NBA vs China

In what has been wrongly branded a stand-off, the NBA is carefully planning how to repair its damaged business relationship with China. A single tweet about the months-long protest in Hong Kong briefly jeopardized an estimated $4 billion market for the world’s most successful basketball league. That’s not a standoff. That’s the closure of a one-way street. The NBA needs China more than China needs the NBA. The American organization must now weigh the worth of the value it places on freedom of speech.

It all began in Oct. 4, with Houston Rockets general manager Daryl Morey taking to Twitter to express his support for the protests in Hong Kong. The retribution was swift, the retraction just as quick. China’s government network CCTV announced it would pull its broadcasts of the NBA’s preseason games, and Chinese online stores stopped selling Rockets merchandise. Morey’s boss, Rockets owner Tilman Fertitta said that Morey does not speak for the franchise, and the offending tweet was taken down. But streaming service Tencent, which has a five-year, $1.5 billion deal with the league, stopped showing Rockets games in China. Shots fired. In a painful twist, former Houston Rockets top draft pick and now Chinese Basketball Association head Yao Ming announced the cessation of cooperation with the team. When Yao Ming played for the Rockets, even regular season games drew an estimated additional 20 million Chinese viewers. Today, roughly 800 million Chinese watch (or is it watched?) NBA games.

Until the early 1990’s, NBA personalities played it safe politically. But succeeding generations, realizing their power in a media-savvy environment, have spoken put vociferously on issues ranging from racial inequality, labor relations, immigration, poverty, US foreign policy, and others. But for the most part, those were issues internal to the US. Now, however, China is giving a frightening warning that, as a superpower unto itself, and an Asian nation sensitive to loss of face, it will brook no interference – or even criticism – from an entity which profits from its sheer market size.

NBA commissioner Adam Silver apologized but declared no punishment for Morey. He later revised his statement expressing support for freedom of speech. NBA superstars like Golden State Warriors guard Steph Curry have been circumspect about their comments, acknowledging that it is a complex issue. Others caution blindly taking the moral high ground with so much business at stake. It took the league over a quarter of a century to gain the trust of the huge Communist country, beginning with those tentative trips by the Atlanta Hawks in the late 1980’s. The NBA was able to convince Chinese authorities to allow Yao to be drafted in 2002, after Wang Zhizhi rebelled and sought a better future in America. In 2004, the league held its first preseason games in China, with the Rockets and Sacramento Kings playing in Shanghai and Beijing. That formally announced that the Middle Kingdom was open for business.

To be fair, China and its media outlets have scaled back their outrage, and regular broadcasts of NBA preseason games continue. State media have ordered that the issue no longer be prolonged, and the headlines have gone on to other matters. Meanwhile, other foreign businesses interested in earning from China’s 1.4 billion consumers are analyzing the situation to avoid making the same misstep. The country’s culture is not the same as straightforward American style. In Mao Zedong’s time a Communist Party leader, he abolished sports in China entirely. Entire books like “Operation Yao Ming” discuss the complexity of dealing with Chinese government. They may say one thing and mean something else entirely.

What is alarming to note is the severity of the reaction, given that Morey is not even a team owner or league official. But China has been very sensitive about public perception of its territories like Taiwan and Hong Kong, even after the latter was returned to them by the British in 1997. China is aware of its weight in the world. After the dissolution of the Soviet Union in 1991, the US was considered the only superpower in the world. That is no longer the case, and America has a very complicated and messy trade relationship with China. Some would think that the US wants a billion-dollar war with China, which would be cheaper than paying off a trillion-dollar debt. Obviously, other countries and the United Nations would intercede.

As a country deeply involved with China, the Philippines can only look closely at this issue and shudder. China has grown stronger and more confident. If it can hold its own against an established power like America and tame over utilities and resources of smaller countries that owe it money, it can pretty much do whatever it wants. Politically, much of the world disagrees with China on its politics and human rights record. But voicing disagreement and doing something about it are two vastly different things. When a bully says “What are you going to do about it?” there is no correct, neat answer.

For now, the rift will be healed, and common interests pursued. After all, the NBA is still not something that China can make a knock-off of. But if something as small as a tweet could not be let go of, it sends a chilling signal to the global business community. Freedom of speech comes at a price, and that price is access to the world’s largest market. It’s hard to think that anybody will not bow down to that.