China's Basketball Association Exits CBA Company. Yao Ming's League Still Faces These 4 Problems

The system, the national team, sponsorship, and a league that is still immature — all of it now sits in front of Yao Ming.

Yao Ming, the newly elected chairman of the Chinese Basketball Association, appears to be bringing back the CBA reform plan that died in 2016.

The latest news: the association, CBA Company's largest shareholder, has transferred its 30% stake to the other shareholders — the 20 teams that play in the CBA league.

On April 28, Yao Ming confirmed the news at a press conference at the Nanchang International Sports Center. The sum involved was only 8.58 million yuan, a tiny figure in a Chinese sports industry where investments routinely run to hundreds of millions or billions. Its effect could be revolutionary.

Once the deal is complete, CBA Company will be owned by the clubs themselves, each holding 5%. And if the association later keeps its earlier promise to hand the league's competition-organizing authority to CBA Company as well, the CBA's structure will match the NBA's. China's effort to separate sports administration from operations looks to have taken another real step forward.

This could have happened a year earlier. In early 2016, Yao Ming joined 18 CBA clubs to found Zhongzhilian Company, hoping to force the General Administration of Sport into reforming Chinese basketball. Even then, Yao's idea was for all the CBA clubs to form an operating company on their own and hire professional managers to run the league's commercial development and day-to-day operations.

The association of that time did not like the plan. Through the first half of 2016, it repeatedly said no to Yao. Speaking in Beijing on January 19, 2016, Zhang Xiong, director of the association's competition department, said Zhongzhilian was not the same thing as CBA Company, which the association had set up to professionalize the league and separate administration from operations.

The quarrel widened from there, and Yao Ming at one point vented to reporters: "I can curse in the street now." "I hope the association shows some sincerity." "[This so-called reform] just wraps the old way of managing the CBA in a corporate shell."

Then 2017 turned the story around. First, at the association's ninth national congress in late February, Yao Ming was elected chairman. Then came this share transfer. Yao does seem to be pushing the plan he proposed a year ago — except that he used to stand outside the system, and now he stands inside it.

That is the difference. Yao Ming can push his plan through in 2017 because he now has more say. Industry insiders told QDaily that this time Yao has backing from "higher up," which means that as the association's new chairman he holds real power inside the system, not a ceremonial title.

Personnel changes at the Basketball Administration Center point the same way. Xin Lancheng, the center's former director and a well-known defender of the state-run sports system, retired in early 2017. Li Jinsheng, regarded as a reformer, took his place, and Wang Xuan, the center's new party secretary, has also supported reforming the CBA league in the past.

Yao Ming's authority grew again in April 2017. Under a notice issued by the General Administration of Sport's general office on March 31, the duties carried by the administration's Basketball Sports Management Center would pass to the Chinese Basketball Association starting in April, and the work would be done in the association's name from then on. The association would take full charge of the national team, the league, youth development, grassroots basketball and the rest.

The notice was widely read to mean the Basketball Administration Center would soon stop operating. Some of the more optimistic outlets ran headlines like "The Yao Core Era Has Really Arrived," arguing that the association and the center — long "one staff, two nameplates" — had formally split, and that the association would now run itself without the center holding it back. That institutional shift is probably what let Yao Ming pull the association out of CBA Company so smoothly.

It is also worth noting how little the association charged, set against what the league could earn later. Infront China held the CBA's commercial-development rights from 2012 to 2017 and paid 336 million yuan a year for them. Now that sport has become an industry capital chases hard, the common estimate is that the CBA's media rights and commercial development could bring in 10 billion yuan over five years. At 8.58 million yuan for a 30% stake, CBA Company as a whole is worth less than 30 million yuan.

A year ago, a sale that cheap would very likely have been called "a loss of state assets." But according to a report by Sports Big Business, the association had written the price into the relevant documents beforehand and obtained approval from its superiors.

All of which suggests that while Yao Ming's success in pulling the association out of CBA Company can be read as a milestone for Chinese basketball reform, it is still reform from the top down. The people who really decide what happens are still inside the system.

If reform rests on the policy mood of the moment, or on what a handful of people happen to prefer, that uncertainty may be the obstacle Chinese basketball reform runs into next.

Even leaving that risk aside, separating administration from operations — pulling the administrative power that the Basketball Administration Center and the association represent out of a league-operating business like CBA Company — is only a small part of the whole job. Splitting the bureaucracy is always the easy part. In the running of the league that follows, Yao Ming, the association and CBA Company will face at least these four problems.

