A gigantic marketing coup January 26, 2003 BY GREG COUCH STAFF REPORTER It started as a very tall man with very large feet calling his cousin to ask for help in finding Nikes that fit. Then things started to snowball. In the end, a significant portion of Yao Ming's marketing effort became a class project at the University of Chicago. Really. Today, 7-6 Chinese center Yao Ming and the Houston Rockets will play the Bulls at the United Center. Halfway into his rookie season, Yao already has become one of the most celebrated stars in the NBA, a traveling circus. Chicago has its own little piece of Yao, whose cousin Erik Zhang is a student at the U. of C.'s graduate school of business. The story goes that when Yao was playing for the Shanghai Sharks, he put in a call to Zhang to ask for help in finding shoes. Zhang dribbled out some business advice, and things started to take off. Next thing you knew, John Huizinga, the deputy dean of the business school, was involved. Huizinga, now one of Yao's agents, turned to the school's renowned management laboratories. Jonathan Frenzen, a clinical professor of marketing there, then helped to organize a 10-student class, which became an integral part of Yao's group of advisers, called Team Yao. "We put together a pretty long-term plan,'' said Aaron Abraham, a second-year MBA candidate at the school, who told the story about the shoes. "Part of it was to help define the demand for Yao's brand. We did a lot of research. At the end of the day, some of the things will be accepted and implemented and some won't.'' Because of Yao's early success in the NBA, he quickly is building marketing potential. He is featured in a recently released TV commercial for Apple computers with tiny Verne Troyer, who played Mini-Me in the Austin Powers movies. The two are seated next to each other on an airplane, looking at their laptop computers. Yao's has a 12-inch screen and Troyer's a 17-inch. Mini-Me is watching "Crouching Tiger, Hidden Dragon'' on the big screen, and Yao is jealous. Yao also has a two-year deal with Sorrent Inc., which is developing a Yao computer game for wireless devices. And before he came to the United States, he signed a shoe and apparel deal with Nike. Terms of the deals have remained secret. But Bob Williams, the president of Chicago-based Burns Sports Marketing, estimated the Nike deal to be worth "low seven figures'' a year and the other two deals combined to be worth between $500,000 and $750,000 a year. On top of that, Yao got a four-year, $17.8 million deal from the Rockets. All told, then, he is making roughly $6 million a year. He's getting rich, yes. But maybe not as much as you might think. Estimates are that Yao has to send half of that back to the Chinese government. "The stories were that he had to give so much to the Chinese government, so much to the Chinese Basketball Association and to his old team, the Shanghai Sharks,'' Williams said. "In the end, it only left Yao with about a buck and a half.'' The Rockets paid $350,000 to the Sharks for Yao's rights, the New York Times reported. And the Chinese government and basketball association reportedly will get half of Yao's basketball income and a cut of his endorsements. Still, Yao figures to get at least $3 million a year for himself. Minus taxes. "His endorsement possibilities are limited by his English skills,'' Williams said. "And while the Apple ad works [with Yao not speaking], how many times can you do that? He's still a novelty in this country.'' Williams said that Yao's greatest endorsement potential is in China. And that's where the U. of C. fits in. Yao is managed not only by Huizinga, but also by Bill Duffy, the president of BDA Sports Marketing in Walnut Creek, Calif. But Team Yao turned to Frenzen for help in determining Yao's marketing potential in China. Frenzen and U. of C. colleague Francis Bassolino went to China for two weeks in September and conducted 14 focus groups in five cities. They taped everything and brought it back for the lab to see. Then the class went about trying to determine what Yao's "product'' would be. The thinking, Frenzen and the class thought, was that traditional sports-marketing people look for the biggest dollars for their clients, not for the deals that match the client best. So the goal was to find out why people were excited about Yao, then match that with his personality. Abraham said the findings about Yao are private, but he is seen as an unassuming, respectful, modest player with humor. Frenzen said a handful of U.S. companies looking to market themselves in China already have called to ask the lab for help. And Yao's marketability in China might be on the rise, too. Frenzen said that is a combination of his on-court success and political and social reasons. "People in mainland China are very anxious for Yao to succeed,'' Frenzen said. "A lot of them are afraid he might fail. It wasn't until he found his legs in the NBA that you really found an expressed groundswell for Yao Ming in China. "Can you think of many equivalents, where a Chinese athlete has gone to America and played an American game against the most visible athletes in the world? And think about what's happened in China [politically] over the last 20 years.'' Frenzen said that while China is starting to reach out to global financial markets, Yao has become somewhat of a test balloon. He was told of a bar in Shanghai where Yao's game against Shaquille O'Neal was televised. "When Yao dunked the ball, everyone in the bar was jumping up and down,'' he said. "And that included 70- and 80-year-olds.''
