals the first significant investment in a major American sports franchise by investors from China." The sale "may be the most ambitious move yet in an American sports landscape full of leagues, teams and players striving for a foothold in the expansive and largely untapped Chinese marketplace." Barboza & Schmidt noted the move will be "interpreted as an effort by the Cavaliers to entice James, who will become a free agent after next season, to stay in Cleveland and capitalize on the franchise's connections in China" (N.Y. TIMES, 5/26). In Akron, Pat McManamon wrote about 10 years ago, "we all got mad when Japanese interests bought U.S. properties, like Rockefeller Center." However, now we will "probably all be happy if Huang [injects] Chinese money into the Cavs" because it "might help the Cavs keep LeBron." Meanwhile, McManamon noted the revelation that the Cavaliers have "lost millions in the past couple years" is "pretty stunning -- especially looking at the Q every night, with all the sellouts and all the advertising and all the sponsorship" (OHIO.com, 5/24).
Dominating Chinese Market
A Top Priority For James
HOW IT AFFECTS THE NBA: In N.Y., Mitch Lawrence noted although the NBA is "eager to grow its brand in China and has been quietly looking for foreign investors to buy into franchises, it is not known if the league would view the proposed deal and the marketing ramifications as a form of cap circumvention that would give the Cavs an unfair advantage" over other teams (N.Y. DAILY NEWS, 5/25).
SOMETHING TO GET USED TO? Former Portfolio Magazine Wall Street Editor Jesse Eisinger said it is "good" for both the NBA and the U.S. "that the Chinese are buying into assets." Eisinger: "This is our greatest American export, sports and culture, and I don't think there's going to be any controversy." CNBC's Dennis Kneale: "China is going to be investing more, and the more they invest in the U.S., the better it is. It just aligns their interest more with ours" ("CNBC Reports," CNBC, 5/26).