Silk Road International Blog

China and the NBA, two of my favorite things, are both in the news a lot more than usual this month.

First, I’m really not understanding the logic of the purchase of part of the Cleveland Cavilers by a Chinese group.

One of the reasons that the Chinese investment was thought to be a good idea, or at least the Chinese investment fuel the speculation, was that a Yao trade to Cleveland was in the works. But now that’s forever dead with the sad news that Yao may be gone from pro ball for good.

Of course the addition of Shaq does a lot for the marketability of the Cav’s over the next 11 months.

I’ve seen Yao play at least 5-6 times and he really is a freak of nature—someone that large, playing that much and moving that well. Really amazing. None of the other Chinese ballers can fill his public or professional shoes. I hope, for his own sake, that he can make some sort of comeback. But if he doesn’t more people than just him, the Rockets and the Chinese National team will be hurting.

But back to the purchase at hand, the purchase seems to be a Face move more than a wise investment. (Unless it’s LA, Chicago or Boston, is buying an NBA team ever a good investment?) Here are a couple of reasons why I think they shouldn’t have bought Cleveland.

1. Cleveland is a city of long-term sports losers. No offense, Cleveland. Imagine the Chicago Cubs and the Detroit Lions in the same city. Ok, it’s not that bad, but you get the point. The most famous Cleveland sports moment? The Shot! Yup, the Cav’s losing to MJ. How many Chinese investors know about this history? But they should—that’s what they are buying into. It’s like the question that Bill Simmons always asks: “Why would you own a basketball team if you’re not going to try to win?!”
2. Maybe it’s still speculation at this point, but who believes that LBJ is going to be in Cleveland for more than another year? Anyone outside of Cleveland? So once he’s gone…what are you buying? How well do you think a Zydrunas Ilgauskas jersey is going to sell in China?
3. While LBJ wants to be a global icon, right now he is not even the most popular NBA star in China. He has lower jersey sales and is lower on the most-recognizable-NBA-player lists than Kobe, Yao, and D-Wade (and even MJ is still more recognizable an in more ads). LBJ, like Yao is a freak of nature that Chinese ballers don’t really identify with—they just can’t ever get that big. They all like Kobe, AI, DWade. So why not buy into some marketing opportunities with Yao or Kobe instead? Heck, the Lakers have Sun on their team already—how is some marketing deals with the Lakers not a better investment? And Kobe and the NBA in China are just getting bigger.
4. Buying the Cav’s doesn’t give you direct and/or unlimited access to LBJ, which I assume is the main goal, anyway—especially if he’s not part of the team any more. Why not have LBJ speak for one of your products instead of buying a team (he’s going to leave)? He’s then yours for the length of your contract, rather than his Cav’s contract.
5. Even if LBJ does stay for a few more years, why would an investor want to be a part of the Cav’s organization long term? Did they make money before LBJ? They are not one of the most popular or recognizable teams in US or world sports with or without LBJ. Can they sustain their current level of popularity when he leaves? (No way.) This seams like a quick fix, a short-term flash in the pan, lots of face, but not a very smart long-term investment.
6. I do think that foreign (Chinese) investors in the NBA is a good idea. Like foreign investors buying Euro football teams (Taksin, Man City). But shouldn’t they want to be involved with an NBA team in a city with a large Chinese population or with exceptional popularity in China, or with a history of long-term success and/or name recognition? Why the Cav’s? How much potential is really there?

(Go ahead, my one reader from Cleveland, now it’s your turn. Fire back.)

Then again, maybe just the very fact that there may be more Cavs games on TV in China will affect the future in unknown ways that are bigger than the next 5 year’s of NBA Championships. For example, my 4 year-old son said to me last week that he is “black like Kobe. Not white like you.” I told him he was more yellow (he’s ½ Chinese), like Yao Ming, but he was insistent—“No, I’m black like Kobe.” OK.

This next part has nothing to do with the NBA, but it does relate to foreign business. Yea, I’m reaching.

Anyway, I’ve also been watching a bit more of the beautiful game lately (bummer about the US collapse vs Brazil, no?). Last month while watching a soccer game (RLS beating LA Galaxy) with some friends, a buddy of mine started to list off the reasons that business in Asia is like a soccer game. It was funny, so I took notes (and embellished!).

Now, you’ll have to excuse both of us—while we have both done business here in Asia for more than 10 years, neither of us have every played soccer. But, never afraid about talking about something that I don’t know much about, here is our list of why Soccer is like international business.

1. Fields are different. No Hoosiers measuring tape here. Fields are different sizes, just like the figurative playing fields in business are different. Home field advantage means so much more in soccer and international business than it does in any other US sport. (OK, baseball parks are like this too.)
2. No clear set time—only the ref knows how much stoppage time will be added to the game. Maybe you think you’ve won, only to be told that there’s 3 more minutes—that’s what business in rule-by-law countries is like. Just because you’ve got the most points when time runs out doesn’t mean that the game is over.
3. Fouls are arbitrary. Again, if you’re working anywhere that does not have a very strict and efficient legal system you’re bound to get nailed with arbitrary yellow and red cards.
4. Low chance for a “score.” Lots of fishermen but very little catch. I’m convinced that soccer in the US is not popular for this very reason—there are so many other sports with more scoring opportunities that it’s just not as much bang for the buck.
5. Your can run out of bounds and not get penalized. As someone who loves basketball, this always kills me. The guy with the ball can be out of the field of play and as long as they ball isn’t, it’s OK. How many times in business can you “go outside the lines” and still be allowed to “stay in the game?” The answer? Only in Asia!! I’m equally offended that people with connections can literally go around the game and take home the prize without ever really being on the field.
6. Everyone speaks a different language. Soccer is the world sport, and as such teams are built with players from all other the world. Not even English and Spanish are the lingua franca for teams, refs or FIFA.
7. Everyone has a different style of play and business. In south America it’s all about the long pass and the header into the goal. The Euro leagues are much more about surgical strikes. Asia is about speed (and no defense),
8. Your best players can be bought, traded. What’s the difference between headhunters and scouts? Only the name on the door.
9. High work input, low return. There aren’t very many businesses like the NBA where 50% of your touches turn into points. Most of the time business is a lot of work for a single point—much more like soccer.
10. If you score enough points early the game is won before the game is over. Timing is everything. Being the first one to market can be better than being the best production offering. Maybe you don’t field the best team, but if you score enough points early, it doesn’t matter.
11. All the action is NOT in the score. Best moves do not always result in score in soccer, nor in business. Some of the prettiest plays are the set up and ball movements rather than the goals themselves.

Any other reasons?

Finally, best quote about American soccer: “Never mind startin’ wars, emitting greenhouse gases, wearing fanny packs abroad. If we ever win a global tournament in a sport we barely care about — and can’t even bother to call by its correct name — the rest of the world is going to be seriously annoyed.”

Tags: China, Culture // 1 Comment »