Chinese investors close to purchasing share of Cleveland Cavaliers
by Brian Windhorst/Plain Dealer Reporter
Saturday May 23, 2009, 11:31 PM
CLEVELAND, Ohio -- The Cavaliers already have a global star. A clutch-shooting global star at that. Soon they may have a global partner that could help secure that global star's future in Cleveland.
According to multiple sources within the Cavs, franchise majority owner Dan Gilbert hasa tentative agreement in place to allow a group of Chinese investors to purchase a significant stake in the Cavaliers Operating Company, the entity that owns the Cavs and operates Quicken Loans Arena. The group is led by JianHua (Kenny) Huang, a Chinese businessman who has become successful by linking American and Chinese companies.
Huang and several of his partners were in Cleveland and attended Games 1 and 2 of the Eastern Conference finals this week. He sat in Gilbert's courtside box Friday night and watched LeBron James hit a buzzer-beating 3-pointer to even the series with the Orlando Magic at one game apiece.
"Dan Gilbert has been approached multiple times over the past few years by investors that wanted to join the Cavs' ownership group," said Len Komoroski, Cavs and Quicken Loans Arena president said in a statement.
"This has recently happened again. As has been done previously, we're in the process of reviewing the possibility presented to us. Beyond that, we do not feel it would be appropriate to give further comment at this time."
Calls to Huang's company were not returned.
The direct impact of the move is securing the future of the franchise, which has been in a minority ownership flux for the last couple years as it loses millions in attempting to build a championship-quality team around James. It will not only mean an injection of capital but will open the Cavs to business in China. The move, which has been kept mostly secret in America, is being supported by the NBA as they have encouraged development in China.
The other effect, which is surely the more interesting side to Cavs fans, is how vital this new link could be for James -- providing a huge tie-in with an economy James is eager to tap.
Any team ownership transfer of more than five percent must be voted on by the NBA's Board of Governors following background and financial checks. If the deal comes to fruition and is approved by team owners, it could help to remarkably strengthen James' relationship with the Chinese fans and consumers that he's been working to reach for the last four years.
Huang, who has been working with the Cavs for the last two years in securing Chinese sponsorship through one of this companies, would represent a direct link between hundreds of millions of Chinese basketball fans and James. If the deal comes off, Chinese fans could start to feel a connection to James and it could expand his business interests by remaining with the Cavs past next season when his contract with the team expires.
In other words, there is great potential in being with a franchise that has a deep relationship to China -- likely even more so than just playing in the largest market in America. There has been intense speculation that James will be attracted to playing in New York because of the business opportunities.
"You have to think globally," James said recently of his business interests. "I have a lot of fans in China and they're important to me."
James and Nike, by far his largest sponsor, have been on a mission to create a bond with the Chinese over the last three years in the run-up to the Beijing Olympics. James has made four visits to China, one with the Cavs as part of a preseason trip in 2007.
With basketball exploding in popularity among millions of young Chinese with exponentially growing buying power, James has targeted opportunities in the Far East to make the same kind of marketing impact in modern China that Michael Jordan had in the United States in the 1980s and 1990s. Only the market there operates on a dramatically larger scale.
Becoming the Jordan of China from a marketing standpoint would allow James to reach his goal of someday becoming the first billionaire athlete.
Over the last few years James has been lagging behind more established stars like Kobe Bryant and even Tracy McGrady, a teammate of China's national hero Yao Ming of the Houston Rockets, in Chinese popularity.
But his Most Valuable Player Award -- an honor that brought Bryant to the top of the list in Chinese jersey sales within the last year -- has gotten James huge attention. With increased interest with this deal, James could be in position to surge ahead.
Huang has a chance to play a large role in it and profit as well, which is seemingly why he's focused on getting a piece of James and the Cavs now. Huang is part of at least two groups that specialize and creating partnerships between American and Chinese companies.
As a partner in Sportscorp China, which has a U.S. base in Chicago with well-known sports consultant Marc Ganis, Haung became a leading dealmaker with pro sports teams. He's worked deals with the New York Yankees, the Houston Rockets and USA Basketball by creating deals with Chinese sponsors.
Fans watching Cavs games this season may have noticed Chinese characters on scorer's table advertisements during some games. Those were there specifically for the Chinese market in games that were being broadcast in China to millions and millions of viewers. Huang helped set those deals up.
In Chinese business culture, sponsor relationships will often open the door to other business opportunities. Huang -- who is a native of Guangzhou, China, and holds degrees from Columbia University, St. John's University and New York University -- has been able to extend sponsor deals investments. According to the Sports Business Journal, Huang and Ganis' Sportscorp has set up at least six American pro sports team owners with lucrative Chinese initial public stock offerings.
