Panel Discussion: How to exploit the commercial value of Chinese basketball market?

‍‍China Basketball Summit 2015 has been held in Shanghai Marriott Hotel Luwan from December 10 to December 11. The summit has been attended by members of media, excutives of sports companies and representatives from NGOs. As a co-organizer of the summit, Yutang Sports was able to moderate the panel discussion "How to exploit the commercial value of Chinese basketball market?"‍‍

Moderator: Li Jiang, Co Founder and Executive Director, Yutang Sports

Panelists:  Thomas  McCarthy, Chairman, Beijing International Group

                 Wang Fei, Chairman, Wang Fei Sports Club

                 Winston Zheng, President, Chang Shi Sky Sports Tech Company Ltd.

Li Jiang: Last year, the State Council announced a guideline (“No. 46 Guideline”) to boost China’s sports industry. After that, many giants have shown their passion for sports business…increased copyright prices, the exciting AFC Asian Cup, the eye-catching CBA and NBA matches, the success in biding for 2019 FIBA World Cup. As we know, with the booming of sports industry, basketball will become more popurlar in China. 

There is one important question. How to exploit the commercial value of Chinese basketball market? Of course, we should focus on popularity, fans’ engagement, and high ratings. But how to make all of the participants-investors, sponsors, clubs, and fans benefit from it? What is expected from the youth basketball training market?

With the launch of the Guidelines, China has seen a dramatic change in the sport market. As we learn from the marketing theory, the development of an industry depends on the industry environment. So how do you think about the sport environment in China? What about the future of sport industry in China? 

Thomas  McCarthy: The NBA is not China basketball. The NBA is here to help support and develop China basketball. So if the emphasis is always on NBA, how does one build the pride to pick the sport to the next step. There is no question that the market is here.

In 2002, there were 300 million people playing basketball here. It is 14 years ago, we’re still talking about the same number. But whether 300 million or 400 million, that’s an awful big market to a rapid development. 

The second thing is, you basically cannot get any more television for basketball you have right now. So from the media standpoint, you’ve got to build the floor before you build the roof.

The fact of matter lies in the development of cultures not in the development of the employers. Because every culture can touch as many as employers as physically can handle. 

And those league cultures can develop a system of cultures whether they be inside or outside the school system, they can then touch many more hundreds and thousands of employees to develop this sport, the loyalty. When I see the CBA league, I see a couple of things: the television is there. But how many shirts of the Shanghai Sharks, if you walk down the street in Shanghai on a summer day, would you see children wear? Not many.

Where is the fan loyalty to the team? Because even the NBA would have met the question. Not many people buy pure NBA power, they buy a team pack. If you could get the loyalty to the team, the league can do so much. The team is our key marketing director, is our direct promotion. How many does the coach are going to the school to teach? Not many. 

We missed the important part-the Chinese. Because at the end of the day, it’s the Chinese Chinese. If you could build your own, don’t expect others to build for you. You need to have schools and universities that teach people the business of the sport. So that’s one question.

Li Jiang: Thank you very much, Thomas. As you mentioned, fan loyalty is very important for a basketball team. Many fans don’t buy the shirts of their favorite teams. This is a question in China. 

More importantly, we need our own content, including reports about NBA. Plus, in Chinese sports market, we need a youth training system. In terms of this issue, Wang Fei has a 12-year experience of youth training. I really appreciate your hard work and passion for Chinese basketball. 

The fact is, big money is always invested in foreign events, not in Chinese events. So what kind of environment do we need for basketball investment? What is most impressive for you during the 12 years’ youth training career?

Wang Fei: During my 12-year career, I believe the basic environment is very important for the sports industry. This is what decides the participants. How much do you like the sport? I think this is what decides the market. Of course, there are barriers and confusions, as I said this morning. But in the 12 years, we have tried our best to better the industry, to develop the basic environment, to encourage those who love basketball. Sport is an all-round issue, but for me, this is very important. 

Li Jiang: In fact, youth training is absolutely a big challege. A well-established training system comes from great venues and great coaches. You need enrollment. You need promotion. You need money. Then how do you make it? After all, it’s 12 years.

