Professional Sports in China, Slam Dunk?

Yao Ming’s presence in China cannot be understated. You would be hard pressed to travel more than a few city blocks in Shanghai without seeing a billboard with his imposing 7’ 6” frame. It’s hard to believe, but it appears that there is only one way for Ming to go, up. In February 2017, the former National Basketball League (NBA) All-Star was elected as President of the Chinese Basketball Association. The larger than life former basketball player has ambitious plans for the professional sports league and it begs the question: Is China ready to embrace professional sports on the levels seen in the West?

The task at hand for the CBA and Yao Ming is daunting, turning a primarily unprofitable league into a profitable powerhouse rivaling sports leagues of the West. Like most things in China, there appears to be enormous potential. A massive consumer base interested in the sport, there were over 750 million NBA TV views in China last year and a reported 300 million people playing the sport is some shape or form. The 20-team league has suffered from poor management and operations in the past. However, in recent years, the 22-year-old organization has seen an influx of American talent, including Carlos Boozer and Jimmer Fredette, spurring popularity in China and forcing the league to become more organized and commercialized. With Ming at the helm and the 2019 FIBA World Basketball games being played in China, now is the time for the CBA strike.

Basketball isn’t the only major sport attracting attention in China. Asia has hosted four Olympic Games and more importantly, are slated for three more before 2022. China will have hosted two of these events, both in Beijing.

One North American league believes now is the time to expand into China. The National Hockey League (NHL) views the 2022 Winter Olympics in Beijing as the perfect opportunity to export the league to China. The NHL will play two exhibition games in China in the Fall of 2017 and hope to capture the same growth the NBA has experienced in China. This is also the first year that a China born player was drafted into the NHL. The China Ice Hockey League consists of only four teams and is well behind the development of the CBA, but sees the same potential.

So, what will the CBA and other professional sports leagues in China look like in ten, twenty, thirty years? Like most aspects of China, it’s hard to say where the world’s largest country will go, but there are plenty of bold predictions. There are many positive signs for those hoping for rapid growth and commercialization of professional sports. China’s growing middle class and a transition towards a consumer economy bode well for the CBA and others. By 2030, over 35% of the Chinese population is expected to be considered middle class, with disposable income growing at 5.5% a year. With rapidly changing demographics and increasing disposable income, the opportunity for professional sports in China has an incredible upside and a bright future.

 

Zach Foster

Tulane MBA 2017