The deal to sell a minority stake in the Cavaliers to a Chinese investment group -- what would have been the first major Chinese investment in an American sports league -- has been dead for months, according to the Cavs and the NBA. The Plain Dealer first reported in May 2009 that a group led by Chinese businessman Kenny...
The deal to sell a minority stake in the Cavaliers to a Chinese investment group -- what would have been the first major Chinese investment in an American sports league -- has been dead for months, according to the Cavs and the NBA.
The Plain Dealer first reported in May 2009 that a group led by Chinese businessman Kenny Huang had agreed to buy 15 percent of the team owned by former Cavs Vice Chairman David Katzman.
The agreement was billed as a timely entree into the massive and growing Chinese sports audience, and a valuable cash infusion for the Cavs -- both positive developments in the bid to keep free agent LeBron James. The sale was expected to be completed late last year, pending NBA approval.
"It never materialized, as far as completing the application process with the league," said Cavs President Len Komoroski. "Ultimately, you would have to ask [Huang's group] as to why."
Neither Huang nor Katzman could be immediately reached for comment.
Any transfer of team ownership of more than 5 percent must be approved by the NBA's Board of Governors, specifically three-fourths of the other 29 teams. Approval is based on a rigorous personal, business and financial background check.
Apparently, the process never got that far.
"The group Mr. Huang was advising declined to submit a complete ownership application to the league and was informed several months ago that it would not be considered for approval," NBA spokesman Mike Bass responded by e-mail Wednesday.
A change in the investor group delayed the deal last fall when Huang's main financial partner, Adrian Cheng, was replaced by Albert Hung, an influential and respected Hong Kong businessman. Hung tried to recruit another well-heeled Chinese investor, but the group just couldn't put the package together.
Huang was also behind the Cavs' sponsorship deal with Tsingtao, a Chinese beer company.
The timeline suggests the agreement kind of unraveled this spring:
April 12: A press release from QSL Sports Ltd., a Hong Kong-based sports business and marketing company, confirmed that co-founders and co-chairmen Huang and Cheng held no stake in the Cavs, and that their company had decided to focus on China's National Basketball League.
May 1: A QSL press release announced Cheng had left the company.
May 2: NBA Commissioner David Stern, in Cleveland to present James with the MVP trophy before a Cavs playoff game against Chicago, said the sale had not been approved, that there were no plans for a league vote and that he intended to check with the league's lawyers to find out why.
"It's not like a specific act or conversation or e-mail was sent that said, 'Hey, we're out,' " Cavs spokesman Tad Carper said. "It wasn't like that at all. It was more a slowdown in progress to where it wasn't moving backward or forward."
On July 8, James announced plans to sign with Miami.
Despite impressions, the Cavaliers and another source familiar with the failed agreement said the investors weren't just biding their time to see whether James would stay in Cleveland.
"It had absolutely nothing to do with LeBron," the source said.
FSO games announced: FOX Sports Ohio will broadcast 80 regular-season Cavaliers games this season -- all but the two nationally televised games against Miami on Dec. 2 (TNT) and New Orleans on March 6 (ESPN.)
The network's coverage of the Cavs will begin Oct. 27 when the Cavs host the Boston Celtics at 7 p.m. in the season opener. The schedule of games in high definition will be released at a later date.
WUAB Channel 43 will once again simulcast a select number of Cavs games this season.
Plain Dealer reporters Mary Schmitt Boyer and Brian Windhorst contributed to this story.