It’s no secret that the NBA is currently embroiled in constant crisis control with the Chinese government. Who would have thought in 2019, the NBA would become an enemy of the Chinese people? Normally, when a situation like this develops, there’s a smoking gun….a catalyst behind the explosion of press and politics. In this case, the smoking gun is a computer genius with an MBA from MIT….presiding over one of the most popular entities in “The Great State of Texas”….the epicenter of heated gun control debates.
Houston Rockets General Manager Daryl Morey is one of the most respected executives in the basketball world. Morey is also considered a catalyst for another explosion, albeit positive: The rise of analytics use in basketball operations. Because of him, the “stat-nerds” can now make contributions to the game they love.
But how did Morey go from respected genius GM to the spark for heightened geopolitical tension…and eventually persona-non-grata in one of the world’s most notorious economic powerhouses?
Taken from a page of “Teenage Social Media 101”, Morey posted a picture that he shouldn’t have (at least to some people). A picture in support of the people of Hong Kong, and their current protests of not only the government of Hong Kong, but the Chinese government.
This is where a quick history lesson is well needed, for fear of being otherwise “misinformed” or “uneducated” on the topic.
The history of tensions between Hong Kong’s people and China intriguingly enough is a side effect of British rule. Hong Kong was a British colony from 1842 until 1997. When the Brits left, the Chinese came back for their land (which it technically was before they lost it to Britain). However, the Chinese gave Hong Kong special privileges (like its own local government, that could only be superseded by the Chinese government in specific situations). Sounds kosher right?
But the further you look into the makeup of the local Hong Kong government, the more questions arise. In order to understand, I took to British news conglomerate BBC, who has their own guide on the history of the tensions, and current structure of the Hong Kong government.
Per the BBC article, compiled by Helier Chung and Roland Hughes, the head of Hong Kong, called the “Chief Executive” is determined by an electoral body of 1,200 politicians who are allegedly in favor of Chinese rule. With pro-Chinese members infiltrating the upper echelon of the Hong Kong government, citizens fear the transformation of Hong Kong to “just another city” of China. To make matters worse, only a paltry 6% of constituents are eligible to vote for the electoral body. How’s that for democracy?
On the other hand, China has no democracy. With one of the most hard-lined governments in the world, there have been a majority of allegations in which “dissidents” have been jailed, tortured, killed, or just disappeared. The Chinese government also implements strict censorship of media within the country, and coming into the country. This is the by-product of no-opposition Communism introduced via the Soviet Union.
So what happens when you combine governmental exclusion, Chinese meddling, and blunt policing: Riots and protests, just like the ones that have been going on in Hong Kong.
This brings us back to Daryl Morey. All Morey did was post a picture in support of people who felt something had to be done. But one of the cardinal rules of business was broken by Morey:
Do not affect the Big Boss Man’s bottom line!
The Houston Rockets by-and-large is China’s most popular team (or was). One reason for this is Yao Ming. The 7’6 wonder of the world was China’s best basketball product…and ended up becoming a star for the Houston Rockets. Houston benefits from China so much that it has been reported the team could lose almost $25 million from the backlash of Morey’s tweet.
The NBA as a league has also benefited from the success in China. According to Yong Xiong, a contributor for CNN, NBA China, a subsidiary that the NBA developed to oversee Chinese operations, events, and the like was said to have been worth upwards of $4 billion. Another crucial way that China also has a role in the NBA is player salary. Keith Smart from Yahoo Sports released an article of his own, claiming the Chinese backlash could affect the NBA salary cap. Lost revenue from China could significantly hurt the NBA’s BRI (basketball-related income), which could lead to a 15 percent decrease in the salary cap. The NBA salary cap is calculated by using BRI projections. So any decline here would lead to an overall decline in money available to the players, which falls between 49 and 51 percent of the total BRI.
This is why as soon as Morey could blink, Tilman Fertitta the owner of the Rockets had released his press statement, with typical jargon of “Morey’s comments do not represent us”, and ultimately Daryl Morey had to release his version. The smoking gun in Texas was now subjected to gun control.
Chinese sponsors were rapidly pulling out of deals with the Houston Rockets and the NBA (and still are). One example is the Chinese company, Tencent. Tencent, who have been responsible for showing NBA games to almost 500 million people in China (per Yong Xiong), backed out of providing the service. So far China has been on offense and the NBA has been on defense.
This has now gone from an errant tweet to a full-scale crisis. Political pundits are now discussing it, Adam Silver had to release a statement (although considered a weak statement by some), players and even coaches are being questioned. But it is what has happened at press conferences when NBA personnel are questioned, that has garnered the biggest impact, and is giving fans a taste in their mouth so sour….it’s unimaginable.
At some press conferences, PR staff directly intervened when questions were asked. Steve Kerr, a well-known critic of the current United States administration, gave a response that seemed so timid, President Trump compared him to a little boy. Players who are typically at the forefront of bringing social issues to the limelight, are now nowhere to be found…that is until the King voiced his opinion:
“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.” – LeBron James
James would further go on to elaborate on Twitter:
“My team and this league just went through a difficult week. I think people need to understand what a tweet or statement can do to others. And I believe nobody stopped and considered what would happen. Could have waited a week to send it… Let me clear up the confusion. 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.”
