NBA suffers major consequences following a single tweet

On Friday, Oct. 4, Daryl Morey, the general manager for the Houston Rockets, was in China for an NBA preseason event when he released a tweet that unintentionally broke the bridges connecting the National Basketball Association (NBA) with their Chinese affiliates, while also garnering immense criticism from people in both China and America. The tweet read: “Fight For Freedom. Stand With Hong Kong.” China is the world's second-largest economic entity, following the U.S. The country's power is reflected in its financial contribution to not only the NBA, but also to many prominent American companies that conduct business in China such as Apple, Nike and General Motors. Only 40 years ago, China was a largely poor nation with more than 30 percent of the population living in poverty. In 1978, large economic reforms led to the growth and success of agriculture, which in turn led to the privatization of many state-owned enterprises. As China’s economy opened to the world, many companies took advantage of the country’s cheap labor. China’s economy grew an average of ten percent a year in the decade following 1990. Thus, the global economy has come to depend on China’s enormous market. In 2002, the Houston Rockets drafted star Chinese player Yao Ming and amassed a large viewership from China. The NBA earns an estimated $500 million annually from partnerships with Chinese Television networks and works closely with prominent Chinese companies such as the sportswear brand Li-Ning, Shanghai Pudong Development Bank and the Chinese Basketball Association.  Since this tweet’s deletion, China has revoked sponsorships with the NBA, suspended their preseason broadcasting deals and imposed enormous criticism on the organization.  With China as the NBA’s largest consumer market outside of North America, the financial losses are significant. NBA China, a branch of NBA business that is valued at $5 billion, has lost millions and is in jeopardy of losing more. Despite the consequences unraveling from Morey’s tweet, he will keep his position as general manager. According to Time 100 Summit, NBA commissioner Adam Silver believes that the monetary ramifications of Morey’s anti-government tweet already seem to be substantial. “Our games are not back on the air in China as we speak, and we’ll see what happens next… I don't know where we go from here. The financial consequences have been and may continue to be fairly dramatic,” Silver said, as reported in time100summit.com. The league also received heavy criticism for conforming to the demands of the Chinese government rather than supporting Morey’s right to free speech. Both Democratic and Republican lawmakers have expressed disdain towards the NBA for conceding to China, which many see as not supporting democracy. “The NBA wants money, and the communist party of China is asking them to deny the most basic of human rights. In response, the NBA issued a statement saying money is the most important thing,” Senator Ted Cruz said, as reported in washingtonpost.com. The NBA is not the only organization bowing to China. In order to ensure access to the Chinese market, Hollywood has censored many of its movies for years to paint a picture that appeals to the Chinese government. Content that producers think may threaten a film’s success is often edited or removed.  China has a population of over 1.3 billion people, an enormous number compared to America’s population of approximately 327.2 million. Because of this, western companies work to appease Chinese authorities. Conforming to Chinese censorship opens up the door to China's immense global market and millions of potential consumers. Their government censors almost all media in the country; therefore, brands like the NBA must be extremely cautious in order to maintain a stable relationship with the nation. Thus, the NBA is struggling to balance its economic aspirations in China with American democratic expectations.  Lebron James, star player for the Los Angeles Lakers, voiced his opinion regarding the unrest surrounding Morey’s tweet in a pre-game interview. “I don’t want to get into a feud with Daryl Morey, but I believe he wasn’t educated on the situation at hand, and he spoke… And so many people could have been harmed not only financially, [but] physically, emotionally, spiritually. So just be careful what we tweet and say and do, even though, yes, we do have freedom of speech, but there can be a lot of negative that comes with that, too,” James said, according to cnbc.com.  James’ comment stirred major backlash on social media, prompting protests against James by Hong Kong supporters. Many supporters held signs saying “Thank you, Morey” and even destroyed James’ jersey. Shortly after speaking to reporters, James turned to Twitter in an attempt to clear his name after his statements. “I do not believe there was any consideration for the consequences and ramifications of the tweet. I’m not discussing the substance. Others can talk about that,” James tweeted.James is known to voice his opinion surrounding political issues in the U.S. and has a reputation for speaking honestly. His tweets came as a shock, as many expected James to authentically support free speech when instead he criticized Morey. Another company that has relations with both James and China is Nike, which earns over  $6 billion in revenue from China yearly and James subsequently takes roughly $32 million annually in his deal with the brand. Therefore, James’ statements apologizing for Moreys’ offence to the Chinese regime may have been an attempt to mitigate potential damage to his business relationships. Despite the dramatic dent in profit due to the financial and political consequences stemming from Morey’s tweet, the NBA will continue to generate immense revenue. Last year alone the organization made almost $8 billion, and each of the 30 teams has an average valuation of $1.9 billion. As a staple of the American sports scene, the NBA undoubtedly will continue to prosper even in the face of a tarnished relationship with China.