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Twenty years ago, the western world didn’t really think of China as a market.
The country was an asset for the west’s own market, sure, but only for the reason
that it was a large, poor country that could act as a source of low-cost labor.
Today, though, with an economy ten times larger that that of just twenty years ago, the western
world, or at least the properly informed western world, no longer thinks of Chi na as that
poor, low-cost labor asset, but rather as a significant, attractive market itself.
Whereas in the past China made for the west, today China is the very market that the western
world focuses their attention on.
With a rapidly growing middle and upper class, businesses around the world have flooded in
to cater to China’s newly wealthy in the same way that they have long served the rich
in the wealthy western world.
Industries ranging from hospitality, to tourism, to e-commerce, to beauty, and more are all
thriving there with both home-grown and foreign-born players establishing their spots in the Chinese
market, but one enormous industry that is still emerging and evolving in the Middle
Kingdom is that of sports.
Sports is a monstrous global industry, but nowhere is that industry more enormous than
in the US.
The NFL, MLB, NBA, and NHL represent the first, second, fourth, and six most valuable sports
leagues in the world and collectively bring in more than $30 billion in annual revenue.
However, American sports are not purely an American industry.
Between merchandizing, league partnerships, TV and streaming rights, and other revenue
streams, American sports leagues actually earn a considerable amount of money outside
of America.
China is a market worth targeting for any business, but it has a particular appeal for
sports leagues.
Beyond its status as a large and relatively recently wealthy nation, China has a government
willing and interested in investing in foreign sports—the kind of foreign sports that would
earn them prestige in international competitions.
Each of the four major American sports leagues are the dominant leagues in the world for
their respective sports, so any interest in each sport will lead to interest in the league.
Consequentially, each league has its own strategy to grow Chinese interest both in their sport
and their league.
Baseball is incredibly popular in nearby Taiwan, South Korea, and Japan, and so there was reason
to believe that the sport could too become popular in China.
Despite this, though, Major League Baseball has demonstrated the least interest in the
market and the market has demonstrated the least interest in the MLB.
The league’s most tangible effort to attract Chinese audiences took place back in 2008
when two pre-season games between the Padres and Dodgers were played in Beijing.
Since then, the history of baseball in China has been fraught with difficulties with their
national league, which operated in cooperation with the American MLB, suspending operations
in 2012, restarting in 2014, suspending operations again in 2016, then starting up again in 2019
with just four teams.
The MLB has also long-operated three, “development centers,” where top Chinese baseball players
are trained, although, none of the players from these centers have ever actually seen
action in the MLB itself.
One can find press release upon press release about different renewed efforts by the MLB
to grow the sport in China, however, all signs indicate that these have not resulted in much.
Evidence of this can be seen on the league’s official Weibo account—one of the top social
networks in China—which has only 650,000 followers.
The story is not markedly different with the NHL, but the history of its efforts is shorter.
It put on exhibition matches between the Kings and Canucks in Shanghai and Beijing in 2017,
then between the Bruins and Flames in Beijing and Shenzhen in 2018.
These games were generally well received and were attended by healthy-sized audiences,
but there was a conspicuous lack of follow-up, with no 2019 games in China, reportedly due
to issues with booking arenas.
Since then, though, they’ve doubled-down, sending Stanley Cup Champion Alex Ovechkin
to the country in summer 2019 to promote the sport, opening an office in Beijing, and hiring
a China marketing head.
Unfortunately for them, though, the little attention China pays to Hockey is not primarily
directed to the NHL.
The second most lucrative Hockey league in the world, the Kontinental Hockey League,
added a Chinese team in 2016—the HC Kunlun Red Star.
This team is no phenomenon yet, with the lowest average game attendance in the league, but
it does mean that a Chinese hockey fan would much more likely pay attention to the KHL
over the NHL.
Still, though, the NHL seems to get somewhat more respectable Chinese engagement—demonstrated
by their just over 1 million fans on Weibo.
American football, though, is where it starts to get interesting.
The NFL has generated a real fanbase among Chinese—not a large one, but it certainly
exists.
This is despite the fact that they are the only of the four leagues that has not played
a game in China.
There is talk of putting one on in the country at the start of the 2020 season, although,
there has been talk before without result.
The real potential for the NFL, though, comes not through in-country games, but rather,
through digital distribution.
Each week, Tencent’s streaming platforms broadcast a number of games, which each have
an average viewership of more than two million people.
