Joe Tsai is not reluctant to talk about his ambitions for the Brooklyn Nets in China. At a little noticed seminar during the NBA China Games in October, the Nets owner made that clear. As the Macao News
reported at the time, Tsai always wanted to make Brooklyn “China’s team.”
So far so good. the Nets have been tagged as the third to fifth most popular NBA club in the people’s republic according to analyses of social media. Recently, there’s also been the stirrings re the Liberty as WNBA clubs and women’s basketball in general grow in popularity worldwide.
In a series of little-noticed (at least in the U.S.) moves over the past three months, Joe and Clara Wu Tsai have signaled that the connection between his teams and his companies goes both ways. Increasingly, Brooklyn Sports & Entertainment, the parent company of the Nets, Liberty and Barclays Center, is working with Alibaba, Tsai’s giant e-commerce, cloud and AI empire while helping the NBA as well. BSE Global under the Tsais has long had a five-person China Business Strategy Group which works not just on things like endorsements but business opportunities. It appears they’ve been busy.
Just this month, the Liberty and star Sabrina Ionescu have announced separate sponsorship deals with Alibaba, specifically through AliPay+, the world’s leading mobile payment platform with more than 1.3 million users and 80 million merchants. Alipay+ is an affiliate of Ant Financial, which in turn is one-third owned by Alibaba and on whose board Joe Tsai also sits. Ant Financial is, by some measures, the world’s largest money market fund as well, serving more than a half billion people in China. (On Tuesday, London Daily published an explainer on the companies’ interrelationships on the occasion of Ant going public, giving it even more resources.)
Alibaba connections may not to be so new but they are becoming more prevalent across BSE. Indeed, Liberty and Nets fans as well as concert goers at Barclays Center may be familiar with the company’s payment consoles at the arena’s concession stands.
The press releases associated with the deals provided no details on financial arrangements but there were a lot on just how the WNBA team and Alipay+ will work together on a number of initiatives, as Hong Kong’s South China Morning Post reported this week. (SCMP is also owned by Alibaba and Tsai is the paper’s chairman.)
The multi-year initiative would see the company’s Alipay+ fintech platform become an “official sponsor” and “innovation partner for sustainability” of the team, to “jointly support community programmes designed to advance community empowerment, environmental sustainability and youth development” across New York City, the firm said in a statement.
Alipay+ would support Liberty and its community in “urban reforestation and other conservation initiatives”, such as a community project to recycle used shoes, as well as projects for “youth sports and technology training”.
Sounds mostly about marketing and Alipay+ is in the midst of international expansion and connections like the WNBA plus a prominent star like Ionescu is good marketing.
As Norman Oder, the critic and chronicler of the overall Atlantic Yards/Pacific Park project noted this week, “it’s seems unlikely the investment is aimed to bolster access to the “Asia-Pacific digital wallet community.“ Moreover, that community may not be limited geographically. The New York metropolitan area is home to nearly a million Chinese and Chinese-Americans, making it the largest and most prominent metropolitan Chinese community outside Asia.
“Our partnership with Alipay+ goes beyond the game,” said Keia Clarke, CEO of the Liberty. “Together, we are investing in the future of New York – its people, its environment and its youth.”
Earlier in the month, Ionescu announced she was new Global Brand Ambassador for Ant International. Her statement was more direct about priorities.
“I’m drawn to Ant International’s work to open up access to financial tools and opportunities for everyone,” Ionescu said in a statement. “We share an aligned vision for equitable access, and their commitment to supporting small businesses and marginalized communities mirrors the work I do with youth through sports.”
Alibaba and its affiliates have another deeper connection to the Liberty beyond marketing. In June, Jack Ma, Alibaba’s biggest shareholder and co-founder along with Tsai and others. bought an undisclosed stake in the Liberty. It’s believed to be around 10%. It was suggested then that Ma would have a passive role in team operations but historically Ma, one of China’s richest men with a net worth estimated at $45 billion, hasn’t been passive about anything.
“Jack has been a trusted business partner to me, and I’m thrilled to have another opportunity to create meaningful impact together,” said Joe Tsai, who is the alternate governor of the Liberty as well as governor of the Nets.
Events surrounding the NBA China Games, held in Macau during early October, provided perhaps the biggest indication of the growing relationship between not just the Nets and Alibaba, but the NBA as well.
The NBA House, an “immersive” fan experience was one example. The Nets provided a drone view inside. If you squint, you’ll see it’s “powered by Alibaba Cloud AI Technology”…
And the China Games were “presented” by Taobao 88 VIP, a exclusive membership program that caters to the highest spending consumers on Taobao, the Alibaba online shopping platform. Buy a VIP membership and get all manner of exclusives, noted the promotions. Fifty million Chinese already have.
In its build-up to the Games, Taobao 88 VIP pushed a number of NBA tie-ins including a meet-and-greet with Vince Carter in Macao and opportunities to pick up all sorts of China Nets gear and even training videos with Brooklyn’s assistant coaches…
That same week, the NBA and Alibaba announced a deal for future collaborations, the company supplying AI and cloud services for NBA China, hoping it will be “a lab” for the NBA’s other entities in the U.S. and elsewhere down the road.
Under the arrangement, Alibaba will provide Chinese fans with a number of digital innovations including AI-powered visual enhancements to replay highlights. Powered by Alibaba’s AI algorithms, the system tracks player movements and generates a visual presentation of high-quality frames to highlight key plays using a spherical view. Tsai said at the time that the innovations developed by Alibaba and NBA China could ultimately be transferred to the NBA elsewhere.
“Use China as a lab for content creation and social distribution, then bring the innovations back to the US, since China is far ahead in this space.” he said at the Macao seminar. (Emphasis added.)
How does this help the Nets … and now Liberty, fans might ask. No one understands the value of China like NBA (and WNBA) players who are always looking for markets to supplement their NBA salaries..
This summer, a parade of NBA stars and superstars traipsed across China’s big cities selling sneakers and other products, a further signal the cold war between the two countries was thawing. LeBron James, Steph Curry, Nikola Jokic, Victor Wembanyama, Jimmy Butler, Anthony Edwards, James Harden, Kawhi Leonard, Draymond Green and ex-Net D’Angelo Russell all made high-profile appearances before adoring fans. Wemby even spent 10 days at a Shaolin Temple, shaved head and all, while pushing Louis Vuitton! And during her downtime last spring, Ionescu did the same.
The popularity of the NBA in China cannot be underestimated and it can’t hurt that the team with the most trips to Chinese cities — eight games in four trips over the past 15 years — has an increasingly large presence … and owners proud of their Chinese heritage.
There are geopolitical risks. Mikhail Prokhorov was essentially forced to sell the Nets to Tsai because of rising tensions between the U.S. and Russia. The same week as the NBA China Games, Tsai spoke on the sidelines to CNBC about the summit between Presidents Trump and Xi, which took place a couple of weeks later. Tsai said he believed that U.S. and Chinese leaders possess the “wisdom” to avoid a “race to the bottom” in trade tensions and recognize the symbiotic relationship between their two countries. Will that last? If it does, Tsai’s teams are well-placed to reap the rewards. If not…
