Last October, the NBA announced it was laying off 80 people in the U.S., about 9% of its workforce, because of the slowing American economy.
About the same time, the league announced a massive program, with AEG, to "design, market, program and operate multi-purpose, NBA-style sports and entertainment arenas in major cities throughout Greater China." The press release also mentioned that "the NBA opened its Hong Kong office in 1992 and currently employs 100 people in four offices in greater China. NBA.com/China has become the most popular sports Web site in China."
Meanwhile, in recent years, shoe companies have increasingly spent their most precious resource -- the off-season free time of their highly paid pitchmen like LeBron James, Kobe Bryant and Chris Paul -- wooing Asian audiences.
It doesn't take an MBA to assess that the powers that be are betting big on international audiences, especially in China.
So, what happens if the single biggest driver of Chinese interest in the NBA is missing from the league, at a time when basketball is desperately in search of revenue?
I mentioned that my friend Max was bitten by a spider, nearly died, and in his recovery had all kinds of interesting thoughts, one of which inspired a post yesterday about NBA players who have played in the most games. (In the comments, IceKeenan wondered: "Dude had a near death experience, and it made him talk about Yao Ming?" In fact, IceKeenan, yes.)
Max asked me yesterday: If Yao Ming misses the entire NBA season, as expected, does that really mess with the NBA's bottom line?
Is there any way to guess what the upcoming season's Yaolessness, due to his recent foot injury, might do to the NBA's popularity in his enormous and important home market?
Renjun Bao covers the NBA for China's Titan Media, and agreed to help shed some light on the issue. In response to my questions, he e-mailed:
Before Yao was drafted in 2002, indeed there were some NBA fans in China. Although I don't have statistics, I guess that the percentage of whole population who paid attention to the NBA was less than five percent. There were no national basketball newspaper at that time. There were three national basketball newspapers and tons of basketball magazines by around 2005.
It is safe to say the major reason is Yao.
Besides the printed media, TV and internet has more and more coverage on Yao, the Rockets and the NBA. Yao became the top celebrity in China and his team, the Rockets, have arguably become the most popular professional team among all sports in China. (That's why many players on that team get endorsement contracts from the Chinese companies.)
In 2008-2009, China Central Television (CCTV, the only state owned national TV in China) broadcast 39 NBA regular season games. 13 featured the Rockets, almost double the second most commonly shown teams, the Lakers and the Cavaliers, who were tied at seven apiece.
Again I don't have official data here, but I think at least 20% of whole population pays attention to the NBA, and I'd guess at least half of them do this because of Yao.
If basketball has not passed soccer to become the No. 1 sport in China, it's getting close. Before 2002, that idea would have sounded ridiculous.
It is not hard to predict that Yao's injury will impact the TV ratings here.
Renjun Bao estimates that the NBA's popularity in China has spread, during Yao's NBA career, from less than 5% to more than 20% of the population. These are guesses. But for the record, approximately 15% of the more than 1.3 billion people living in China would be about 200 million people. Or, roughly double a good TV audience for the Super Bowl. He further estimates that about half of them follow because of Yao Ming.
It's hard to imagine any sports league could cope with losing a Super Bowl's worth of supporters.
The notion that China's love of the NBA was driven mainly by Yao Ming's presence seems unimpeachable. The idea that, now that the NBA is already popular in China, fans might turn away in similar numbers, however, is more complicated.
Renjun Bao says several factors could mitigate a cooling of interest from Chinese sports fans while Yao is sidelined:
There are more and more Chinese elements involved in the NBA besides Yao Ming. Yi Jianlian's popularity will catch up a little bit next season. As you might know, a China born investor became a minor owner of the Cleveland Cavaliers. CCTV is considering airing more Cavs games next season. Shaquille O'Neal, Baron Davis, Jason Kidd ... a lot of NBA players with China endorsement contracts are featured in the commercials on TV in China.
Kobe Bryant and LeBron James are two of the most popular international sports stars in China. All of these will remain despite Yao's injury. As a result, I don't think Yao's injury will bring inevitable damage to this market.
And of course, Yao's injury is not career ending, which will keep a lot of people's spirits up.
Last but not least, the NBA China branch is growing rapidly these days. I am sure they will do what they can to keep the game as popular as ever.
The NBA has shown some signs of feeling an economic pinch. A dip in basketball-related income. New ways for teams to borrow money, facilitated by the League. More teams talking about carrying shorter rosters, to save money.
Many people are looking for signs that such hard times could be coming to an end. A stock market rebound, for instance, could free up resources for owners, sponsors and ticket purchasers alike. Optimism in the real estate market could have a similar effect, as might a return to normalcy in credit markets.
But as far as the NBA is concerned, another key economic indicator to watch for is the return of Yao Ming.