Catching Up With The NBA’s Tim Chen, Heidi Ueberroth
The NBA has thrived in the land of 1.3 billion for years. Now, it’s looking to cash in by creating its own NBA China division, which is valued at more than $2.5 billion. The company, which has opened two NBA stores, is being managed by CEO Tim Chen and supported from the U.S. by Heidi Ueberroth, the league’s president of global marketing partnerships and international business operations. Both sat down in Beijing with SportsBusiness Journal staff writer Tripp Mickle to talk about the company and its plan.
What impact will the Olympics have on the NBA in China?
Chen: The Olympics is excellent in China, of course. We’re thrilled to be part of the program. We’re sending 35 people from the U.S. NBA to monitor and see what we’re doing here. It’s truly great for Chinese people to see the highest level of basketball played, and the most exciting thing is the new basketball arena.
Ueberroth: It’s exceeded our expectations. We knew the Olympics would be a great thing for basketball. That’s why we partnered with BOCOG on the game presentation. The enthusiasm of the fans is phenomenal, the stands are full and the TV audience has been tremendous.
Tell me about partnering with BOCOG on the game presentation.
Ueberroth: We approached them about that and that’s how we were introduced to the owners of the arena. It’s through those discussions that we became the manager of the facility after the Olympics.
What is the NBA’s long-term vision in China?
Chen: We see basketball as not only a sport here but really a lifestyle. Something like 300 million people participate in basketball. With Yao Ming and Yi Jianlian playing in the NBA, we see that as a bridge to making basketball as being a part of everyday life in China. We think the key is to work with the Chinese government to develop basketball in China. There’s also business opportunities other than TV. We have online, sponsorship, merchandise. We also started our own stores. We have two stores and hope to have more.
How many more?
Chen: We hope to open 1,000 — in that range. That’s our touch point to fans.
Ueberroth: Everything Tim’s mentioning is about growth. That’s really what led us to the creation of NBA China. We know to keep pace with the growth here and the changing market we had to build out infrastructure. Opening new offices — at least two more in Guango and Central or Western China — is a way to manage that growth.
You talked about working with the government, which is said to be critical in China. How do you do that when the CBA already exists here and you’re talking about creating another league?
Chen: We and China Basketball Association have a long-term history. Even last summer Team China was in Las Vegas working in the summer league. The best way to summarize our relationship is the way that David Stern did at a press conference. He was asked the question, “Would you like to have a league in China?” Mr. Stern answered very well: “We would like to have a league, but only with the China Basketball Association.”
How do you work with the China Basketball Association?
Chen: Many ways. Grassroots development or how you develop CBA teams are ways. We see working to grow the game of basketball at the grassroots as really important.
Ueberroth: Some of it’s to be determined, but in partnership we can dramatically accelerate the level of basketball talent in China.
This sounds like a long-term strategy. How patient will investors be as you develop a league?
Ueberroth: When we went with the structure we have, we went with companies with resources in China, expertise and familiarity with the NBA. They know that this is a process. Right now, we’re looking at — with AEG and the developers of the stadium — the type of plans around the arena. Basketball courts, retail, hotel and so on. Really, anchors to build out the Wukesong area (where the Olympic basketball stadium is).
What are the challenges you see in this marketplace?
Chen: One is scale. A province like Guangxi has a basketball competition and they have 20,000 people participating. We’re in the right place at the right time with the Olympics. It’s really about how we scale up.
Ueberroth: It’s really hiring people, building out the infrastructure and then expanding out and up. We wanted to bring our operation here to make it more local. You can start in Beijing, Guangzhou, Shanghai, but you have to build out from tier-one cities to tier-two cities. The sheer scale of China is a challenge in that way.
Chen: The other key is how we secure partners. Sports marketing is relatively new. It’s not like you have a partner for 20 years. It’s someone who’s brand new.
People say that sports marketing is new in China. There have never been suites here. There are no naming rights. How do you deal with that?
Ueberroth: Some of this is new, but it’s not limited to Beijing. Shanghai is hosting the World Expo and looking at arena development. Guangzhou is looking at arena development because the 2010 Asian Games are coming. They see opportunities to build arenas and build communities around them.
China seems to adapt pretty quickly. Are you betting that China will pick up on these things quickly, almost as though they’re using an escalator rather than the stairs?
Chen: This is pretty natural. You look at the rise of the middle class. People are looking for where they can have entertainment. It’s almost a necessity. It’s a new lifestyle.
Ueberroth: I’m from California and I used to always be impressed with the pace of New York, but the pace of growth in China is just unbelievable.
