Chinese investor to buy piece of NBA
China’s foreign direct investment in the US may take a sporting turn as a Chinese investor will reportedly purchase a share of a National Basketball Association franchise.
ESPN and the Star Tribune of Minneapolis reported on Tuesday that Shanghai investor Lizhang Jiang, who founded the marketing company Double-Edge Sports in China and recently acquired the Spanish soccer team Granada CF, will take a 5 percent stake in the NBA’s Minnesota Timberwolves. New York real estate developer Meyer Orbach also will become a minority owner with a 9.5 percent stake, according to the Star Tribune.
Double-Edge Sports has a history of collaboration with the NBA. If approved, Jiang would become the first Chinese stakeholder in the NBA.
Paul Swangard, a professor of sports business at the University of Oregon, said Chinese investment in the NBA is the most logical short-term scenario for the US sports marketplace.
“This will absolutely set the stage for more Chinese investment in the future,” Swangard said. “The NBA has been the most aggressive in building a business and fan base in China and has built relationships and trust with Chinese leadership in government and business. I suspect where other leagues would be somewhat cautious to Chinese investment, the NBA sees it as a natural evolution of its globalization efforts.”
“Right now there are more NBA consumers in China than there are people in the US,” David Hollander, a professor of sports management at New York University, said in an interview. “China is essential to the current and future business of the NBA.”
Hollander said that the NBA is more than a popular sport in China. “It has become a pop cultural and lifestyle phenomenon to Chinese youth,” he said. The NBA was the first American professional sports league to bring its game to China in 2004.
In May, NBA China announced that the first NBA Playzone, a basketball-themed family entertainment center, would open in Shanghai this summer. The theme park, centrally located at Xintiandi, is designed to bring the NBA experience to young Chinese fans through a variety of basketball-inspired play areas and activities.
“They didn’t open the first theme park in Los Angeles, Chicago or even New York. They chose China,” noted Hollander.
Jiang would not be the first foreign owner of an NBA team. Russian billionaire Mikhail Prokhorov owns the Brooklyn Nets.
The shares in the Timberwolves are being sold by owner Glen Taylor, who last year had been in negotiations to sell a 30 percent share of the team, but that deal was never completed.
ESPN reported that the sale of the 5 percent share to Jiang would value the Timberwolves at about $1 billion. Forbes estimated Minnesota’s franchise value at $720 million in its annual rankings released earlier this year.
News reports indicate that Jiang is also interested in owning a share of the Women’s National Basketball Association team the Minnesota Lynx.