N.B.A. Looks to Asia for Next Growth Spurt

N.B.A. Looks to Asia for Next Growth Spurt

When the National Basketball Association commissioner David Stern spent a week in Beijing in the winter of 1987, he had to plead with China Central Television to broadcast N.B.A. games — and he eventually offered to provide content free.

Now, the N.B.A. is one of the most popular brands in China, and the only American sports league with a significant following throughout Asia. The league has a combined 70 million followers on Sina Weibo and Tencent’s microblog platforms, compared with fewer than 400,000 followers for the National Football League

The new commissioner, Adam Silver, who replaced Mr. Stern last month, is hoping to build off that success, with expansion plans across Asia. In China, the basketball league is expanding TV coverage and building lavish sports facilities. In India, it is promoting the sport through after-school programs. In South Korea, it is trading on basketball’s “swag.”

He has big ambitions.

Mr. Silver said that N.B.A. China, which had $150 million in revenue in 2012, enjoyed growth “greater than 10 percent” last year, and that he expected double-digit growth for the foreseeable future. While revenue in China is a small fraction of the overall business — the league generated $5.6 billion in global revenue last year — Mr. Silver said the N.B.A. would eventually be bigger internationally than domestically, and Asia was the key factor.

“The U.S. represents less than 5 percent of the world’s population,” Mr. Silver said. “And we have, along with soccer, the most popular sport in the world.”

From the outset, the N.B.A. had to tweak its strategy for the Chinese market.

Unlike in the United States, there have been no bidding wars for N.B.A. television rights in China, because CCTV is a monopoly there. Although the league and CCTV announced a multiyear deal in 2012 that offered more N.B.A. content to Chinese homes, it is unlikely ever to be as lucrative as the league’s American deal, an eight-year, $7.4 billion contract that expires in 2016.

So the N.B.A. has largely had to rely on licensing and marketing deals. There are the digital operations, including partnerships with the Chinese Internet giants Sina Corporation and Tencent Holdings that provide live streams of games, and a popular online store on Alibaba’s Tmall site.

It is building the N.B.A. Training Center, a $1.5 billion, 130,000-square-foot structure near Beijing set to open next year. The center will include a restaurant, merchandise store, fitness center and multiple full-size basketball courts.

“They have a very strong presence on the ground in China, but their biggest obstacle has been the state-owned media market, and that the China sports industry is state-controlled,” said Terry Rhoads, whom Nike hired as its first marketing employee in China in 1994 and who now runs his own sports marketing agency. “But things are improving. China loves basketball too much to deny the N.B.A.”

The league has also secured licensing deals with major companies. Anheuser-Busch InBev, which owns the Harbin beer brand in China, has N.B.A. logos on its Harbin bottles. They are also emblazoned on Mengniu Milk.

“They’ve been making a lot of money from licensing its logo to a large variety of companies, and these products do very well because Chinese fans know the N.B.A. is the highest level of what they do, and not many brands can say that,” said Matt Beyer, who holds a government-certified sports agent license.