That’s despite the awkward broadcast times in the mid-morning, given the time difference.
How much the NFL was paid for these broadcast rights is not publicly known, but with those
kind of numbers, it’s certainly not nothing.
Beyond the league as a whole’s efforts, the New England patriots have put a particular
level of effort into attracting Chinese fans.
A huge benefit for them is that their star, Tom Brady, has been learning and speaks a
rudimentary level of Mandarin.
He hosted a Chinese-language show for the team’s digital channels which attracted
sizable attention—over 15 million total views.
Meanwhile, playing the sport itself is increasingly popular in China.
Having one’s children learn the American sport has emerged as a status symbol, and
120,000 young Chinese have gone to private training camps for American football.
Still, though, the NFL has a long way to go to make China a sizable portion of its business.
On Weibo, for example, it has only attracted slightly more fans than the NHL, at 1.3 million.
The final of these four leagues, though, has turned China into a sizable and now crucial
bit of its business.
Basketball has been played casually in China since the late 1800s when American missionaries
first introduced the sport.
As China liberalized in the latter half of the 20th century, the NBA capitalized on this
and then-commissioner David Stern led an effort to get their games televised in China.
This attracted a moderate fanbase, but the true, pivotal moment happened in 2002.
In that year, a young player from the Shanghai Sharks entered the NBA draft and was picked
first overall—Yao Ming.
He quickly became a sensation and reached the NBA All-Star team eight times, but as
much as he was a sensation in the US, he was just as much or more back home in China.
The number of Chinese NBA fans grew exponentially with every game he played, but eventually,
after a series of injury-plagued seasons, Ming retired in 2011.
At the time, anyone would have assumed that this would have been the end of the NBA’s
rise in China, but as it turned out, this was not the case.
While at first Chinese fans may have tuned in to watch Yao Ming, eventually they just
tuned in to watch the NBA.
In the decade following Ming’s retirement, China grew into an enormous, crucial part
of the NBA’s business, representing more than $500 million a year in revenue.
However, in October 2019, this was all threatened by one tweet containing one image.
It read, “Fight for Freedom, Stand with Hong Kong.”
This was, of course, a reference in support of the widespread protests in Hong Kong, protests
commonly characterized as anti-Beijing, but what’s more important is who this tweet
was by—Daryl Morey, the general manager of the Houston Rockets.
All of a sudden, deals fell apart, relationships were severed, game broadcasts were cancelled—the
NBA’s China market was under threat due to a perception that the league was anti-China.
Unsurprisingly, for business reasons, the NBA quickly issued what was essentially an
apology for this tweet.
Of course, following that, the NBA both faced criticism from China, for the original tweet,
and from the US, for apologizing for that tweet.
Eventually, the scandal largely blew over and relationships started to inch back to
normal, but this was all indicative of a bigger issue with American sports’ expansion into
China.
What these leagues are doing is selling one product to two very different markets.
Worldwide, the entertainment industry, of which sports is a part of, has become increasingly
homogenized with more and more people watching the same TV shows, listening to the same music,
and going to the same movies no matter which country or culture they come from.
China, meanwhile, is different.
Chinese people largely watch different TV shows, listen to different music, and go to
different movies than the rest of us.
A lot of this is because of government censorship and import policy.
For example, there’s a quota allowing only a small number of foreign films into Chinese
cinemas each year.
Sports, though, can’t be treated like the rest of entertainment.
The sports entertainment experience in the 21st century stretches far beyond just the
viewing of actual games.
In fact, watching the games in their entirety is hardly even a requirement anymore.
Sports is an all-encompassing, unscripted, uncensored entertainment experience, and this
is the problem for China.
It can’t just edit out an unflattering aspect of sports in the same way it can with foreign
films.
Sports and politics in the US are intrinsically intertwined.
Many athletes naturally take their place as political activists given their influence,
but this is very different from in China.
In China, sports is a game where athletes go and play, someone wins, and then everyone
goes home.
That’s because, in China, entertainment and politics stay far, far away from each
other, or perhaps more accurately, entertainment and opposition politics stay far, far away
from each other.
American sports will continue their march towards increased relevancy in China as it,
as a country, has an undersaturated spectator sports market.
Meanwhile, though, if these leagues become a true phenomenon in China, they’ll have
to make more tough calls as to whether they want to be a sport league for the US, or for
the world.
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