Washington Post Article On Yao, NBA in China

Front page article on Yao and Rockets Popularity.

Yao Holding Court in China
Millions Are Tuning In To See Rockets' Center

By Philip P. Pan
Washington Post Foreign Service
Friday, December 13, 2002; Page A01

BEIJING, Dec. 12 -- On an average weeknight last month, a National Basketball Association game between two strong teams drew a television audience of about 1.1 million households in the United States. On Nov. 20, a Wednesday morning broadcast of a game between the Houston Rockets and one of the league's worst teams, the Cleveland Cavaliers, pulled in 5.5 million viewers in China; another 11.5 million tuned in for a repeat of the game at night.

The main attraction? The Rockets' new center, Yao Ming.

Millions of Chinese, young and old, basketball buffs and novices, are dodging work, skipping class and losing sleep to catch a glimpse of the towering, young Shanghai native who dunked his way out of this country's fledgling basketball league and onto the shimmering stage of the NBA as this year's No. 1 draft pick.

For Western corporations who see China as one of capitalism's last unconquered frontiers and the most tantalizing market on the planet, the Yao phenomenon is a case study in how the sheer scale of the world's most populous nation can offer mind-boggling opportunities and perhaps transform a business overnight if exploited successfully.

It's also the story of how a 7-foot-6, 22-year-old basketball player with a buzz cut and a shy smile has captured the imagination of a complex, fast-changing country consumed by a desire to prove it is a great nation, ready to compete with the world's best in any arena. Yao arrived in Houston this fall as a curiosity but in seven weeks he has emerged as a force on the court, averaging more than 11 points and seven rebounds per game despite limited playing time.

Newspapers have added extra pages for Yao news, analyzing his every rebound, charting his adjustment to American life, even debating whether Chinese authorities will take too much of his four-year, $17.8 million contract. Television stations are showing more NBA games, especially Rockets games, and ratings are skyrocketing. Web sites devoted to Yao have proliferated, and several publications have placed him on their short lists for man of the year honors.

"If Yao Ming's on TV, it doesn't matter what time it is," said Qian Zhaofei, 24, a graduate student in Beijing who runs an Internet site that posts running commentary on Yao games for those who can't get to a television. "If we hear about it, we'll sneak out of the lab and go back to the dorm to watch. We think he's great. We're proud of him."

What makes this hoopla all the more remarkable is that it could just be the beginning. In Houston, the Rockets have distributed Yao growth charts and plastered the city with billboards bearing his image, and ESPN has run commercials showing him dangling out of a tiny bunk bed and performing tai chi with the Rockets' wobbly mascot. But there's none of that yet in China, no Yao T-shirts or jerseys, no product endorsements or ad campaigns. Finding even a poster of him is a challenge.

This yawning gap between Yao's immense popularity and his minimal commercial presence won't last long. The NBA hopes Yao does for basketball in China what Michael Jordan did for the sport in the United States. Businesses around the world are salivating at the chance to use Yao to break into the enormous Chinese market, home to 1.3 billion people with rising average incomes and middle-class aspirations.

Just think: Yao's first game against the Indiana Pacers was available in 287 million Chinese households -- well more than double the number of all TV households in the United States.

"We're being flooded with offers for endorsements, from multinationals, software firms, computer manufacturers, shoe companies, apparel companies. You name it, they all want in," said Zhang Mingji, who heads Team Yao, the group of agents, consultants and others managing the player's business interests. "We don't really need to go out and seek opportunities. So we're taking our time, and being very cautious. Yao has to fit with the companies, and the product has to fit with Yao."

Earlier this year, Team Yao asked a group of business school students at the University of Chicago to study Yao's potential in China. Zhang said the results were more than encouraging: Consumers here have a more positive view of Yao than any other Chinese athlete, and while his fans are concentrated in the cities, they include older and middle-aged residents as well as the young.

"A successful marketing formula is talent plus charisma. I think Yao has as much charisma as anyone in the league. He's good-looking, charming, with a great sense of humor," said Bill Sanders, Yao's marketing director. "If he can match that with his performance on the court, he can become the next Tiger Woods. There are great, great opportunities, so why not shoot for the moon?"

Yao could begin signing endorsement contracts before the year's end, and the first products will be soft drinks, cell phones, computers and credit cards -- all produced by Western companies looking for a piece of the Chinese market, Sanders said. A deal with a major Internet firm in China for an official Yao Ming Web site is also in the works.

