Economy

Markets

Industries

Insights

Reports

Events

Chinese group buys stake in US basketball team

(China Daily/AP)
Updated: 2009-05-26 08:14

The Cleveland Cavaliers have signed an agreement with an investment group from China to become minority owners of the NBA franchise and its arena, a partnership that could impact superstar LeBron James' future with the team.

The Asian conglomerate, which includes Huang Jianhua, a Chinese businessman who has brokered sponsorship deals with the New York Yankees and other sports franchises in the US, could acquire up to 15 percent of Cavaliers Operating Company, the entity that owns the team and operates Quicken Loans Arena.

The league's board of governors must approve the deal, completed in recent days.

Team President Len Komoroski said on Sunday the group approached Cavs principal owner Dan Gilbert about the partnership and called the business venture "an exciting new opportunity".

Gilbert's role in overseeing the organization and 20,000-seat arena will not be affected by the new partners.

Citing multiple unnamed sources, the Cleveland Plain Dealer first reported the sides had a tentative deal in place. But in recent days, paperwork was completed between Gilbert and the consortium. It will now be sent to the league office for approval.

With an eye on spreading the game on a global scale, the NBA has been quietly pushing for an international group to become involved in ownership on a minority level. And with a huge fan base already in China - mainly because of Houston All-Star Yao Ming -- the league has entered into several ventures with the nation to develop players and build arenas to NBA specifications.

Huang and others in the group attended Games 1 and 2 of the Eastern Conference finals in Cleveland. On Friday, they sat courtside and watched James hit a game-winning 3-pointer in the final second to give the Cavaliers a 96-95 win and even the best-of-seven series.

Related readings:  China investors in deal for stake in NBA Cavaliers  Basketball proves to be a net success  Basketball: NBA plan huge arenas in China

If approved, the deal would provide marketing opportunities for the Cavaliers and James, who is eligible to become a free agent in the summer of 2010. The 24-year-old MVP, who is already among the league's most popular players in Asia, has stated he wants to become the first billionaire athlete. Playing for a team with Chinese business partners could enhance his brand overseas.

There has been ongoing speculation that James will leave Cleveland to play in a larger market like New York or Los Angeles because of the vast business opportunities. But James -- and his corporate sponsors like Nike -- have broader goals and may be able to attain them by tapping into China's colossal consumer marketplace without him ever leaving Cleveland.

James has never given any indication he wants to leave the Cavaliers, who drafted the Akron, Ohio, native with the No 1 overall pick in 2003. He won a gold medal with the US team last summer at the Beijing Games and has made four trips to China, including one with the Cavs during the preseason two years ago.

"It's a big market," James said before Game 3. "They love the game of basketball. I've been over there the last four or five summers. It should be good. It should be fun."

Gilbert has been approached by outside investors in the past, but his original business group has mostly remained intact since he bought the Cavaliers and the rights to operate their arena for $375 million from former majority owner Gordon Gund in 2004.

Gilbert purchased the team with several other investors, including longtime business partner David Katzman, R&B superstar Usher and others. Gund maintained partial ownership.

However, in the past two years, Katzman has decided to focus on other business interests and the Chinese group would essentially take over his percentage of the Cavs.