The globalization of basketball has come full circle.
Chinese shoe and apparel manufacturer Peak Sports recently opened a U.S. office in Los Angeles and plans to start selling products stateside next year.
Founded in 1989, Peak is headquartered in the southern city of Quanzhou and went public last year on the Hong Kong Stock Exchange; the IPO raised $221 million in U.S. dollars.
Peak established its U.S. outpost in Los Angeles because it plans to hire local designers to help it develop shoes and apparel for the U.S. market. Company executives saw Los Angeles as the best place to build a team of designers.
“Our (Chinese) designers don’t know the American consumer,” said Su Jia, chief executive of subsidiary Peak Sports USA. “There is a large talent pool of fashion and shoe designers here; plus, Los Angeles is closer to Asia than New York.”
Peak has had an interesting history with U.S. basketball.
Five years ago, Houston Rockets player Shane Battier was the first American basketball player to sign an endorsement deal with Peak. And for good reason, he plays alongside Chinese superstar Yao Ming. Since then, 12 players have signed similar deals, including current Los Angeles Lakers Ron Artest and Sasha Vujacic.
“Every kid dreams of having their own shoe line,” Battier told the Business Journal in a recent swing through town. “Mine just happens to be with a Chinese company.”
Battier said that he earns far more from endorsements with Peak than he would with brands like Nike and Adidas because his popularity in China is greater than his U.S. star power. However, the company and its Chinese mainland competitors are serious about making inroads in the U.S. market through endorsement deals that will move shoes domestically.
Competitor Li Ning Co. Ltd. opened its U.S. headquarters in Portland, Ore., last year. The Beijing-based company endorses a few NBA players including Shaquille O’Neal and Baron Davis. It opened its first U.S. store to sell Li Ning-branded shoes in Portland earlier this year.
Another major Chinese brand, Anta Sports Products Ltd., has announced plans to open offices in the United States and recently signed Boston Celtics star Kevin Garnett.
“Players that have contracts up for renewal with Nike and Adidas are getting significant offers from Chinese companies,” said Arn Tellem, president of Westwood-based Wasserman Media Group, who was speaking at a sports law conference hosted by Loyola Law School.
In China, Peak employs 20,000 people and operates more than 5,000 direct retail stores. It does not sell through third-party stores, but might change that strategy in the U.S. market and sell through retailers like Foot Locker. It expects to start selling its American basketball shoes at a price point of roughly $100.
Ticket Time
Spotlight Ticket Management closed a round of Series A venture capital financing worth $2.5 million last week from Providence, R.I.-based Point Judith Capital. The Woodland Hills-based company plans to use the funding to expand its technology and reach out to new clients.
Spotlight offers companies software to help them track the way tickets to sports and entertainment events are used by clients and employees. All tickets get entered into the software and company employees can make requests or the administrators can assign tickets. Over time, companies can track which employees are producing results through their entertainment of clients.
The company was founded in 2007 by former StubHub executives Tony Knopp, Joe Greiner and Aric Haut. It has 17 employees and more than 1,000 customers, including firms like NBC Universal and Motorola.
The product is aimed at companies that spend at least $75,000 on season tickets or suites. The company charges a fee equivalent to less than 1 percent of the value of tickets tracked by the system.
“Many companies don’t track the utilization of tickets, but they are an asset that can carry significant risk,” said Knopp, Spotlight president.
Full Schedule
The Los Angeles Kings have started to reap the benefits of making the playoffs last year, the first time since 2002.
The team secured television distribution for all 82 of its games in the local market, with KCOP-TV (Channel 13) agreeing to broadcast five games this season. Those five will be aired by the Kings in partnership with Fox Sports West, which has the broadcast rights to 70 games. The remaining seven will be nationally televised on NBC or the Versus cable network.
Last year, the team had only 69 of its games on television, with 68 on Fox and one on Versus. This is the first over-the air deal for the Kings since it had a few games broadcast on KCAL-TV (Channel 9) during the 1998-99 season, its last year playing at the Forum in Inglewood.
Staff reporter David Nusbaum can be reached at [email protected] or at (323) 549-5225, ext. 236.
