Eric He | Yahoo Sports
NBA players and teams have left China, but the back-and-forth between the two sides has not stopped. On Saturday, Chinese state broadcaster CCTV issued a warning to commissioner Adam Silver.
According to the South China Morning Post, in a commentary, CCTV said Silver could face “retribution” for defaming China and supporting Daryl Morey, the Houston Rockets general manager who tweeted support for the Hong Kong protests and set off an international controversy between the NBA and China.
Earlier in the week, Silver had revealed at the Time 100 Health Summit in New York that China had asked the NBA to fire Morey over the tweet, which read “Fight For Freedom. Stand With Hong Kong.” The commissioner said that there was “no chance that’s happening.”
He added: “There’s no chance we’ll even discipline him.”
The Chinese government, through a spokesperson, denied that it made the request.
Silver is now clear on NBA’s position
Silver has clarified the NBA’s position in recent public statements after his initial comments ignited criticism in the United States. The league’s first statement called Morey’s tweet “inappropriate” and said the NBA was “extremely disappointed.”
Despite admitting that the financial losses as a result of Morey’s comments have already been “substantial” and “may continue to be fairly dramatic,” Silver said that he is willing to deal with the consequences and protect Morey’s freedom of expression.
This, no doubt, has infuriated China. In the editorial, CCTV claimed Silver “fabricated lies out of nothing and has sought to paint China as unforgiving” in order to “please some American politicians.” After Silver’s initial statement, politicians on both sides of the aisle criticized the league:
The CCTV editorial continued:
Silver has spared no effort to portray himself as a fighter for free speech and used freedom of speech as an excuse to cover for Morey, who voiced his support for the violent actors in Hong Kong. This has crossed the bottom line of the Chinese people.
Tension is far from over
While this appears like a bunch of hot air from the mouthpiece of the Chinese government, it is an indication that the two sides are far from reconciling. China stopped broadcasting preseason games and many sponsors have pulled out. Some games are back on the airwaves, but it might be awhile before the tension dies down.
At the Brooklyn Nets preseason game on Friday at the Barclays Center, hundreds of protestors filled the stands donning “Stand With Hong Kong” shirts. NBA players, coaches and executives have strayed from stating their opinions on the issue as to not fan the flames, with LeBron James’ panned remarks earlier in the week as an example.
Ironically, it was James’ criticism of Morey that created an uproar in the United States and led to people in Hong Kong burning his jersey.
Granted, issues surrounding a sports league that is worth billions of dollars with or without business in China seems paltry compared to what the Hong Kong protestors are fighting for. But as long as China keeps pushing back on the NBA over this issue, Adam Silver has a rocky road ahead.
For NBA and other sports leagues, a difficult tightrope to business in China
Mark Fainaru-Wada & Tonya Malinowski | ESPN
Every time the NBA-China scandal seems to be fading, another eruption underscores the increasingly difficult tightrope leagues, athletes and media companies walk as they do business with communist China.
Just in the past few days, LeBron James unleashed a furor from fans in both Hong Kong and the U.S. when he described Houston Rockets general manager Daryl Morey as “misinformed or not really educated” for his seven-word tweet that ignited the initial uproar. Then, NBA commissioner Adam Silver acknowledged his league had lost millions since Morey’s tweet and stated that the Chinese government had asked him to fire Morey. But the Chinese foreign ministry turned around and denied Silver’s claim, putting another round of pressure on the commissioner, just as normalcy seemed to be returning.
And on Friday night, hundreds of activists attended the Nets-Raptors preseason games wearing shirts and holding up signs in support of pro-Democracy protestors in Hong Kong.
The NBA has far and away the largest Western sports presence in China, but it’s hardly alone in having to navigate the challenges of doing business there. The NFL, Major League Baseball, the NHL, MMA, esports leagues — virtually every professional sports entity has worked to establish a foothold there, wooed by the country’s exploding economy and a population more than four times larger than that of the United States.
But according to experts, and as the NBA discovered swiftly, China’s burgeoning power has wrought a government even more committed to controlling the flow of information to its people and stifling dissent.
“Both the state and Chinese people are aware of the leverage they have over profit-seeking entities that are desperate to maintain access to the Chinese market,” Jonathan Sullivan, the Director of China Programs at the University of Nottingham Asia Research Institute, said by email. “Of course, it is the state that sets, adjudicates and enforces the rules. And if you transgress you can expect to be punished, at a time and method of the state’s choosing.”
