A Chinese Group Buys Into the NBA

The Chinese central bank might still be buying Treasuries but it looks like the private sector wants more tangible U.S. assets.

The WSJ reports that a Chinese conglomerate is on the cusp of buying a 15% interest in the group that owns the Cleveland Cavaliers of the NBA.

The Cleveland Cavaliers have signed an agreement with an investment group from China to become minority owners of the NBA franchise and its arena, a partnership that could affect superstar LeBron James’ future with the team.

The Asian conglomerate, which includes JianHua Huang, a Chinese businessman who has brokered sponsorship deals with the New York Yankees and other sports franchises in the U.S., could acquire up to 15% of Cavaliers Operating Company, the entity that owns the team and operates Quicken Loans Arena.

The article suggests that LeBron James may be a principal beneficiary of the deal given the marketing opportunities that it would open up for him in Asia. James is eligible for free agency at the end of next season and many thought he might bolt to a major market team to enhance his earnings. He’s in the Nike athletes stable and given their penetration of the Asian market it might make sense for him to remain with Cleveland.

We’ll see about that, but does this remind you of Japan about 30 years ago. Remember when they were nouveau riche and went on a buying spree. Office buildings, golf courses, just about anything that had some glitter to it. Maybe it will be different this time around but so far America has a pretty good track record of selling assets to foreign buyers high and buying them back low.

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About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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