Twitter Fingers Trigger Hoop Controversy
“With the first pick in the 2002 NBA draft, the Houston Rockets select Yao Ming from Shanghai, China, and the Shanghai Sharks.” — Former NBA Commissioner David Stern
Although basketball had been relatively popular in China for decades, this draft pick was the watershed moment that would make basketball explode in China. Yao Ming was the first high profile superstar drafted from mainland China, and ever since then, fans have had particularly close ties to Houston for the last 17 years. However, years of building a steady relationship evaporated when Rockets general manager Daryl Morey expressed support for recent Hong Kong protests by tweeting a controversial image. Morey’s now-deleted tweet exemplifies a pro-democracy stance in contrast to mainland China’s Communist one party rule.
Few would have predicted the massive blow back resulting from Morey’s tweet. The media has reported that the Rockets could lose $25 million in sponsorship, the right to play exhibition games in China, and the sponsorship of Chinese brands. The Chinese market is the second most significant source of revenue after the United States for the NBA. Morey’s twitter fingers triggered an unintended controversy, surely bleeding into profit margins. The NBA just extended two massive deals to stream their content with Chinese technology giants Tencent and Alibaba. Alibaba is selling NBA merchandise on their e-commerce platform as well as streaming rights to content and highlights. Altogether this reaches 700 million consumers, more than double the United States’ total population. With Tencent, the new $1.5 billion deal includes live game broadcasts on its channels and additional video content through both their website and mobile app. Morey’s tweets on Hong Kong could complicate these landmark agreements for the NBA if tensions escalate further. CCTV and Tencent have considered reducing the number of NBA games they televise in the coming months because of the quarrel. Tencent already skipped two live broadcasts of exhibition games in China and several Rockets games have been taken off of the schedule. China Central Television, or CCTV, publicly stated that Morey’s remarks “challenged the national sovereignty and stability and do not count as freedom of speech”. Both platforms expressed extreme disappointment with NBA’s support for Morey’s tweet supporting protests against China’s sovereignty and stability.
Adam Silver, NBA’s commissioner, made the right judgment call by not punishing Daryl Morey. In fact, Silver has continued to support Morey exercising his freedom of speech so firing the Rockets GM is off the table, even if NBA fans in China want him replaced. The NBA commissioner brought up a good point in mentioning that the NBA is an American brand, which stands for American values, including First Amendment rights to freedom of expression. He wants the NBA to stand by these American values as the league expands globally. In seeking an acceptable outcome for both the NBA and China, Silver has turned his attention to Yao Ming, former Rockets Center and current president of the Chinese Basketball Association (CBA). Silver stated that he and Ming have “mutual respect for each other’s political systems and beliefs.” Silver firmly believes he and Ming will be able to overcome the back lash following Morey’s tweet and continue to foster a symbiotic relationship between the NBA and China. The NBA head understands it is advantageous to be patient and wait for the public outcry to blow over before discussing a way forward with Yao Ming. This is largely because the league still receives 90% of its revenue stream from North America. Although NBA franchise valuation rose in the past year for all 30 teams, securing a healthy relationship with an emerging market like China is paramount to continuing this trend.
Arguably the best player in the league for the last decade also spoke out recently, pouring more gasoline on the fire.
“We do have freedom of speech, but there can be a lot of negative things that come with that too. I also don’t think every issue should be everybody’s problem.” — Lebron James
Lebron’s words portrayed an apologetic tone to the “wholly owned authoritarian regime” (in the words of Vice President Pence) of China that restricts freedom of speech. Shouldn’t everybody within NBA circles have each other’s backs? Or is this a conspicuous example of a conflict of interest? The Chinese sneaker market has exploded over this past decade and James’ massive deal with Nike surpassed $32 million. Although it is an American company, Nike’s revenue in China is $6 billion. Lebron James is arguably one of the world’s most popular athletes, so a good portion of Nike’s profits in China can be directly tied to him. In light of these business interests, it makes sense that Lebron would want to defend his image. Chinese sneaker brand Li-Ning is growing in popularity and even attracted Lebron’s best friend and former teammate, Dwyane Wade, to sign a deal. The Chinese market is where the most lucrative investments and partnerships are happening over this decade so it makes sense why James defended his brand.
Should more high-profile NBA players come out in defense of Morey or Lebron? Why were they so active to speak out about gun control and police brutality in the United States recently, but so reticent to speak out about one of the basic human rights that our Founding Fathers gave to every American? China is the second-largest global economy so it also makes sense why players with profitable investments overseas, such as Klay Thompson and Gordon Hayward, are remaining silent. The icons of the game need to have each other’s backs because this matter supersedes a few million dollars. Individuals shouldn’t be getting punished for speaking their minds on a controversial topic. In reality, athletes should not be treated like parrots to the public eye, but rather voice their opinions on the issue freely, utilizing their platform intelligently. Athletes can choose to remain silent or acknowledge other members within league circles who have spoken out. Additionally, it is worth pointing out that lesser-known players who don’t have massive shoe deals or other investment projects in China would be less likely to have a conflict of interest, but this doesn’t necessarily mean they are going to defend Morey’s behavior. They ultimately want the league to become one of the most popular global sports and irking China is not going to elevate the state of the NBA.
