NBA is leagues ahead in sports promotion game(2)

NBA China now has about 130 staffers, with some 100 working at its Beijing headquarters.

In early November, NBA China held a groundbreaking ceremony for the world's first flagship NBA center in Wuqing, a small town some 90 minutes' drive from Beijing. It is a 12,000-square- meter facility due for completion by 2016.

Shoemaker noted that it has six signature elements of the NBA, including official size basketball courts, a state-of-the-art fitness center, a kid's zone and an NBA retail store.

"We wanted to bring everything about the NBA experience, with the exception of the games, to China, and so the NBA center was born," Shoemaker said.

The center is one of the largest projects the NBA has undertaken in China.

Analysts said it's obvious that NBA China wants to build the Wuqing project into a new revenue source in China, but they doubt whether that will happen.

Adam Zhang, chief executive officer of Key-solution Sports Consultant Co, said the NBA is trying to turn its "invisible influence" into tangible projects that generate real money.

"Very likely, the NBA will encounter obstacles because there is no successful precedent for the league running commercial properties or theme parks," Zhang said.

Meanwhile, since few NBA basketball games are actually played in China, the center faces difficulty in drawing steady visitor flows and attracting business partners, he added.

Influential investors

NBA China has attracted influential Chinese investors, including Bank of China Group Investment Ltd and Legend Holdings Ltd, which collectively acquired 6 percent of the company for $138 million.

NBA China has also established diversified business models in China, with television broadcast rights acting as the major sales engine. Digital media, merchandising and sponsorship also all play important roles in driving the company's revenue.

"But we don't overly rely on any one," Shoemaker said. He said that content, both in the TV and digital businesses, is the core of the NBA China's assets and still has the greatest potential.

People can buy NBA merchandise at more than 25,000 retail locations in China. Shoemaker said the company prefers cooperating with reliable partners to sell merchandise, rather than opening up retail stores on its own.

Since China's e-commerce market is growing rapidly, NBA China launched a flagship e-commerce store on Tmall.com in 2012. The league said that the online store has been very successful in enabling fans to buy authentic NBA merchandise.

The NBA, which generated about $5 billion in revenue in 2012, is third among the major North American sports leagues, trailing the National Football League ($9 billion in revenue) and Major League Baseball ($7.5 billion), but it's ahead of the National Hockey League ($3.3 billion).

However, none of the other three leagues has achieved the same success in China as the NBA.