Chron: Yao's marketing machine

Big Man Inc.
The marketing of Yao Ming

By DAVID BARRON
Copyright 2002 Houston Chronicle

Meet Team Yao.

Its roster includes two agents, a marketing director, an accountant, an attorney, a financial planner, 10 graduate students at the University of Chicago, a handful of operatives in the People's Republic of China, one set of parents and one 7-foot-5 basketball player.

Team Yao's timetable -- five years -- is modest. Its ambition -- to position Rockets center Yao Ming alongside Tiger Woods as the most potent pitchman in the world -- is anything but.

"What we have in Yao Ming," said team member Bill Sanders, director of marketing for BBA Sports Management of Los Angeles, "is a global opportunity. And so we feel strongly that the only real mistake we can make is to rush things. If we are patient, we'll be in great shape."

Contrast Team Yao's patience with the Rockets, for whom the future is now. Team owner Leslie Alexander has proclaimed his new employee as the biggest news story in creation and his team as the "focus of the world ... one of the greatest teams ever assembled."

The Rockets have plastered the city with billboards featuring Yao's image and the team's slogan -- "Be Part of Something Big" -- in Mandarin Chinese. They distributed life-size Yao growth charts to 5,000 fans Saturday night at Compaq Center, and there are plans for Yao bobblehead dolls and the latest collectible craze, a rubber duck bearing his likeness.

Although Team Yao and the Rockets are proceeding at different paces, both seek to maximize the exposure of a unique personality. Thus far, advertisers like what they see.

"A lot of people are curious about Yao Ming," said Lee Ann Daly, senior vice president for marketing at ESPN. "He may be the next phenomenon on court. Who knows?

"But someone coming from another country to make his way in America is a uniquely American experience. And so, I think, people are rooting for Yao."

Yao's modest start on the court mirrors his limited role thus far in the endorsement market. His only current promotional tie, other than trading-card deals with Topps and Upper Deck, is a contract with Nike that dates to his days in the Chinese Basketball Association. By contrast, Chicago Bulls rookie Jay Williams, who also is represented by BBA Sports Management, has deals with American Express and Sega.

The difference is that players such as Williams emerge from the U.S. collegiate ranks every year. There never has been a personality in the NBA quite like Yao.

For the Rockets, who have struggled on the court and at the box office since winning back-to-back titles in the mid-1990s, Yao represents a potential draw to the downtown arena that opens next season. For the NBA, he represents an entrée into the largest untapped market in the world.

The challenge is to choose opportunities wisely. Thus, the creation of Team Yao, led by the player's cousin, Erick Zhang, a student at the University of Chicago.

"China is the last frontier for multinational corporations that want to grow their brand and increase revenues," Sanders said. "But figuring out the best way to get established there has been a challenge. So there is interest in aligning with a personality who already has captured the attention of the Chinese population.

"With the Olympics in Beijing coming up in 2008, the nation is on a fast track to modernize. Markets are opening, and young people are starting to express themselves with purchasing power."

One of the best ways to capture young people with purchasing power has been through sports figures. According to Burns Sports and Celebrities Inc. of Evanston, Ill., Tiger Woods earned $62 million through endorsements last year, and Michael Jordan earned $30 million.

Instead of plunging headlong into the endorsement market, however, Team Yao is taking an academic approach with the help of University of Chicago professor Jonathan Frenzen, whose second-year MBA students work each year for a semester on a consulting project. Past clients have included Frito-Lay, Citibank and Nabisco.

Frenzen and colleague Francis Bassolimo conducted focus groups in five Chinese cities and polled 600 citizens to determine attitudes toward Yao. The class is working on suggestions to market Yao's name and image and will submit its report to Zhang as its final exam in December.

When the group files its report, Team Yao will determine strategy for community relations, media exposure and marketing opportunities.

Yao likely will support some charitable causes in the United States or in China, probably involving children, Sanders said. He also will limit outside appearances, Sanders said, pointing out that Yao turned down an invitation from ABC's Good Morning America because it would take time away from his new team.

After unveiling a Web site this month, Yao's first major marketing deals will follow in December, with a probable limit of three to five deals in the United States, China or both.