Bill Bishop, a former media executive who has spent more than a decade living in China and analyzing the country, says the dynamics recently making headlines are not new.
“But the NBA events … made it much more of a mainstream issue,” he says. “In many ways, it’s harder for the leagues to keep their souls but also expand into China.”
Nevertheless, the NBA’s numbers in China reveal why leagues have persisted in trying to find their footing there. Plainly, there’s just so, so much money to be made.
Earlier this year, the NBA expanded its deal with internet behemoth Tencent to stream live games and make an array of content available to the company’s 1 billion users. The new contract, which begins next year, pays the NBA $300 million annually for the next five years — representing a threefold increase from the previous deal. (In 2016, ESPN and Tencent agreed to a five-year distribution agreement in which ESPN provided content to be shared across Tencent’s many platforms in China.)
The NBA has a long-standing contract with government-run CCTV to broadcast games live throughout the country, and while the financial specifics of that deal aren’t clear, the NBA has suggested the benefits are enormous.
“The value we generate from CCTV through sponsorships and all of our other initiatives — it’s hard to put a price on that,” David Shoemaker, then the CEO of NBA China, told Forbes in 2017.
Beyond its broadcast and social media deals, the NBA makes money in China from corporate sponsorships. There also are NBA training academies, NBA-themed play zones for kids in malls, NBA-themed “lifestyle complexes,” an NBA 2K League for gamers; an NBA youth development program, and more. On top of all that are the millions made by individual players through their own sponsorship contracts with Chinese companies.
Sports Business Journal recently estimated the NBA’s presence in China was worth $5 billion to the league.
“I don’t know a Chinese male that is not crazy about the NBA,” said Jim McGregor, a marketing expert who has lived in China for three decades and previously served as the chairman of the American Chamber of Commerce in China. “I’m telling you, living on the ground here, I’m from Minnesota and every time I meet somebody here, they talk about the Timberwolves.”
This is exactly what every other league is chasing as they look to China.
Across the sports world, the message has become clear.
“The Chinese government has been very good about exporting their campaign of terror, if you will, to corporations, including sports entities, around the world,” says John Pomfret, a former Washington Post Beijing bureau chief and author of a book that traces the history of U.S.-China relations. “Everyone is afraid, and they’re afraid because the red line has been moving in a negative direction for a long time.”
If that wasn’t already clear to the NBA, it is now. After the Morey tweet, 11 of 13 Chinese companies that have sponsorship deals with the league temporarily halted them. Long-planned broadcasts of two exhibition games were canceled, and the broadcast partnerships, including with Tencent, appear in limbo. CCTV and Tencent have said they would not show or stream Rockets games, and Silver made his comment Thursday at the Time 100 Health Summit that the Chinese government had asked him to fire Morey.
“We said there’s no chance that’s happening,” Silver told ABC’s Robin Roberts. “There’s no chance we’ll even discipline him.”
He added, “Our games are not back on the air in China as we speak, and we’ll see what happens next.” All of this serves to underscore the push and pull league officials, coaches and players are facing as they try to weather the controversy.
“These players have a real issue if they’re very active speaking out in the U.S., but then when they come to China, they clam up,” says Bishop, the former media executive. “From a business perspective, that makes sense, but from a reputational perspective, that’s trouble.
“You have political systems that diverge, and the players are stuck in that divergence. Obviously they want to keep China’s money and the Chinese market, but they can’t do both and not look hypocritical.”
With the NBA regular season set to start Tuesday and no word yet on whether games will be streamed by Tencent or aired by CCTV, or whether any of the sponsors will return, the NBA’s status there is uncertain. There’s one school of thought that says basketball is simply too popular and important to China for the government to punish the league further. In the past couple of days, Tencent has returned to streaming at least two preseason games.
“Look, this is bad for the Chinese government right now,” says McGregor, the marketing expert who has written two books on doing business in China. “The NBA is nothing but good; it provides entertainment, keeps people busy, gives them something to talk and be passionate about, and if they’re doing all that, they’re not on the streets complaining about the government.”
At the same time, it’s unclear what, if anything, the league could or would do at this point if asked to mollify the Chinese.
Says Bishop, referencing the pingpong diplomacy that initiated a warming of relations between the countries back in the early 1970s: “One of the jokes going around is, U.S.-China engagement started with pingpong and ended with basketball.”
Producer William Weinbaum and researcher John Mastroberardino of ESPN’s Investigative and News Enterprise Unit contributed to this report.
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