The NBA can win a standoff with China
A lot of Americans are not happy with how the National Basketball Association has handled its recent conflict with China. After Houston Rockets general manager Daryl Morey tweeted in support of pro-democracy protesters in Hong Kong, the Chinese government, businesses, and citizens reacted with fury. Players and owners came out of the woodwork to scold Morey for standing up in defense of classic American values. Journalists, politicians and critics — including yours truly — found the NBA's surrender to China to be be a craven spectacle.
But the NBA arguably has a lot of leverage over China. More to the point, it may be figuring that fact out.
Admittedly, a lot of statements from the league have been less than encouraging. The NBA initially called the fallout from Morey's tweet "regrettable." Brooklyn Nets owner Joe Tsai decided Morey needed a lesson in China's historical experiences with western colonialism. And Lebron James, a star player known for speaking up against injustice, called Morey "misinformed" and "not educated."
Yet those statements are just that: statements.
Thus far they have not translated into action. Morey is still employed, and has not even been punished in any way. In a recent interview with ABC's Robin Roberts, NBA Commissioner Adam Silver made it clear that's how things are going to stay. While a spokesperson for the Chinese Foreign Ministry denies it, Silver explained that "we were being asked to fire him, by the Chinese government, by the parties we dealt with, government and business." Lebron himself allegedly argued that Morey should be punished for putting NBA players in a public relations bind.
"We said there's no chance that's happening,” Silver said, in response to the possibility of firing Morey. "There's no chance we'll even discipline him."
There have been real financial and economic consequences for Silver's stance: Multiple Chinese companies and sponsors cut ties with the Rockets over Morey's tweet. Both Tencent Holdings, a Chinese company that enjoys a $1.5 billion deal to stream NBA games in China, as well as the country's state-run broadcaster CCTV, stopped showing Rockets' games.
"Daryl Morey is supported in terms of his ability to exercise his freedom of expression," Silver said a few days later, clarifying the NBA's initial "regrettable" statement. "The NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues," he added elsewhere. "We simply could not operate that way."
In response to that, CCTV announced its blackout was expanding beyond Rockets games, and that it wouldn't broadcast any NBA preseason matches at all.
There's a tremendous amount of revenue potentially at stake here: Over 500 million Chinese fans watched NBA games and programming in 2017. That prompted Roberts to ask Silver: "In taking your stance and being supportive [of freedom of expression] are you willing to absorb the possible financial loss that may come from the support?"
"Not only willing, but we are," Silver replied. "The losses have already been substantial. Our games are not back on the air in China as we speak. And we'll see what happens next."
Silvers also reiterated the earlier distinction he'd made between regretting the anger that had been caused on the Chinese side, and actually opposing what Morey had said or clamping down on his freedom to say it. (Or clamping down on Tsai's or Lebron's freedom to criticize Morey in turn.) "We wanted to make an absolutely clear statement that the values of the NBA, these American values — we are an American business — travel with us wherever we go," Silver said. "And one of those values is free expression."
Many fans and observers have wanted Silver to go further — come down explicitly in support of Morey and Hong Kong protesters, and against China's autocratic government. But even the position Silver did take represents a very bright line in the sand when you consider China's justification for cutting the NBA preseason games. "We believe any remarks that challenge national sovereignty and social stability do not belong to the category of free speech," CCTV bluntly put it. That the possibility of real revenue losses for the NBA over this stand elicited a simple so-be-it shrug from Silver also demonstrated real backbone.
No doubt, some of that backbone may derive from a commitment to American values. But a lot of it may derive from the NBA realizing its own economic leverage as well. Basketball has been wildly popular in China ever since it was first introduced in the late 1800s. Chinese businesses and state-owned broadcasters no more want to anger 500 million fans and potential customers than the NBA does. Bloomberg's Adam Minter argued that if the boycott of NBA programming continues, Chinese viewers will probably get annoyed fairly quickly and start finding workarounds to get the content.
History also has lessons here. In 2012, for example, a Chinese boycott of Japanese cars broke out in response to a fight between the two countries over territorial claims in the East China Sea. Japanese car companies' market share in China plunged 12 percent in a month. But then sales came back by the end of the year. "Chinese consumer boycotts have historically been short-lived and relatively painless," Minter wrote — further noting that the NBA's popularity in China dwarfs that of any particular car brand.
According to CNBC, there's a growing sense within the NBA that ultimately that popularity will win out. "Some diplomacy will be necessary," but "they are going to want the NBA back," one executive said.
Thus far, the fear has been that those hundreds of millions of Chinese fans were an advantage China could hold over the NBA. Eventually, the latter would throw American values overboard in order to keep the money rolling in.
But that's a sword that cuts both ways: Now that China has let the proverbial camel's nose of capitalist consumerism into the tent, the NBA can hold those fans and their dissatisfaction over the Chinese government as well. And American basketball may well discover its leverage is the greater.
Want more essential commentary and analysis like this delivered straight to your inbox? Sign up for The Week's "Today's best articles" newsletter here.