The shadow of the system still hasn't lifted

The biggest problem is still the system. At the top, the Basketball Administration Center, the association and the league company have separated on paper. At the bottom, the state-run sports system — sports schools, provincial and municipal sports bureaus — is what keeps the CBA running. The hardest knot in all of it is who owns the players.

The CBA's own player-development system has long been immature. While clubs are still fighting to break even, they cannot afford a full youth academy, so many of their young players come from athletes the sports bureaus and their affiliated sports schools trained themselves. These are the "system players" — Mengke Bateer in the old days, Guo Ailun now.

A system player's personnel file belongs to the local sports bureau, so he is not really a free agent and cannot move freely between clubs. That has held the CBA back.

Take Wu Nan, who now plays for Sichuan Jinqiang, the 2015-16 CBA champions. In 2012, unhappy with how his club, Jiangsu Tongxi, treated him, Wu wanted a transfer. The Jiangsu Sports Bureau refused to release him, on the grounds that it did not want "Jiangsu's basketball talent flowing out." The two sides deadlocked, and for the next two seasons Wu refused to play for Jiangsu. Only in mid-2014, when Jiangsu Tongxi and the Jiangsu Sports Bureau announced they were giving him up, did Wu finally get back on a CBA court. Two years gone for nothing.

There is also the National Games, held every four years. Local sports bureaus need players for it, and they are apt to lean on clubs to write off the CBA season so their athletes can prepare for the Games instead.

In the 2009 CBA playoffs, Shandong announced it would not use its import players, because it wanted to treat the playoffs as practice for a good showing at the National Games. Not long ago, word went around that Shandong's quick exit from the 2016-17 playoffs "happened because the local sports bureau hinted to the referees that, to protect the political task of the National Games, Shandong could not go any further in the playoffs, or it would eat into the team's training time." If that is true, the conflict between the league and the local sports bureaus will not be easy to settle.

To keep the CBA healthy, Yao Ming needs to draw a clear line between clubs and sports bureaus. As things stand, though, both the clubs' operations and the staging of the league depend on those bureau relationships.

With many clubs still lacking a proper youth academy, clubs and local sports bureaus will clearly go on haggling over player development for some time. Sports bureaus can also promise athletes a job inside the system once they retire; how a genuinely free player would make a living after retiring is another worry the league has to answer.

In many cities, the local sports bureau helps stage CBA games — arranging the venue, fire safety, security. To cut the league off from the bureaus completely, CBA Company would have to take over that work itself. Doing all of it well will not be easy for a company this new.

Which matters more, the national team or the CBA?

Industry insiders interviewed earlier by QDaily kept bringing up the 2019 FIBA Basketball World Cup, to be held in China. To stage it well and to get a good result from the Chinese team, they argued, the Basketball Administration Center would survive at least until 2019.

The center's powers have already shrunk sharply. Even so, the World Cup and the national team could still get in the way of the reform Yao Ming is driving.

In late February, the well-known basketball commentator Yang Yi listed Yao Ming's reform proposals on his personal WeChat official account: shorter national-team training camps; a longer season with more games; and a national team that invites players rather than conscripting them.

Yang Yi went on: "The association's new leadership, the league company's directors and representatives from every club gathered in Beijing for a meeting and went through it item by item. Once they started talking, the differences came out." The implication seemed to be that Yao Ming's proposals had met real resistance.

The association then denied the report: "We have not put forward any proposal, and nothing specific was discussed." So Yao Ming's plan was never voted down. Still, you can see in it that the national team's interests and the league's may not sit easily together.

There is precedent. The 2014-15 CBA season was set to open on November 8, but with the national team due to play the FIBA Asia Championship, which decided Rio Olympic qualification, the association consulted the team and moved the opening a week earlier. To leave the national team more time, the league went from five games every two weeks to three games a week — one extra game per fortnight, which shortened the season.

Zhang Xiong, the competition department director, explained: "When we set the format, the schedule and the rules for our league, we do have to think about how the league serves the national team. That doesn't mean the national team's interests and the league's are in conflict, of course — we have always wanted to fit the two together better."

Now the choice between the World Cup and the CBA is back. How will Yao Ming choose? And how much room does he have to choose at all?

Not everyone is optimistic. Some outlets argue that because the 2019 World Cup is a major event on home soil and the men's national team carries enormous pressure to prepare for it, full competition-organizing authority will not pass to CBA Company until after the tournament.

For now, a longer CBA season and the national team's training and match load still pull against each other, so in the 2017-18 and 2018-19 seasons the CBA regular season will probably stay at 38 games.