For example, he helped Houston Rockets owner Les Alexander invest $30 million in a Chinese athletic apparel company several years ago. The investment jumped 42 percent within days of the stock's release.
Huang is also has been a director of the Aspen Infrastructure Investment Corporation, a U.S.-based group that Huang has led into investments in expansion of Chinese roads and utilities. It is following the same path of linking money on both sides of the Pacific into growth areas -- be it the Cavs, the Yankees or various budding Chinese corporate giants.
Gilbert has been approached by foreign investors several times over the last few years. In several interviews last year, NBA Commissioner David Stern predicted there would be ownership by an international group in the near future. The global economic slowdown has affected those projections.
Despite being the Cavs' majority owner, Gilbert's ownership team is perhaps not what he thought it would be when he purchased the club, its debt and the rights to run The Q for $375 million in 2005. At the time, former majority owner Gordon Gund and Gilbert's cousin and longtime business parnter David Katzman were believed to have taken a combined ownership stake of more than 30 percent. Gilbert also had a deal to sell a piece of the team to music star and actor Usher Raymond IV.
But over the last several years things have changed. Gund has begun to pull back on his desire to remain a part owner and focus on his foundation, the Foundation Fighting Blindness. He's already reduced his stake in the team from the initial investment.
Usher remains a part owner, but did not invest the amount he and Gilbert agreed to at the beginning and has taken a low profile after being on the dais with Gilbert, Katzman and Gund on March 1, 2005, the day the ownership transfer took place.
Over the last two years, Katzman and Gilbert have seen some of their business interests go in different directions. Katzman was previously listed in the team media guide as vice chairman, but he was removed last year. Katzman has come to only a few games all season.
In an interview with The Plain Dealer in March, Gilbert said Katzman's role was "the same" and he isn't "as visible because he was involved in some other ventures."
Over the last four years, the Cavs have spent around $20 million in upgrades to The Q, invested $25 million in a practice facility in Independence and spent wildly on players. The Cavs have paid the luxury tax in each of the last two seasons and this year will commit to more than $100 million in payroll and taxes.
Even with record-shattering revenue -- including one of the most rewarding local television deals in the NBA despite being in the 17th-largest market -- the Cavs are still believed to be losing millions. Their current owners are also heavily invested in industries that have suffered losses over the last two years.
The Cavs ownership group currently consists of three faces. Coach Mike Brown now routinely refers to the team's "three owners" which include Gilbert, Jeff Cohen and Nate Forbes. Cohen is a wealthy builder of homes and commercial properties in Michigan and Florida. Forbes is a Detroit-based mall developer. Gilbert made his fortune mostly in mortgages.
There are other partners, but those three sit together at nearly every Cavs game and are close to players and coaches.
On Friday before Game 2, Cavs General Manager Danny Ferry, Cohen and Forbes spent time showing Huang, Ganis and some other investors around The Q. Soon they could be regulars.
well if the cavs are bought up by these chinese investors, 240 might be right
he wants out of Cleveland. Even if he wins a ring, he's skipping town.when did Lebron tell you this ???
It will be LA/Cleveland finals.
The NBA will make sure of it.
will that guy with #23 stay in Cleveland. Please God dont let him go to NY. He'll be on every channel for the next 10 yrs with the NBA selling their crap. This isnt a big request to block any potential NY deal. :-\they gotta get past Orlando first, crazy thing is that Lebron nearly had a triple double last night with 41 points AND DIDN'T MAKE ONE JUMP SHOT!! :o
they gotta get past Orlando first, crazy thing is that Lebron nearly had a triple double last night with 41 points AND DIDN'T MAKE ONE JUMP SHOT!! :o
top the Lakers? they arent even going to top the Magic.
Refs were on lebron's side last night.Lebron is more than good enough, his TEAM isn't, the guy had 44 points and 12 rebounds last night, the guy scores 48% of their total points almost every night.
him getting a tic-tac foul with .5 seconds left - then Dwight howard getting leveled at the end with no whistle.
They want a lebron/kobe final. And lebron isn't good enough yet.
no he wont go to ny. And i can tell you as a knicks fan, every single one of us does not want him here.
there will be a shitload of fa's in 2010 to pick up
Refs were on lebron's side last night.
him getting a tic-tac foul with .5 seconds left - then Dwight howard getting leveled at the end with no whistle.
They want a lebron/kobe final. And lebron isn't good enough yet.
the final play was a clean one... could of gone both ways..but the refs made a good callLebron and Howard BOTH get calls, they're BOTH superstars so it evens out, i've seen some ticky tack shit being called and some big time no calls as well, Charles Barkley said it right, the officiating sucks.
Lebron and Howard BOTH get calls, they're BOTH superstars so it evens out, i've seen some ticky tack shit being called and some big time no calls as well, Charles Barkley said it right, the officiating sucks.