This is an epic turnaround from one of the game’s most vocal leaders in regards to issues of human rights. If you didn’t know this statement was made by LeBron, who would you identify it with? It’s likely that you would think this was made by a sympathizer of the Chinese government. James is currently being decimated on Twitter with tweets and memes essentially stripping him of his “Social GOAT” status. Fans are upset and rightfully so.
When African-American teenager Trayvon Martin was shot and killed in Florida, LeBron was leading the charge in making people aware. He posted a picture of himself in a hoodie with teammates, and a slogan “We are Trayvon Martin.”
When racist audio tapes of now-disgraced, ex-Clippers owner Donald Sterling were leaked, LeBron publicly denounced him and said there was no place in this league for people like Sterling.
When people who identify with the left, politically, were concerned with the rhetoric of President Trump during his campaign, LeBron publicly supported his adversary, Hilary Clinton. During his presidency, James has gone as far as to call the current President of the United States ”a bum.”
But here’s the ultimate kicker…On January 15th 2018, MLK Jr.’s birthday. LeBron had this posted on his Twitter:
“Injustice anywhere is a threat to justice everywhere – Our lives begin to end the day we become silent about things that matter.”
People instantly pointed to the aforementioned tweet, in rebuttal to James’ disparaging comments about Morey. There’s credibility to their rebuttal. If injustice anywhere is a threat to justice everywhere, then shouldn’t the Chinese government be considered a threat? Shouldn’t we speak against a regime that has committed atrocities to its own people?
Apparently, not when money is involved.
Before I dig into this, I don’t want to come off as the bitter, “It’s only because of the money,” type of person. But, money in this situation is a valid arguing point:
The dynamic duo of sports apparel started in 2003, when LeBron entered the NBA. Now Nike “LeBron” shoes are amongst the best-selling shoes in the world (if not the best). Nike is a global leader in the business world. With a market cap of over $148 billion, and 2019 fiscal year revenue of around $39.12 billion, the “shoe company” started by Phil Knight is legit. But what is also legit is the company’s outsourcing of manufacturing (a common business practice), and sources of revenue:
According to Nike’s most recent annual report, Greater China (which normally includes China and areas such as Hong Kong and Macau) accounted for approximately $6.2 billion dollars in revenue. To put this into perspective, Nike’s sales in Europe, Africa, & the Middle East (EMEA), two whole continents and a transcontinental region, combined for $9.8 billion dollars, or roughly 25% of Nike’s revenue. Greater China accounted for almost 16% of Nike’s revenue. The Greater China market also experienced the greatest revenue growth from 2018 to 2019, at 21%. As a matter of fact, at 21%, Greater China experienced more revenue growth from 2018 to 2019 than the North American, EMEA, Asia-Pacific, and Latin American markets combined (15% versus 21%). As it relates to manufacturing, there is a strong Chinese presence. For Nike’s 2019 fiscal year, China accounted for 27% of all of the company’s apparel manufacturing. Vietnam and Thailand combined accounted for 32%, rounding out Nike’s top Asian manufacturers. Thus, it is more than fair to say that China is a core market/business segment for Nike.
If the Chinese government is willing to “ban” the NBA via removing television access to people, and voiding contracts with different NBA affiliates, then you can bet your money that they are capable of shutting down factories, and banning the athleticwear for consumer use. If Nike’s money is affected, athletes who are sponsored by the company will be affected. Hence, the implied indifference/promotion of China by LeBron James.
To be fair to James, he isn’t the only athlete in this predicament. Some NBA players have shoe deals with Chinese-based companies like Anta and Li-Ning: Klay Thompson, Rajon Rondo, Gordon Hayward, CJ McCollum, and others. Have you heard anything from them. Of course not. But, the reasons why they haven’t been singled out on social media are:
A) They haven’t been critical of Daryl Morey
B) They do not have a historically large body of speaking out on social issues
LeBron’s sudden backtracking from the issues in China raises an important question to fans:
Are NBA players who speak out on social issues truly genuine in the comments?
Let’s go back to LeBron’s comments on MLK’s birthday. If injustice anywhere is a threat to justice everywhere, then China is a threat to justice. By LeBron’s decision to be relatively silent about the way China’s government operates, the lives of those willing to oppose the oppressive regime are affected, and the lives of those seeking change and making a stand are lost. NBA players are now at an important crossroad in history. Do they truly believe in human rights, and support social justice of all forms, or do they associate themselves with the issues and support the financial spoils that may come by way of unjust institutions?
At the end of the day, it’s impressive how Daryl Morey, a whiz kid from Baraboo, Wisconsin managed to: expose arguably the greatest role model of the modern era as possibly being “in it for the money,” possibly exposing the NBA as weak, and do what no American politician has been able to do in recent memory — strike a chord in the heart of the Chinese bureaucracy.