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.