Nike already has a contract with Yao, signed years ago when he was just a teenager playing for the Shanghai Sharks. Though the deal expires at the end of the season, the company is planning a new print ad campaign in China built around Yao and has started selling a new Yao sneaker here for nearly $100 a pair -- a month's income for many Chinese.

The NBA is also positioned to prosper if Yao continues playing well. Even before his arrival, its surveys found that nearly three-quarters of all 15-to 24-year-old males in Chinese cities described themselves as NBA fans, and more than half said they watched at least one game each week.

Ren Jiangzhou, a sports producer at China Central Television, said Yao could help basketball overtake soccer as the country's most popular -- and profitable -- sport. For the first time, viewership of NBA games this season rivals and sometimes exceeds that of soccer matches, he said.

According to CSM, a Taylor Nelson Sofres Company, the nation's leading TV ratings firm, more than 6 million Chinese watched Yao's first game, a particularly impressive figure considering it was broadcast live at 8 a.m. on a Thursday. Another 6 million watched a taped repeat of the game the following night.

Overall NBA ratings have more than doubled in China. According to CSM, an average total of 15 million people watched the live morning broadcast and evening repeat of each NBA game on the national sports channel last month, compared with an average total of 6 million last year -- and an average audience of 11 million U.S. households during last season's NBA finals.

"If Yao becomes a star player, the potential is unlimited," said one Western television executive in China. "The impact could be huge for the NBA and for all of the broadcasters."

The NBA signed deals with a record 12 television stations in China this season, up from just one station last year, and it is in negotiations to sign a few more. China Central Television, the national broadcaster, shows two games each week, and the provincial stations show one or two additional games. Chinese sources said the stations each paid $70,000 to $230,000 for broadcast rights, depending on the size of their audience and other factors.

A decade ago, Chinese viewers were lucky to see just one NBA game per week, usually from a month-old tape the NBA mailed to Beijing. Now, the average Chinese viewer can watch four games weekly, and many can catch a fifth game on Hong Kong-based satellite channel Star Sports -- or nearly as many games as are now shown nationally each week in the United States.

Ren said more than 30 of the 84 Houston Rockets games will be broadcast in China, as well as several games with the San Antonio Spurs, the team that signed Chinese player Bateer Menk. But he said the Los Angeles Clippers have been banned from the air, because team member Wang Zhizhi -- who became the first Chinese player to join the NBA last season -- refused to return home for the Asian Games last summer.

"If it were up to us, we'd use even more Rockets games, because the Chinese people want to see Yao, and they think of the Rockets as their own team," Ren said. "But the NBA put a limit on what we could use."

Michael Denzel, managing director of NBA Asia, said the league wants to use the interest in Yao to build interest in all its teams. "We're not the Rockets channel," he said. "Even when the Chicago Bulls were at their peak, we didn't focus exclusively on one team. We're trying to create bounce."

The NBA hopes the Yao bounce will help it move into a market that thus far has been difficult to crack, primarily because distribution networks for sporting goods are weak and commercial piracy is rampant.

Denzel said China's first NBA-branded sneaker, sold by Reebok, went on sale this week, and the association has signed deals with a Chinese travel agency and two magazine publishers. He said the league will open an official website in Chinese soon, and NBA apparel -- including Yao Ming jerseys -- will hit China in the middle of next year, followed eventually by items such as posters and key chains.

Official NBA basketballs, produced by Spalding, are already available in China. Though they cost three times more than Chinese brands, Spalding sells enough of them to make China its largest market outside North American, Denzel said.

"We have a very exciting time for our business in China now, and it's all coming to a head as Yao is emerging as a likely superstar," he said. "We've got more and more sponsors wanting to talk to us about building their brands in China."

Ma Yu, a senior researcher at China's trade ministry, argued all this business means Yao is one of the nation's most important and valuable exports. He said if Yao plays well and the endorsement deals roll in, he could easily end up among China's ten wealthiest individuals, even after the $8 million to $15 million he may have to pay the Shanghai Sharks and Chinese basketball authorities over the next dozen years.

"He's not just a sports phenomenon, or a commercial phenomenon," Ma said. "He's a social phenomenon. He could change China's view of itself, and America's view of China."

But it all depends on how Yao plays. Qian Renmin, a poster vendor in Beijing, said he sells 50 NBA posters every week, but hardly any of Yao. The high school and college students who are his customers still prefer Michael Jordan and Allen Iverson.

"Almost nobody asks to buy Yao Ming posters," he said. "But I think with time, Yao will become more popular. I certainly hope he does, so I can sell more!"