The National Basketball Association stands to benefit from China’s stimulus package as cities approach the North American league to help run new sports arenas, the NBA’s top official in China said.
China’s 4 trillion yuan ($585 billion) of extra spending, announced in November, includes boosts for cultural and sports- related infrastructure. That’s prompting local governments to sound out the NBA about managing future stadiums, said Tim Chen, NBA China’s chief executive officer.
The NBA last year formed a venture with AEG, a unit of Anschutz Co., to design, market and operate U.S.-style arenas in China, including an 18,000-seat entertainment center in Shanghai that will open within a year. Chen said four or five other cities “at least” are also interested.
“The interest is still very strong with the stimulus package, the interest did not go down,” Chen said in an interview in Beijing. “Our issue is how to get the joint venture to step up quickly to handle all these.”
The NBA and AEG also are refurbishing the Wukesong arena, which staged the Beijing Olympics basketball competition and will reopen by August.
China is boosting spending to try to counter a slowdown in the world’s third-biggest economy after exports collapsed. Chen declined to identify the cities, saying they were “large provincial capitals in the coastal areas and other regions.”
‘Not Just Sports’
“A lot of infrastructure is being built and a lot of governments are looking at building arenas, not just for sports, but for culture and entertainment,” said Chen, who ran Microsoft Corp. in China before joining the basketball league in 2007. “All in all, we’re still pretty positive.”
Legend Holdings Ltd., an NBA China shareholder and parent of personal-computer maker Lenovo Group Ltd., is expecting basketball-related business to pick up, said John Zhao, a Legend vice president.
“We’re not seeing what we worried about earlier, deep declines,” Zhao said in an interview in Beijing. “Part of NBA China’s business relies on stadiums, stores, the infrastructure building. That pace won’t slow down but probably will accelerate.”
China’s spending will help its economy overcome the global recession sooner than the U.S. and other countries, investor Jim Rogers said in a Bloomberg TV interview. China is “spending the money on the right things” that will make the nation more efficient and competitive, said Rogers, the author of “A Bull in China: Investing Profitably in the World’s Greatest Market.”
New Stores
The NBA opened its first two merchandise stores in Beijing last year, offering fans branded jerseys, basketballs, shoes and accessories. It plans to start 20 new shops in China this year and recently added one in Shanghai, Chen said. New stores will follow in Beijing, Shanghai, Guangzhou and Changsha.
“Everybody feels it’s a tough year but they’re still growing their stores,” Chen said, referring to the sportswear industry in China. “By and large, the store numbers are growing, the business is growing.”
Walt Disney Co.’s ESPN, Hong Kong mogul Li Ka-Shing, Legend, Bank of China Ltd. and China Merchants Bank Co. agreed to pay $253 million for an 11 percent stake in NBA China in January 2008.
(Source: Bloomberg)