"I think the first thing you might see him do would involve technology -- cellular phones and computers -- because he enjoys those things. Soft drinks are another possibility," Sanders said. "Ask him about cell phone technology, and he'll tell you what he likes and doesn't like. Ask him about baked goods, and he might not have much to say."

Within three years, Sanders expects Yao to have perhaps a half-dozen major endorsement accounts. That could increase, based on his on-court success, as the 2008 Olympics approach.

As Team Yao plots strategy, the Rockets and the NBA also have geared up to publicize the league's newest international attraction.

The NBA has opened an office in Beijing and has new agreements with 12 regional and national television outlets in China. At least 30 Rockets games will be shown in China, and Yao's debut against the Indiana Pacers this week was available in 287 million Chinese TV households. By comparison, there are 106.6 million TV households in the United States.

NBA.com and its team sites for the NBA and WNBA now draw more than 40 percent of their traffic from outside the United States. The league constructed a Web site in Mandarin Chinese for the NBA draft (www.nba.com/china) and will have a full site in Mandarin within the next two weeks. Fans also can cast ballots for the NBA All-Star Game in English, Chinese or Spanish.

"We realize that Yao is a rookie in the NBA and that in terms of global marketing, we've got to give him some time to adjust," said Terry Lyons, the league's vice president for international public relations. "I think you'll see a lot of activity around All-Star Weekend. Time will tell as to whether he will be an All-Star player, but you can count on him being a part of the rookie game."

Yao wears the Nike Shox Limitless shoe, which is a standard variety that retails for about $125. But the company's plans for Yao are unclear.

"We will see how he develops and how our relationship evolves with him now that he is here in the U.S. There will be potential opportunities, but what they are we are not prepared to speculate," said Megan Ryan, Nike's Asia-Pacific director of communications.

Reebok, which provides the Rockets' uniforms, will produce Yao authentic and replica jerseys and perhaps a T-shirt or hat. The NBA's worldwide merchandise sales last year totaled $1.8 billion, up 35 percent from 2000, and the league expects a similar jump in business this year, in part thanks to Yao's presence.

Mark May, with the sporting goods trade group SMGA International, said simple mathematics demonstrate the potential of Yao and the NBA in China.

"Sales for the basketball industry at wholesale in 2001 (in the United States) were $395 million. The population of this country is 270 million or so," he said. "If Yao can become a dominant player, he could make the NBA in China more than a billion-dollar business -- depending, of course, on how well he plays."

The group with the biggest stake in that regard, of course, is the Rockets, who have Yao under contract for four years, with an option season, at $17.8 million. Yao plays a leading role, along with teammates Steve Francis, Cuttino Mobley and Moochie Norris, in the team's "Be Part of Something Big" ad campaign.

Yao already has paid financial dividends in the form of increased ticket sales, Rockets officials said. Although Tim McDougall, the Rockets' vice president for marketing, declines to give season totals, he said the team has sold more than 500 "Yao Ming Big Man" packages, which include tickets for six games against NBA teams with prominent centers.

Merchandising also will be another revenue stream when the Rockets move to the new arena next season. A spokesman for FMI Inc., which handles concessions at Compaq Center, said fans could choose Saturday night from three Yao items: a Reebok replica jersey for $50, lapel pins for $6 and Yao medallions for $10. More items, no doubt, are on the way.

Potential has driven the star-making machinery thus far. But with the 2002-2003 season under way, performance must take Team Yao the rest of the way.

"You see players like Eduardo Najera (of the Dallas Mavericks) in Mexico who have shown that their ability to get endorsements at home is better than it is in the States," said Bob Williams, president of Burns Sports. "With the Chinese marketplace, Yao could follow in their footsteps.

"But, at this point, he's a novelty in the United States. We've had great novelty endorsements in the past -- Dennis Rodman, William `Refrigerator' Perry and, to a degree, George Foreman. But they backed it up with stellar performances. We don't know if Yao will be great or the next Shawn Bradley (the Mavericks' 7-foot-6 journeyman center)."

"We understand the excitement of the league and the Rockets about Yao," Sanders said. "If his career goes the way I think it will, he can be in the stratosphere of the marketing world. With his personality, his game, his looks ... he has the whole package."