Cash Still Rules – The NBA and China

Much has been made about Houston Rockets GM Daryl Morey’s tweet in support of the protesters in Hong Kong, and the subsequent taking down of said tweet and replacement of it with an apology. Rather than try and play moral compass, how about we look at why things unfolded they way they did instead?

The NBA has made China a focus going back decades. Just as other American companies have assessed, the NBA has viewed China as an untapped treasure trove of potential for its business and revenue stream. NBA players have visited regularly and the NBA has permanent offices in mainland China. The NBA’s partnership with China is an important, if not vital part of the business of professional basketball.

Of important note, the Rockets have been at the forefront of the U.S. – China relationship in the NBA, especially since they drafted Yao Ming in 2002. In fact, Yao would not have been allowed by the Chinese Basketball Association (run by the Chinese government) to play in the NBA unless there was a guarantee that the Houston Rockets drafted him with the #1 pick. It goes without saying that the Chinese have been exerting their influence over the NBA long before the current Morey/Hong Kong spat.

SHANGHAI, CHINA – OCTOBER 09: An empty sponsor booth is seen outside the Mercedes-Benz Arena ahead of NBA Shanghai Game 2019 between Brooklyn Nets and Los Angeles Lakers on October 9, 2019 in Shanghai, China. (Photo by Yin Liqin/China News Service/VCG via Getty Images)

With the above as the backdrop, we return to the issue at hand, namely, how the NBA and its community have reacted to the protests in Hong Kong. And I know what you’re thinking: “The NBA has been at the forefront of social justice issues, so is this just liberal hypocrisy?” In a way, yes. But you’re not asking the right question.

The NBA has been willing to let its players, coaches, and owners speak on U.S. social justice issues in large part because those play well to the target demographics, most notably, young people. The NBA isn’t targeting old, white conservatives the way that the NFL does. The NBA’s target audience is much different, and as such, what flies in the NBA is going to be different than what flies in other sports leagues.

Another important aspect of the NBA’s willingness to engage on U.S. social justice issues is how they impact the bottom dollar. I guarantee you that it did not go unnoticed the way that Nike’s stock reacted after it signed Colin Kaepernick (note: it went up significantly). Social justice issues in the U.S., mostly in the large cities, are not going to be controversial the way that they would be in, say, Trump country. Appearing to do the right thing happens to be good for the NBA’s business. It’s a win-win for them.

(Photo by Angela Weiss / AFP) 

However, for the NBA, China and the Hong Kong protests are a whole different ball of wax. According to CNBC, the NBA derives 10% of its revenue from China. That’s a lot of money and a sizable chunk of a company’s revenue stream. Backing the Hong Kong protesters may play well here at home. But in China? Well, the Chinese government, which controls all things Chinese basketball, did not react as favorably.

So the question becomes, is the NBA willing to forego 10% of its revenue to take a stand against Chinese suppression and human rights violations? And the answer seems to be a resounding “no.” You may be thinking to yourself that, given the money at stake, it’s not really an unfair business decision. However, you have to remember, the NBA isn’t a company with millions or even hundreds of shareholders. CNBC nailed this in its analysis. The NBA is essentially 30 billionaires deciding what they want to do. And you know what? Those 30 billionaires’ lives wouldn’t change one iota if they had to forego the money that China garners for them.

(Note: This will be a much more difficult situation for public companies with shareholders, as those companies are beholden to bottom lines as a matter of legal duty. Taking a moral stand against China could be quite difficult for, say, Apple.)

(Photo by GREG BAKER / AFP) (Photo by GREG BAKER/AFP via Getty Images)

Moral of the story? Don’t look to your sports leagues for ethical guidance. Just look at the history of sports leagues if you don’t believe me.

NBA and China (see above).

The MLB looked the other way on rampant steroid use to save itself from financial tumult following a players strike.

The NFL hid the impact of concussions on the brain from its own players for decades.

NCAA universities and USA Gymnastics showed us that they were willing to turn a blind eye to the raping and sexual abuse of children. RAPING and SEXUAL ABUSE of CHILDREN. 

Read that last sentence again and then tell me: When are we going to stop being fooled? Because, when it comes to the business of sports, cash still rules.

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