The NBA Nets a China Star

The hoops group has tapped Microsoft executive Timothy Chen to head its China division. Could a mainland NBA be far behind?

by Brian Hindo

Until now, it has been a forgettable summer for National Basketball Assn. Commissioner David Stern. In June, the NBA finals drew record-low television ratings. In August, former referee Tim Donaghy pled guilty in a betting scandal. And last week, the Portland Trail Blazers' No. 1 draft pick Greg Oden saw his rookie year wiped out with a knee injury.

Stern is turning to an unlikely location for some relief: China. In recent years, the NBA as well as Major League Baseball and the National Football League have recognized the potential of a huge Chinese fan base. And among the Big Three, the NBA enjoys a vast head start. Its popularity in China has grown immensely over the past decade, buoyed both by the success of homegrown NBA talents such as Yao Ming and also aggressive, savvy grassroots marketing efforts to promote the league. "The NBA stands head and shoulders above any other international sports property" in China, says Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.

Now the NBA is hoping to pad its lead. On Sept. 19, the league announced in Beijing that it had hired Timothy Chen, head of Microsoft's (MSFT) China operations, to lead its newly created NBA China division. The move consolidates the NBA's China operations, which had been run regionally under New York's direction, under one roof and under the supervision of Chen, whose success in turning around Microsoft's fortunes won him wide recognition in Asia management circles. Before joining Microsoft, Chen was chairman and president of Motorola's (MOT) China subsidiary.

Experience in Forging Relationships

And the NBA is certainly more popular in China than Microsoft. According to the league, there are as many basketball fans in China—300 million—as there are people in the U.S. "It's clear that China is the No. 1 growth opportunity for basketball in the coming years," says Neal Pilson, founder of sports consulting agency Pilson Communications and former president of CBS Sports (CBS).

At first blush, Chen is an unusual hire, given Microsoft China's success and his lack of a sports or media background. However Heidi Ueberroth, the NBA's president of global marketing partnerships and international business operations, who led the job search for a China CEO, says a key aspect was Chen's ability to forge relationships with Chinese companies and the government. Also, as the NBA expands its digital media strategy in China, his tech industry experience should serve Chen well, says Ueberroth (daughter of Peter Ueberroth, former MLB commissioner and head of the Los Angeles 1984 Olympic Games).

To the NBA's benefit, basketball has been played in the country for a long time and its rules aren't nearly as arcane or idiosyncratic as those of football, for instance. The National Football League, whose only rival in the U.S. on Sundays is religious services, has been slowly branching out to China. For instance, the New England Patriots have a Chinese Web site and the team was scheduled to play an exhibition game in Beijing against the Seattle Seahawks last month. But the NFL called off the game in April, saying that the league needed to focus more on a New York Giants-Miami Dolphins regular season game set for London on Oct. 28.

NBA on Chinese Cell Phones

Major League Baseball, too, has stepped gingerly into China. The New York Yankees baseball team, whose ace pitcher Chien-Ming Wang is Taiwanese, is working with the Chinese Baseball Assn. to help train players and coaches. Last year, MLB's No. 2 official, President and Chief Operating Officer Bob DuPuy, said that the league hopes to have teams play regular-season games in China "in the very near future." But baseball still is much more popular in Japan and Taiwan than in China, where basketball reigns.

In fact, in China the NBA is one of the most visible U.S. media properties, sports or otherwise. Chinese fans can watch games on state-run CCTV or 50 other regional networks. Chinese companies as diverse as appliance-maker Haier (HRELF.PK) and dairy provider Mengniu are marketing partners. And the league has inked deals with local partners such as big Internet portal Sohu.com (SOHU) to show Webcasts and on-demand broadband video.