There was a lot of talk this past week about the escalating tension between the NBA and China. It’s a complicated story, but in a nutshell, Daryl Morey, an executive with the Houston Rockets posted a tweet expressing his support for protests that are currently occurring in Hong Kong. The protests are over a variety of civil liberties and are directed to the mainland China government. Chinese companies and the government were angered by the tweet given the NBA’s growing presence in China. Their reaction was harsh and swift, and included banning any broadcast of Houston Rocket basketball games in China. The NBA currently generates about 10% of its overall revenue from China. Morey deleted the tweet but the damage was done. The NBA, who has a history of supporting freedom of speech for its players, coaches and management, initially was critical of Morey for his comments. However, the NBA miscalculated the public reaction in the U.S. to their response and was sharply criticized in social media for the hypocrisy of supporting their players and management when they address civil rights issues in the U.S. but condemning them when they are critical about civil liberties in China. NBA Commissioner, Adam Silver, issued a statement that essentially said that the NBA respects China has a different political system than we have in the U.S. but will not regulate what their players, employees or owners say about political or social issues. China issued their own statement that expressed their dissatisfaction with Silver’s comments.
Silver is currently in China where he is presumably trying to negotiate a favorable outcome for the fiasco. I believe this issue will not be isolated to the NBA and will become a challenge for a large number of U.S. companies and for capitalism itself. Will American consumers continue to support companies that manufacture their products in China? Will China retaliate against other companies like Apple if their employees make critical statements about China? The answers to these questions are not yet clear, but the more publicity the NBA versus China situation attracts, the more these questions will be raised.
The NFL markets its brand as well as any enterprise in the world. I heard a comedian once say that the NFL is so popular, it has its own day. NFL football is huge. Each NFL franchise brings in approximately $400M a year in revenue; almost double the annual revenue of NBA teams and 2 ½ times as much as MLB clubs.