Barkley is great he ALWAYS speaks his mind and usually its the truth
Lebron is more than good enough, his TEAM isn't, the guy had 44 points and 12 rebounds last night, the guy scores 48% of their total points almost every night.
Orlando Vs Denver in the finals - I wonder how David Stern and the NBA brass feel about this matchup? Not exactly what they are needing right now with the league floundering financially.
Howard vs Melo isn't exactly chopped liver.
It's the Vitamin Water guys who look like idiots. lol
who's going to watch? rating in the toilet for that match. nba will try to pull strings to have cleveland make a 3 game run. anyway...i hope they do so he stays in cleveland.
Howard vs Melo isn't exactly chopped liver.
It's the Vitamin Water guys who look like idiots. lol
I gotta say, this has been a very good playoff season by NBA standards. Several of the series have been entertaining and Bulls-Celtics was probably the best 1st-round series ever.
Right now, Cleveland and Denver are the two best teams remaining in the playoffs. When you look at the way Cleveland lost that game yesterday - a game they NEEDED, but then completely blew in overtime - it was clear that they're just outmatched in this series. They don't have the personnel. I expect them to win Game 5, but I think the smart money is on Orlando in Game 6.
Although I don't care about either team, I would tune in to watch an Orlando-Denver Finals, cuz I'm more interested in seeing good basketball than just seeing the biggest names.
You mean Orlando and Denver, right?
michael jordan had bunch of clowns around him and took them to the next level. he aint no air jordan. lebron = athletic shaq = that's it = good enough for nba to push as the greatest thing ever on a court. #23 should have retired completely. 10 yrs theyl'll be selling BS about him being the best ever to wear #23. worthless league. air brand so great it put nike on the map. king james s##t is just like that walmart trash they were pushing when shaq was in his prime. is lebron even better than a young shaq when he came to the league? same level i'd say...since we forget.Scottie Pippen was a clown? ???
Scottie Pippen was a clown? ???
Scottie Pippen was a clown? ???
He looked like one, but didn't play like one. Scottie was a damn good player...and Mo Williams is no Scottie Pippen. LeBron needs a Ginobili-type player to compliment him. The Cavaliers wouldn't win 15-20 games without LeBron. He can't do EVERYTHING.i'd go so far as to say that Pippen was one of the BEST defensive players who ever played in the NBA.
LeBron has no Pippen or Horace Grant/Dennis Rodman.not to mention Toni Kucoc.
At best, he's got a BJ Armstrong equivalent in Mo Williams and a (worthless) Bill Cartwright clone in Ilgauskas.
Cleveland just doesn't have very good players.
i'd go so far as to say that Pippen was one of the BEST defensive players who ever played in the NBA.
...and you'd be right.Michael almost ALWAYS had players around him, shit he even had Charles Oakley on the Bulls for a little while, Lebron has next to nothing.
I'll take him on the Knicks :)
Luc Longley neegars
(http://hoopedia.nba.com/images/7/74/Luc-longley.JPG)
good marketing by the nba. we're doing everything to make this #23 better than the last one in which you see just one in a generation. the current #23 is like an athletic shaq...not an air jordan. at 24 shaq was just as dominate in a big man way. grant was BS after he left chicago. air took him to the next level. pippen was good comp but ok with no jordan on a team..given the time frame air was in baseball. oakley a career garbage man. ok...rod is an oddity in the middle.where are you getting this bullshit idea that people are comparing Lebron to Michael? no one who knows anything about the game would put them in the same league, Michael is the greatest who ever played the game, Lebron is a VERY good player but not in Michael's league. Lebron is DEFINITELY one of the 2-3 best in the NBA AT THIS POINT though.
where are you getting this bullshit idea that people are comparing Lebron to Michael? no one who knows anything about the game would put them in the same league, Michael is the greatest who ever played the game, Lebron is a VERY good player but not in Michael's league. Lebron is DEFINITELY one of the 2-3 best in the NBA AT THIS POINT though.
i'd just watch it on TV, probably on either TNT or ABC.
?
That is a different argument. He is the best that i saw play but remember Oscar Robinson, Dr. J, Larry Bird, Magic Johnson, Wilt Chamberlin, George Gervin, Charles Barkley, Dominique Wilkins and many more.honestly man there's only 1, MAYBE 2 of those guys comparable to Michael, you could say that Wilt was more dominant for his time and changed the way the game is played and you could argue that Oscar was as much of a force offensively FOR THE TIME averaging a triple double for an entire season but IMO neither were as good all around as Michael.
