Tuesday, December 15, 2009

Just how smart is he?

Kenny Huang, the Chinese investor who owns 15% of the Cavaliers:

By the end of the year, Huang will likely finish another deal, completing the purchase of a 15 percent stake in the Cavs, representing the first major investment by the Chinese in American pro sports. That ownership deal, signed in May during the Eastern Conference Finals, will sell former Cavs Vice Chairman David Katzman's 15 percent to a group led by Huang.

The NBA Board of Governors is expected to approve the purchase soon. Though no figures have been disclosed, Katzman's stake was worth around $56 million when he partnered with Dan Gilbert to buy the Cavs in 2005. Based on the team's current estimated value, which is $476 million according to Forbes magazine, the share could now be worth as much as $70 million."[Gilbert] is a very smart guy, I like smart businessmen," Huang said in his first American interview since forming the agreement to purchase a stake in the Cavs. "I think we'll be good partners.
For instance, he is so smart that he got you to buy a stake in a franchise that could very well be LeBron-less in 8 months? That $476 million franchise could take quite a hit pretty soon.

Huang has big plans for LeBron and the Cavs:

Huang said interest in the Cavs has exploded in China and they have surpassed the Houston Rockets, who have Chinese national hero Yao Ming, in popularity. The Cavs are second to only the Los Angeles Lakers in overall profile. This year there will be 34 games broadcast on Chinese television and there are Chinese media members based in Cleveland who cover the team.

Tsingtao is buying into that, spending to appeal to Chinese fans watching the games in addition to the American fans. For the last month there has been a Tsingtao billboard on one of the basket standards at The Q and fans will notice more signage soon. The beer is being sold at the arena.

"There's going to be more similar-sized deals to come," said Huang, whose has also arranged sponsor deals with the Rockets and New York Yankees in the past.

"This is a very small piece of all the business activities going on China right now and investment in foreign teams are part of the many possibilities that are happening. It isn't a must-do deal, but it is a trend of businesses investing outside of China."

Perhaps soon, if things fall into place as Huang believes, they'll be investing in James as well. At least in China's eyes, James could have more fans playing in Cleveland with a high-profile team, than about anywhere else.

"He can be a superstar in China with the Cavs," Huang said. "He's got the potential to have more Chinese fans and become more popular in China."

Why is that exactly? Any team that LeBron James suits up for will be "high-profile". It doesn't matter if it's in Cleveland, New York City or Sacramento.

Now, I don't want to dismiss this new ownership group. I'm sure having a foothold in China could really benefit both the Cavs and LeBron. If James wants to be a 'global icon' then having ownership with a base in China would certainly help.

However, it's not like having a Chinese part-owner is the only way for LeBron to expand his brand in the Chinese market. I'm sure Nike could hook him with a few people over there.

Will the new ownership help the Cavs' chances of keeping James? Who knows, but it couldn't hurt. It really all depends on what LeBron wants. If he wants the lights of NYC, then the Cavs can't really do all that much. But if he wants to win (in his hometown) with an owner that is willing to go the extra mile (and a part owner that could boost his Chinese profile) then the Cavs are in good shape.

No comments: