The Global NBA
By Wilson Guaraca
Under David Stern, the NBA has become a rapidly expanding enterprise that targets various emerging economies. China has emerged as one of the most appealing markets because of the 1.3 billion people living in the country, 300 million play basketball. In 2009 the NBA profited more $70 million from the Chinese market, making it the second largest market for the NBA. Another market that has caught the attention of the NBA is India, which has an estimated population of 1.1 billion. When comparing India and China there are clear differences stemming from both government and monetary policies that the NBA must take into consideration as they increase investment.
Throughout China’s history the government has focused on building key infrastructure that has fostered the development and trade of manufactured products, and this has been key to China’s emergence as one of the main engines of world growth. It is clear that the NBA has been able to capitalize on this opportunity. In contrast, India’s economy has been defined by IT outsourcing of services and software, which do not require huge investments nor economics of scale. China’s large manufacturing sector has increased consumer spending, hence creating a large middle class. India is different because the IT industry has created a large gap between those who are highly educated, who have most of the spending power in the country, and those that belong to the lower class who are all going after low skilled jobs that are for the most part non-exist in the country and pay low wages. India’s small middle class will present itself as a major obstacle for the NBA. In China expect the NBA to encounter problems concerning government policies and regulations. These markets present themselves as huge revenue streams but due diligence is important every step of the way.
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