There’s something to be said in regard to how Commissioner Silver’s stance is different from coaches, players, and other executives in the NBA. Silver has a stronger platform to speak out on the league as a whole regarding controversial issues. Superstar players have different liberties to say what they need to say because their brand is directly aligned with lucrative deals in China. Conversely, coaches are much less known globally and would, therefore, have less of a conflict of interest, similar to lower caliber NBA players. For example, Gregg Popovich, the longest-tenured coach in the game, said Silver “came out strongly for freedom of speech” and that he’s been “a heck of a leader in that respect and very courageous.” Because they are not financially tied to China, coaches such as Popovich, who is well respected in the NBA community, can speak freely and support the commissioner in promoting the league’s values. Coaches manage the players on the court, while on the other hand, executives like Morey represent the entire team from a top-down perspective. With that being said, if Popovich had tweeted the image supporting the Hong Kong protests instead of Morey, there would have been less of a commotion.
Another perspective we must consider is that of NBA fans in China. They are finding new ways to watch their favorite teams online. They are still finding ways to buy their favorite team’s tickets and favorite player’s jerseys. Chinese fans realize that they are able to participate in leisure activities such as watching NBA games because of their country’s economic progress in the 21st century. The Communist Party’s policies have been largely responsible for China’s GDP growth and can just as easily take away these newfound recreational luxuries. The NBA is “an indispensable part of life,” J.C. Wang, a Chinese blogger echoes. Despite angry sentiments across the country directed towards Morey, many fans are still trying to watch their favorite teams. Above all, Chinese fans take more pride in their country than their love for the NBA. This could cause the government to eradicate streaming the league’s games in total and place heftier restrictions on third party sites as well.
The NBA has to decide whether they want to impose on the right to free speech in certain instances such as Morey’s tweet or continue to stay in their lanes with regards to First Amendment rights. Usually, the NFL is all about promoting the League’s values; on the other hand, the NBA is a very star-driven league, where each superstar athlete has a bigger platform to speak about social issues. However, the NFL has been similar to the NBA in recent years as it pertains to high-profile players speaking up about civil rights issues in the United States. For example, Colin Kaepernick took a knee during the national anthem of a preseason game in 2016 because he didn’t want to show pride “for a country that oppresses black people or people of color.” Kaepernick’s kneeling was a turning point that opened the door for nearly 3 years of protests and his eventual exit from the NFL. Many analysts believed Kaepernick was “blackballed” out of a chance to quarterback a franchise simply because teams didn’t want the negative publicity that came with signing him. Similar to Morey, Kaepernick wasn’t breaking any laws because the NFL does not require its players to stand for the national anthem. In spite of this, NFL front office executives were quick to realize the noise Kaepernick was causing and chose not to sign him after he opted out of his contract with the San Francisco 49ers. Numerous people feel that if Colin Kaepernick played in the NBA, the league would have treated him better since Adam Silver does a better job at protecting stars than NFL commissioner Roger Goodell. Star athletes run the NBA while conversely in the NFL, the shield and the NFL brand image dominate the sport.
Alibaba won’t totally slow down their streaming of NBA games because one of its co-founders is Joe Tsai, who has strong ties with front-office executives as the Brooklyn Nets owner. He stated that Morey’s comments were “damaging to the relationship with our fans in China.” In an open letter he penned on Facebook, Tsai enlightened the Western press about how China has a rich history of foreign occupation with successful protests, dating back centuries. He also mentioned that Chinese people show great pride in their territorial claims and when these lands got carved up in years past, citizens felt great shame. The Nets owner feels sympathy towards Daryl Morey because he believes he wasn’t educated on the rich history of China and why its citizens reacted the way they did to a tweet. All things considered, Joe Tsai will continue to be an integral link between the NBA and China to help overcome this issue and promote more unity.
With all of these perspectives considered, the best course of action for the rest of the owners is to not speak out in Morey’s defense. They have their own responsibilities pertaining to running the basketball operations of their respective teams. Since they have to make profits, tackling the government of one of the most powerful countries in the world would be a PR nightmare. The league wants to build bridges through basketball games with fanbases of other countries, serving to connect diverse groups of people. Despite the fact that the NBA’s revenue stream from China is approximately 10%, the league can withstand this short-term Chinese pushback because of its footprints in other emerging markets like India and certain regions of Africa. Both of these countries have large populations and have growing ties to the NBA with the largest Jr. NBA program, and the Basketball Africa League, respectively. The NBA has also taken measures over recent years to extend the duration of their season so that with the exhibition, regular, postseason, and Summer League the NBA runs 10 months a year. With a nearly year-round cycle of games, the NBA’s constant stream of revenue greatly assists its challenge to soccer to become the world’s most popular and global sport.
Tying everything back to Morey’s tweets, the NBA is willing to stay patient, while still promoting its values. This strategy could cause the league to take a step backward in order to eventually take two or three steps forward. Recent history has indicated that Chinese boycotts caused short-term damage but a recovery in the long-term. In particular, in 2012 the Chinese boycotted Japanese cars and it resulted in feuds over claims to the East China Sea. Japanese car sales sank 12% but financial statements reported a recovery in sales by the end of the year. The NBA could follow a similar model by turning their attention to regions that are accepting and willing to showcase their brand. Focusing on growth both domestically and in other emerging markets, while waiting for a likely failed boycott attempt in Hong Kong, will be the best plan of action as opposed to challenging China head-on.