I don't get service. I use my 42" tv as a computer monitor.oh ok, i'm sure there's somewhere you can see it online.
where are you getting this bullshit idea that people are comparing Lebron to Michael? no one who knows anything about the game would put them in the same league, Michael is the greatest who ever played the game, Lebron is a VERY good player but not in Michael's league. Lebron is DEFINITELY one of the 2-3 best in the NBA AT THIS POINT though.
I think Kobe is still better than Lebron, let alone comparing him to Jordan. Allen Iverson is probably the best player if you factor in his height. He scored 50+ pts multiple times.i agree, Kobe still has the edge on Lebron and i think he's going to find that out if they face each other in the finals, Kobe has the experience and 3 rings, Kobe is also a better shooter and defensive player.
Is there a game on 2nite?Cavs/Magic.
Michael is the greatest who ever played the game
2nd best ever behind Wilt Chamberlin..... 50 points and 25 rebounds a game average in a single season.different era my friend.
Case closed.
http://www.justin.tv/cadinho8
http://www.justin.tv/sticktv_3 PASS: sticktv.net
http://www.justin.tv/cadinho8thanks
http://www.justin.tv/sticktv_3 PASS: sticktv.net
2nd best ever behind Wilt Chamberlin..... 50 points and 25 rebounds a game average in a single season.
Case closed.
LeBron definitely sounds frustrated right now, but if they go with their game plan from games 1 and 2 - and put their foot on Orlando's throat once they get the lead - then they can get the next 2 games and take it to a toss-up in Game 7.
Sadly, they *did* follow the game 1-2 blueprint and after getting that huge early lead, they let Orlando get right back into it...again. The scary part was how easy it was for Orlando to close the deficit and take the lead. If I recall correctly, in 17 minutes of game time, Orlando went from a 22-point deficit to an 8-point lead. That's a 30-point swing that should've been made a LOT harder by Cleveland.
They got bailed out by some favorable officiating and it helped that they remained aggressive (that timeout call early in the 3rd was critical) and they absolutely NEEDED those huge 3s from Williams and Gibson.
But one of the things I heard last night on the radio really tells the story, though: Orlando did almost everything possible to lose a game they didn't have to win and they STILL almost won.
From a fan perspective, it would be nice to get two Game 7s in the conference finals, but Cleveland has a lot of work today and will have to play flawlessly to bring the series back home.
2nd best ever behind Wilt Chamberlin..... 50 points and 25 rebounds a game average in a single season.
Case closed.
He also lead the league in assists one year.
2nd best ever behind Wilt Chamberlin..... 50 points and 25 rebounds a game average in a single season.
Case closed.
Doesnt mean anything, pratically every team back then had a guy who avged at least 15 rebounds, today 14rpg wins you best rbounder in the league.Pace of the game back then was about 30% more possessions, so add that to the scoring,teams were taking almost 120 shots per game and shooting under 40% from the field,Wilt himself was shooting 40 TIMES A GAME!no 3 seconds in the key, players didnt jump to block on defense (seriously), no boxing out,league was also full of white stiffs, no defensive schemes etc etc.Put a prime Shaq back then and he'd probably avg 80ppg on 70%fg, Saying Wilt is great for those stats is like saying your local ymca hero is the best player who ever played because he plays with retards with special rules.well said, exactly.
Doesnt mean anything, pratically every team back then had a guy who avged at least 15 rebounds, today 14rpg wins you best rbounder in the league.Pace of the game back then was about 30% more possessions, so add that to the scoring,teams were taking almost 120 shots per game and shooting under 40% from the field,Wilt himself was shooting 40 TIMES A GAME!no 3 seconds in the key, players didnt jump to block on defense (seriously), no boxing out,league was also full of white stiffs, no defensive schemes etc etc.Put a prime Shaq back then and he'd probably avg 80ppg on 70%fg, Saying Wilt is great for those stats is like saying your local ymca hero is the best player who ever played because he plays with retards with special rules.
NUGGETS ;D
Doesnt mean anything, pratically every team back then had a guy who avged at least 15 rebounds, today 14rpg wins you best rbounder in the league.Pace of the game back then was about 30% more possessions, so add that to the scoring,teams were taking almost 120 shots per game and shooting under 40% from the field,Wilt himself was shooting 40 TIMES A GAME!no 3 seconds in the key, players didnt jump to block on defense (seriously), no boxing out,league was also full of white stiffs, no defensive schemes etc etc.Put a prime Shaq back then and he'd probably avg 80ppg on 70%fg, Saying Wilt is great for those stats is like saying your local ymca hero is the best player who ever played because he plays with retards with special rules.
That is a different argument. He is the best that i saw play but remember Oscar Robinson, Dr. J, Larry Bird, Magic Johnson, Wilt Chamberlin, George Gervin, Charles Barkley, Dominique Wilkins and many more.