David Stern was the first to recognize the business potential behind China in the early ’90s, which is now the biggest market for the NBA with ties that are now political in the same way as they are economical.
The size of Chinese market for the NBA
In 2021, despite all the tension and pretty weird relationship, China is still the largest global market for the NBA. Despite a few turmoils because of various players that have spoken out against China, and those that didn’t speak out when they should have, the NBA has found itself in a weird position. The Chinese government always had a firm stance regarding any negative commentary from the players or NBA executives.
The revenue from China is approximately $500 million, which is a very conservative estimate, but other indicators show us the magnitude of the entire business operation. For example, in 2019, Tencent from China reached a five-year, $1.5 billion deal to remain the exclusive digital partner for the NBA in China. According to USA Today, that is the largest partnership outside of the US for the NBA, with more potential to grow in the future. On top of that, NBA China, a separate business extension of the NBA, valued $5 billion in 2019.
The business side of things is booming in numerous ways between NBA and China, and it all started back in the early ’90s when David Stern witnessed firsthand the enormous potential of the entire market. The NBA as a league initially established its footprint in Japan but soon organized a few exhibition games in China, and Stern used the opportunity to see what type of impact it would cause with the local fans.
David Stern immediately saw the potential
The book ‘Operation Yao Ming‘ detailed how Stern saw the fans were already familiar with the NBA and incredibly passionate about the sport and the whole concept, which was initially surprising. A businessman as he was, Stern recognized the immense size of the Chinese market and its value to the league in the future and the potential to monetize it.
“The commissioner had decided to come to mainland China after presiding over a pair of NBA games in Tokyo, the first regular-season games ever played outside of the United States. The Utah Jazz took two games from the Phoenix Suns in front of huge crowds that were enthusiastic, knowledgeable, and unfailingly polite. It was a revelation for Stern. “We may have been the capital of the basketball universe, but we weren’t the center,” he says, sitting in his spacious fifteenth-floor office with its sparkling view of midtown Manhattan. “It dawned on me that the combination of the global appeal of our game and the growth of television markets around the world meant that NBA games were going to be seen everywhere.” Even in Communist China. Or, as Stern saw it, especially in Communist China.”
China at the time was initiating its incredible economic growth that lasts still to this day, and the market with over 1 billion people made complete sense for the league. Stern used the opportunity to utilize the ‘China Dream’, implying none of the other foreign markets is as important as the Chinese one. From that moment, the NBA’s foreign relations have been directed towards China more than any other global market, even the US one to a certain degree.
“Like nearly every ambitious Western business executive, found himself nursing his own version of “the China Dream.” Other global markets were important, Stern says, “but China is an opportunity for the ages.” Back in 1990, Stern felt he was arriving at the perfect time to sell the game to a market of 1.2 billion people. Not only did basketball have a fabled history in the Middle Kingdom. But even during his three-day visit to the mainland, Stern could see that the Chinese had an abiding passion for the game. “There were backboards all over the place,” he says, “and most of them had kids playing.”
Even after the late great David Stern retired and passed away, the NBA has continued expanding as much as possible in China, trying to assert itself as the most popular league. It’s definitely up there in terms of popularity, but it has to respect the rules of the game implemented by the Chinese government, which sometimes is not easy at all. On top of that, there is an underlying complexity between the tightened relationship between the US government and China, which naturally shouldn’t affect the business side of things, but it might in the near future.
Future expansion in China and Africa
The NBA is now shifting its focus to Africa, seeing its potential as the next growing market they want to establish a more prominent footprint. With a population of close to 1.5 billion and a growing economy, Africa can be the next big thing for the NBA in the long run. The NBA has set up its own league there, consisting of 12 teams, and substantial financial resources have been invested in supporting the entire project.
The shift in the NBA as a brand going global was first recognized by David Stern, who understood the league would have to solidify its position outside of the US in the long term. Because of that, the NBA was heavily influenced by the influx of foreign players that make up around 30 percent of the league today. Therefore, hefty TV deals are made that are continually growing alongside immense coverage through different social media platforms.
The continuing support and popularity in China will largely depend on China having a player in the NBA that is more than a journeyman and at least a solid role player. Yao Ming was by far the biggest star on the Houston Rockets, and his impact on the sport in his home country is unmeasurable. The future growth of the sport and the popularity of the NBA will be tied to having more Chinese players in the league, which could happen in years to come. Creating more Chinese players in the NBA is Yao Ming’s current mission as the leading ambassador while further expanding the player development program in China.