Wang Fei: We just do what we can. Of course, we need to focus more on advertising and promotion. We welcome partners to help us in the future. We have met many difficulties, not only about the money, but also from the policy. For example, we have moved from Beijing to Zhuozhou in Hebei Province , for better managing the students registration. 

I keep going in the career because I love it. Thomas knows me. I am a very pure basketball man. When I was coaching, our team have won four CBA championships. But for me, it's not a big deal, and it will be a pity for my career and for China, the great country if Chinese basketball cannot become stronger in the world market. 

Li Jiang: Thank you very much. Your career is so impressive. When Yutang Sports releases news stories, we find that almost everyone throw big money and wants more money from the industry. But as Thomas said, we have to build the floor before we build the roof. 

So culture is the key. Then what’s the core culture of basketball? How about the core culture of sports? Winston, you worked as President in Infront China, and have done a lot of work in sports management. So What’s your opinion about CBA? 

Winston Zheng: As John F. Kennedy said, don't ask what your country can do for you, but what you can do for your country. When I was in Infront China, I was able to learn something about CBA. For example, Lining once was the major sponsor of CBA league. When the sponsor left in the end, we should ask ourselves what we have done for the sponsor. In other words, we need to be responsible for our job.

China basketball and China sports have something in common. For example, there are so few youth training agencies. People care more about the enrollment quotas. Kids don’t have time for sports training. I have heard a rediculous story. It is said that kids in some school are not allowed to play on the playground in case that they may get injured. 

Instinctly, most kids love sports. They should be given more room for teamwork training and sports spirits. Don’t care much about whether they win or lose, but whether they have tried. 

After the launch of the No.46 Guidelines, many companies are actively expanding their overseas sports business. However, I see few investors are interested in domestic projects like Wang Fei’s training camps.

As Thomas said, we hope that our sports managers, our schools will teach more employees and students how to sell tickets, how to serve sponsors and how to organize an event.

Li Jiang: Thank you, Winston. From the basketball market this year, we find that CBA league is an important signal for sports industry in China. Thomas, you have a rich experience in events operation, and as we know, you are a board member of United States Basketball Academy (USBA). In your opinion, compared with USA, if we want to improve the operation of CBA clubs, what efforts should be made? 

Thomas  McCarthy: From the club standpoint, I get back to what I have mentioned earlier. You have to dedicate to staff understandings, things like real marketing promotion, like finace experience in a way that will build brand loyalty. Because the club has to be looked like that, just like Spalding developed their brand first.

You have to look at the basketball club the same way. You have a brand. People have to know your brand. They get to believe in your brand. And use yourself as a brand to present yourself with quality, integrity and repect for those you want your brand to integrate with.

No. 2, you have to develop quality product. You won’t win every year. That’s why sports are so interesting. You never know who’s got to win the next day. So the quality of your product is every consistency of developing and providing to the people follow you. 

No. 1, your efforts, your hard work. We try to do the best as we can. We try to present you in the best way. So from the Beijing Duck to Shanghai Sharks, whoever, that’s what I want to be. We look at the NBA this morning, junior NBA, NBA kids, NBA global games, why not Chinese global games?

The university has to work with the professional club to develop management business, marketing skills, promotion skills, facility running skills, coaching skills. It’s a job. Someboday has to be proffessional. You have very few leagues here. These leagues are in every coner in the United States. That’s why you cannot compare, because they are playing all the time.

Li Jiang: Thank you, Thomas. And Wang Fei, you have coached in the Bayi team, then what’s your opinion about the operation of CBA clubs?

Wang Fei: Actually, I have never operated a club. That’s not my profession. But for what I’ve seen, CBA teams haven’t made much money from the sponsorships. I agree with Thomas, clubs need to build their own cultures and promote their brands. I have coached in three clubs. In terms of this issue, they didn’t pay much attention to club promotion, operation skills and company culture, as Thomas mentioned. We need to get together to make people love professional clubs, and love our players. We need to improve fans’ engagement, to launch more products.

Li Jiang: Thank you, Wang Fei. In my opinion, a well-established system is stronger than an individual or even a team. For example, China Media Capital has just invested in City Football Group. This is a system of sports marketing. I believe things like that are very helpful for Chinese sports market. 

Note: This article is an abridged one from the original discussion. Remarks of Li Jiang, Wang Fei and Winston Zheng are translated from Chinese.