Sunday, September 20, 2009

Will Stern Allow Chinese or Russian Owners in the NBA?

Will Stern Allow Chinese or Russian Owners in the NBA?

By Evan Weiner

September 19, 2009

8:00 PM EDT

(New York, N. Y.) – In January 1992 at a little media conference prior to the annual Baseball Assistance Team fundraiser in a Times Square hotel, Major League Baseball Commissioner Fay Vincent was trying to explain why his 26 member ownership group had a policy that barred non-American citizens from owning a Major League Baseball with the exception of the two Canadian teams, the Montreal Expos and the Toronto Blue Jays. Vincent and his owners had a major problem on their hands, Jeff Smuylan, the man who invented 24-hour a day sports talk radio in the United States, was having financial problems and had a deal in principle to sell his majority share of the Seattle Mariners to Hiroshi Yamauchi, the president of the Nintendo Company Ltd.

The problem with Yamauchi’s bid was simple. He was offering $75 million for 60 percent of the Mariners franchise. That was the good news for Vincent’s owners but the bad news was that Yamauchi lived in Japan and that was a major problem as xenophobic owners wanted nothing to do with a foreigner running a Major League Baseball team.

After all, it was un-American for a Japanese citizen to fund a franchise in America’s National Pastime.

Yamauchi thought it made good business sense for him to invest in a Major League Baseball team in Seattle. His son-in-law Minoru Arakawa ran Nintendo’s American division in Seattle. Arakawa, his wife Yoko and grandchildren lived in Seattle. Yamauchi’s company employed 1,400 people in Seattle and Yamauchi pledged to keep the franchise in the city.

That didn’t seem to please Vincent or the owners and on a cold January night in New York Vincent seem to be looking for excuses that would keep the Mariners franchise out of foreign hands. None of his answers seemed logical.

Eventually after Major League Baseball was put through the ringer as Seattle and Washington state officials along with Washington Senator Slate Gorton started questioning baseball’s anti-foreigner ownership policy, a compromised was reached. Yamauchi was allowed to buy a significant stake in the franchise but could not be a majority owner.

On July 1, 1992, Yamauchi closed the deal and he and his American partners have run the Mariners franchise since then. Yamauchi’s Seattle representatives has been a good group for the other owners; the Yamauchi’s people knew what buttons to push to get a new Seattle taxpayers funded stadium from the Washington legislature in 1995 after voters said no to a new stadium in 1994.

Major League Baseball has not had a legitimate foreign offer for any American team since 1992. The Belgium-based Interbrew brewery owned the Toronto Blue Jays for five years between 1995 and 2000 after the brewers purchased the Blue Jays owner Labatts (beer). The National Football League has not faced that issue either. The National Basketball Association could be getting a foreign owner if a Reuters report on September 16 is correct.

Russia’s richest man, Mikhail Prokhorov, according to the Reuters article is interested in buying a significant stake in Bruce Ratner’s New Jersey Nets franchise. Ratner has been attempting to move the East Rutherford-based team to the Atlantic Railyards in Brooklyn for four years and just got New York State approval for a scaled-down arena. Ratner’s problem is that he has been losing money on the team since he purchased the franchise in August 2004.

It seems inconceivable that NBA Commissioner David Stern would mimic Fay Vincent circa 1992 and rattle off reasons why he and his owners would block foreign investors in NBA teams. Stern has been pushing a strategy that has globalized the NBA and basketball with his biggest success to date in making China an NBA hotbed and before that Hong Kong.

In May 2009, Cleveland Cavaliers owner Dan Gilbert completed a deal to sell up to 15 percent of the team to a group of Chinese businessmen including JianHua Huang, who has brokered sponsorships with a number of North American sports teams.

Phil Anschutz’s AEG (Anschutz has a piece of the Los Angeles Lakers) and NBA China are developing arenas throughout China in an effort to not only push the NBA in China but other sports and entertainment at well.

So it will seem that Stern would welcome Prokhorov who has a financial stake in the Russian Super League and the Euroleague’s CSKA Moscow’s basketball team if he passes all of the NBA’s checks.

Ownership groups can be good or bad from the United States or Canada; it is never easy to figure out who will be successful and who will fail. The NHL, which also has global aspirations, has had one non-North American owner.

National Hockey League President Gil Stein and his 22 owners had no problem with the prospect of Japanese money providing the majority funding for the expansion Tampa Bay Lightning franchise in 1992 (along with New York Yankees owner George M. Steinbrenner III). Kokusai Green’s owner Takashi Okubo. The experience was terrible as Okubo was an absentee owner and the team’s finances were a mess. Kokusai Green sold the franchise in 1998. That was the last foreign owner in the NHL. Charles Wang, who purchased the New York Islanders in 2000, was born in Shanghai, China but moved to New York at the age of 8.

Even though Major League Baseball has a sign still up saying Americans only despite increasing globalization and the National Football League has not faced the prospect of having a foreigner buy a team, North American owners have been purchasing European properties in English soccer. MLB’s Texas Rangers (and NHL Dallas Stars) owner teamed up with former NHL Montreal Canadiens owner George Gillett to purchase the English Premier League’s Liverpool F. C.

In 2006, NFL Cleveland Browns owner Randy Lerner bought Aston Villa. The year before, the Tampa Bay Buccaneers Glazier family purchased Manchester United.

Former Detroit Pistons executive and Minor League Baseball owner Andrew Appleby purchased the Derby County Football Club of the Premiership in 2008. Another American owner, Stan Kroenke (NBA’s Denver Nuggets, NHL Colorado Avalanche, MLS Colorado Rapids, National Lacrosse League’s Colorado Mammoth, NFL’s St. Louis Rams and the Altitude Sports and Entertainment regional cable TV network in the Rocky Mountain states) is the largest share holder of the North London-based Arsenal FC.

Major League sports teams are not cheap and there are not a lot of Americans who could afford purchasing a team. If Prokhorov is indeed interested in the New Jersey Nets, NBA Commissioner David Stern would be foolish to turn a deaf ear to him. The founder of the Kontinental Hockey League, the Russian billionaire Alexander Medvedev claimed last May that he wanted to buy an NHL team and move it to Quebec City.

If Jim Balsille thinks the NHL has given him a difficult time in attempting to buy the Phoenix Coyotes and moving the franchise to Hamilton, Ontario, Balsille’s case against the NHL would be child’s play compared to an attempt by Medvedev to buy an NHL franchise. Medvedev started a new Russian league that went after NHL players and signed a few including Alexander Radulov who left his Nashville team while under contract to play for Salavat Yulaev Ufa in 2008-09.

It is only a matter of time before some North American franchises are purchased by non-Americans and non-Canadians. Americans are snapping up English Premiership League teams why wouldn’t major money people from Europe or Asia not jump at the opportunity at a North American team? Fay Vincent is no longer guarding the gate like he did on that cold January night in the middle of Times Square in January 1992. The xenophobic policy of Major League Baseball of 1992 made no sense. It makes even less sense in 2009.

1 comment:

replicajewelry said...

Mikhail Prokhorov is such a crafty businessman, maybe this is not all he want.
watch for his next move
While all the nets fans are exciting about this, because the movement may lead nets to be the richest club in the league.