Can the new CBA Company sell the league?

"We're still waiting and watching. We need a closer look before we decide." That is what one sponsor told QDaily when asked whether it would keep sponsoring the CBA. The reason: the CBA is going through enormous change, and how it will handle commercial development is not yet clear.

For the past 12 years that work has belonged to Infront China. After paying the association 336 million yuan a year, Infront had full control of advertising, sponsorship and the rest of the league's commercial development. In 2015 alone, the business brought in 720 million yuan.

Infront China's contract with the CBA expired in 2017, and the two sides failed to close a deal during the exclusive renewal window. What happens next to the CBA's commercial development is now a large question mark. Will the new CBA Company keep using an agency like Infront China, or run the business itself? Unanswered, those questions leave sponsors hesitant.

Sponsors have also watched the mess the CBA has made of sponsorship in the past, and they have begun to doubt whether the league can give them the brand exposure they want.

On September 29, 2015, TAG Heuer signed with Infront China to become the CBA's exclusive official timekeeper and official watch sponsor for the 2015-16 and 2016-17 seasons. Ten days later, Infront China sent TAG Heuer a termination notice.

The two sides told different stories about whether the termination was within the rules. Some in the industry guessed that Infront China's Swiss parent, Infront Sports & Media, had already agreed a CBA sponsorship with another watch brand, Tissot, which left Infront China no choice but to cut TAG Heuer loose.

TAG Heuer sued. In a first-instance ruling this February, the Chaoyang District People's Court in Beijing found for TAG Heuer and ordered Infront China, the party in breach, to pay 1 million yuan in damages. TAG Heuer pulled out of the CBA anyway.

What CBA players are allowed to wear on their feet is even murkier. Li-Ning became the league's main sponsor in 2012 and every player's shoes were switched to Li-Ning. A few players, though, had signed with Nike individually, so plenty still play in Nike.

For the first few years of the deal, Li-Ning's shoes really were behind Nike's in construction, and out of concern for the players Li-Ning let Nike pay a fee to keep its shoes on court. In the last couple of years, believing its own workmanship had caught up, Li-Ning began insisting that every player wear Li-Ning. The clash with Nike broke out, and produced the awkward sight of Yi Jianlian taking off his Li-Ning shoes on court and putting on Nikes.

Balancing different sponsors' interests so that none of them feels cheated is a hard problem. Even a company like Infront got it wrong. Can Yao Ming and a CBA Company that has just taken over do better?

CBA chaos: the league badly needs to get professional

The CBA is still immature, in every direction you look. Over the past few seasons, the mess has been routine.

On March 16, 2016, in Game 3 of the CBA Finals, Liaoning lost 104-109 at Sichuan for its second straight defeat, falling behind 1-2 in the series. After the game, Liaoning's players and local Sichuan fans fought outside the team hotel, each side accusing the other of throwing the first punch.

In the reckoning afterwards, beyond the fans' own behavior, security in Sichuan had failed badly. The home team and the visitors had somehow been booked into the same hotel, with no dedicated player entrance and no security posted, so when fans clashed outside there was no way to stop it in time.

The game clock also failed repeatedly through the 2016-17 season. In round 10, when Beikong lost 136-138 at home to Zhejiang in double overtime, the clock in the arena took about two seconds to wake up and start running after Beikong's import McCollum caught an inbound pass in the closing moments of the first overtime.

In round 24, again at Beikong's arena, the clock failed to start after an inbound pass, which let Shandong hit a buzzer-beater to tie the game and force overtime.

On March 17, in the CBA semifinal between Xinjiang and Liaoning, the score reached 107-107 with 4 seconds left on Liaoning's shot clock. After Liaoning's Zhao Jiwei caught the ball and began his drive, the arena clock did not move at all, and Zhao beat Xinjiang with a game-winner that broke the 24-second rule. The association later issued a statement calling it "a misjudgment at a critical moment that affected the result of the game," and punished those responsible.

The CBA still has no mature system for referees. Every referee in the league today works part-time. They have their own jobs during the week and turn up on game days to officiate, for a fee of 1,500 to 3,000 yuan.

The CBA knows this is a problem, but building a professional refereeing corps will clearly be hard. According to Zhang Xiong, who runs the league office, professionalizing the referees will certainly be one of CBA Company's priorities — and will take 8 to 12 years.

It is a long process, and the biggest problem Yao Ming faces.

Cover image and images in this article from: Wiki Commons, Baidu