Cleveland, China, and LeBron
There’s been a lot of developments brewing in the city of Cleveland in the past couple of months, but things weren’t always this way for the place some call the “Forest City”. Before May 22nd 2003, when the Cleveland Cavaliers won the right to the first pick of the NBA draft, Cleveland was a small time team in a small time market most well known for being the background of Michael Jordan’s famous game winners in the Playoffs (The Shot and The Shot II). In fact, the city of Cleveland hasn’t won a major sports title for over 45 years. But the arrival of arguably the most freakish athlete in the history of sports, a local phenom from Akron Ohio, has changed all that in a way that none could have predicted.
This brings us to today and the sudden transformation of a basketball team, a city, and perhaps of the sporting world in general. It all started more than a year ago when Cavaliers Vice-Chairman and part owner David Katzman and his Camelot Venture Group (amidst a business fallout with majority owner Dan Gilbert), decided to sell a part of the Cleveland Cavaliers in China. Prospective buyers were narrowed down, and over the past year negotiations and details have been ironed out. In Mr. Katzman’s own words, the background of the buyer was of importance in making the deal work:
“It was very important to us that whoever acquired our ownership piece be able to add value to the team and also realize the appreciation to the value of the team that was created over the past 4 years.”
This is where Kenny Huang came in, the young, smart, and connected Chinese business man that has as good insight on the China-US business world as you can possibly find. He is the man who has been involved both at home and abroad trying to take advantage of the growth of basketball in Asia and China’s growing sports marketing opportunities. Huang had put together a group of investors several months ago that looked ready to buy a significant stake in the Cavs, but several of the investors have meanwhile changed – prolonging this process longer than expected.
It was announced yesterday that the deal has been finalized with Albert Hung (Hung Chao Hong), one of the richest man in Hong Kong, as the primary financier of the deal – making him the first Chinese owner of an American sports franchise. The Cleveland Cavaliers are valued around $475 million by Forbes, which would mean that Albert Hung will pay out a sum near $60 million in cash to acquire the rights to 15% of the Cleveland Cavaliers from David Katzman.
Unlike New Jersey’s soon to be new Russian owner and controversial figure Mikhail Prokhorov, Albert Hung is the ideal owner for an NBA franchise. As Cleveland.com reports:
Hung is a member of numerous powerful groups and committees including: the Standing Committee of National Chinese People’s Political Consultative Conference, the Vice President of China Sports Foundation, Vice Chairman of Major Sports Events Committee, the President of All Stars Sports Association Ltd. of Hong Kong, and Vice President and Director of the South China Athletic Association.
Perhaps his most valuable political affiliation is with the Hong Kong Selection Committee, which is the group that elects the chief executive of the massive Asian commerce and cultural hub.
If there were those wondering what kind of business opportunities and synergy this sort of deal would open up, few precious hours were wasted answering such concerns. Tsingtao, China’s most popular beer and also most well known international brand, has just signed a multi-year partnership with the Quicken Loans Arena and the Cleveland Cavaliers. The partnership will no doubt increase Tsingtao’s image and reputation in international markets as well as strengthening it’s brand back on home soil. Millions of basketball fans will be able to see Tsingtao billboards and ads plastered around the stadium through the 34 Cavs games scheduled to broadcast in China during the 09-10 NBA season. Further details of the deal include:
In addition to being the exclusive Chinese beer of Quicken Loans Arena, the Tsingtao partnership elements include:
As can be seen, the Cleveland Cavaliers are well on their way to an exciting journey along with their Chinese business owners. The opportunities and potential out there is immense and the pieces have already started moving. One major determinant of the success of the Cleveland Cavaliers will no doubt be LeBron James himself. LeBron’s free agency tales have been a topic of discussion forever it seems, or at least ever since he set foot into an NBA arena. If LeBron’s actions are anything to go by, it seems that there is some legitimate threat that the King could leave the Cavaliers at the end of this season and go somewhere like New York where the lights shine brighter, and the audience is more befitting for a King.
This seemed plausible … until the recent Chinese invasion of Cleveland. While New York and the Madison Square Garden might have been the grandest of stages before, that has been surpassed today with the possibility of playing on aged Chinese TV sets across China’s provinces becoming a far more appealing prospect – particularly for an athlete that’s primary goal (besides Championships) is to be the world’s first sports billionaire. As it looks now, with the Cavs built to contend for years, the Knicks on a hopeless path down mediocracy, and the “Chinalization” of the Cavaliers – it would be foolish for LeBron to go anywhere.
This is the story of how a troubled sporting city in the middle of the United States was first saved by a King and then by the Middle Kingdom. This story, has just begun.
[...] NBA in China blog did a writeup of Hung, stating “Hung is a member of numerous powerful groups and [...]
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