NBA, Hong Kong, Beijing and liberty

Of the over seven billion people in the world, there must be a hundred million who watch the NBA games or are familiar with the NBA basketball games. Pre-season and some season games are now played in many cities around the world like in Japan and cities in Europe and Asia including Shanghai and Shenzhen. In China it has become a $4 billion business in terms of game attendance, TV coverage, sponsorships and licensing of NBA garments and other products.  Worldwide, including in the U.S. the NBA is a $100 billion business with at least a 100 million audience, so the recent issue of the NBA with Beijing matters.

The hullabaloo came about because of a comment/tweet by Houston Rockets GM Morey supporting the ongoing demonstrations/protests in Hong Kong. The Chinese government objected, so there were apologies from the Rockets and some officials of the NBA. The reactions of some U.S. government officials, some other world leaders, and citizens/netizens were against the apologies. It was criticized as an assault on freedom of speech and bowing down to Chinese authoritarianism. The following day, NBA Commissioner Adam Silver came out on all media disavowing the NBA apology and that NBA respects the rights of the every American to express their opinion on political beliefs. Subsequent to this, China cancelled all except one, the pre-season NBA games in China, cancelled the airing of the regular games in nationwide TV, and backed out on many sponsorship deals.

The real and opportunity losses of the $4 billion NBA value in China will hit both the NBA and their Chinese counterparties. It will more damaging to the Chinese side as it also covers the manufacturing side which are mainly in China, while the royalties and the licensing fees will be will be less. The growth potential of this business has been set back especially at a time when there are on-going trade talks between the U.S. and China on tariffs and intellectual property rights. To the NBA and China, the amounts may be insignificant and are mere blips, and the damage can be repaired over time and it will be business as usual.

From the political perspective, it can argued that it would have been better for China to not make an issue of the incidents, because it just highlighted the HK problem not just to the world but also to its own people in mainland and other Chinese all over the world. The U.S. had just sanctioned China of their treatment of the Uighurs minority in northern China, and there are the rising objections on the onerous financial deals of China with developing countries, on top of the 4 months of demonstrations in HK. It reinforces the perception of China’s intolerance of dissent of any kind. At a time when China is showing its military and economic power, as highlighted in the Communist Party 70th Anniversary parade in Beijing, objecting and flattening any dissent may be overkill. It could be a case of Beijing being uncomfortable and uneasy of its new role a world superpower. Maybe over time it will settle down and exercise its proper role and actions.

From a historical and ideological perspective, this is not really surprising. World power and leadership changes. There was Rome; there was Greece, Spain, the British Empire, Germany, Japan, and the Chinese dynasties that were once the greatest powers economically and militarily. Then there is also the continuing struggle between democracy and authoritarianism, that now 50% of the countries are some kind of democracies and the other half totalitarian. The ongoing demonstrations in Ecuador, Peru, HK, Iraq, Venezuela, and even Russia are all about “Life, Liberty, and the Pursuit of Happiness”. Governments and nations will rise and fall on these aspirations.