Sponsorships are major revenue source

Updated: 2014-04-04 11:55

(China Daily USA)

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For NBA China, corporate sponsorships (signage sales) have been a major part of revenue, and throughout the years big multinational corporations such as McDonald's, Budweiser, Coca-Cola and Adidas have used the NBA to expand their market shares in China.

Following the big multinational corporations, some Chinese companies have also jumped on the NBA platform to capture the domestic market in China. NBA China's current major sponsors include AB InBev (Harbin Beer), Adidas, Cathay Financial Group (Taiwan), Gatorade, Mengniu Milk, Nike, PEAK, SAP, Spalding, Sprite and ZTE Mobile. Five of them came from the Chinese mainland or Taiwan.

Chinese companies also have been jumping on the NBA's marketing train for international and US markets by doing national or regional deals with the NBA in the US.

For example, PEAK, a major Chinese shoe manufacturer, first established home-stadium sponsorship with the Rockets at the end of 2005 and still maintains that relationship today. PEAK signed a sponsorship with NBA China for the first time in 2007. According to its company website, PEAK ranks third in NBA endorsements and it has had contracts with nine NBA players to market their shoes through the years.

Another recent example is ZTE USA's deal with the Rockets. On October 5, 2013, the team and Dallas-based ZTE USA, the US branch of the Shenzhen-based Chinese cellphone manufacturer, announced their new partnership, making ZTE the official smartphone of the Rockets.

Cheng Lixin, CEO of ZTE USA, said during a phone interview that after 15 years in the US, the company now wants to be a leader in the US smartphone marketplace and hopes to build its brand awareness by going with the Rockets.

"We are monitoring and reviewing the numbers and we will compare the preseason and after-season data. I am confident we will advance to be the No 3 in market shares in the US from our current No 4 position by year 2016," Cheng said.

According to Cheng, the parent company ZTE Mobile signed a new multiyear marketing partnership with NBA China within two weeks of its Rockets' deal announcement, making ZTE the first-ever presenting partner of an NBA game in China.

"It's a well-thought strategy within the ZTE," said Cheng. ZTE USA will soon launch a new product called "Rockets Phone" with more advanced technology, and ZTE Mobile will also develop an NBA device in China, all in an effort "to reposition and refresh our brand".

Whatever the undisclosed number Cheng is seeing, ZTE USA seems to be quite satisfied with the Rockets partnership; both parties recently renewed the agreement for another year while being less than half a year into their first year.

Even some Chinese governmental agencies look to the NBA for promotion in the US. In 2013-2014 season, the Beijing Municipal Tourism Development Commission contracted with the San Antonio Spurs to promote its tourism by having "Travel to Beijing" ads displayed during its 30 home games. In mid-March, the commission held a special promotional event when the Spurs played the Utah Jazz. It has been doing similar promotions with the NBA since 2009, according to the commission's Vice-Chairman Wang Yue.

(China Daily USA 04/04/2014 page20)