NBA's China dilemma: $4B at risk as Chinese TV cancels game broadcasts

The NBA’s multibillion-dollar business relationship with China faces unprecedented pressure this week after a tweet by Houston Rockets General Manager Daryl Morey kicked off an international debate.

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State-owned Chinese broadcaster CCTV and digital platform Tencent said Tuesday they have suspended planned broadcasts of NBA preseason games over Morey’s now-deleted tweet, which expressed support for pro-democracy protesters in Hong Kong. The tweet drew a public rebuke from Rockets owner Tilman Fertitta and an apologetic initial statement from the NBA, which, in turn, rankled several U.S. politicians who felt the league had sided with financial interests over human rights.

The backlash placed strain on one of the NBA’s most lucrative corporate partnerships – the five-year deal with Tencent to stream NBA games in China said to be worth $1.5 billion. Several other sponsors, including sportswear brand Li-Ning, smartphone maker Vivo, the Shanghai Pudong Development Bank and the Chinese Basketball Association all suspended their work with the Rockets or the NBA over the tweet.

“I have always appreciated the significant support our Chinese fans and sponsors have provided and I would hope that those who are upset will know that offending or misunderstanding them was not my intention,” Morey wrote in a statement on Twitter. “My tweets are my own and in no way represent the Rockets or the NBA.”

The NBA has spent the last two decades cultivating a devoted fan base in China. The league’s business in the country is worth more than $4 billion as of 2018, or $133 million to each NBA franchise, according to Forbes.

But the potential financial impact isn’t limited to the Rockets. The NBA 2K League, the league’s esports venture and a major investment, recently announced plans to partner with Gen.G to place a franchise in Shanghai – the first time the NBA has placed a team outside North America.

It’s unclear if those plans are in jeopardy given current tensions. Representatives for the 2K League and Gen.G did not immediately respond to a request for comment.

The debate developed as top NBA officials tour Asia as part of a preseason promotional slate. NBA Commissioner Adam Silver is set to speak at a press conference in Shanghai on Thursday. The Brooklyn Nets and the Los Angeles Lakers are scheduled to play preseason games in China on Thursday and Saturday.

Facing mounting pressure, the NBA acknowledged in a statement last Sunday that Morey’s tweet had “offended so many of our friends and fans in China, which is regrettable.”

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“While Daryl has made it clear that his tweet does not represent the Rockets or the NBA, the values of the league support individuals’ educating themselves and sharing their views on matters important to them. We have great respect for the history and culture of China and hope that sports and the NBA can be used as a unifying force to bridge cultural divides and bring people together,” NBA Chief Communications Offer Mike Bass said.

Brooklyn Nets owner Joseph Tsai, who co-founded Chinese e-commerce giant Alibaba, said that Morey’s tweet had touched a “third-rail issue” in China and was “so damaging to the relationship with our fans in China.”

Several politicians, including Sen. Ted Cruz, R-Texas, and Sen. Chuck Schumer, D-N.Y., ripped the NBA for a response they deemed had failed to support Morey’s right to free speech and the pursuit of democratic values in Hong Kong.

Silver attempted to clarify the league's position in a statement early Tuesday, acknowledging that the league's initial response "left people angered, confused or unclear on who we are or what the NBA stands for."

"It is inevitable that people around the world -- including America and China -- will have different viewpoints over different issues. It is not the role of the NBA to adjudicate those differences," Silver said. "However, 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. We simply could not operate that way."

The debate inflamed U.S.-China tensions amid a lengthy trade war that sparked retaliatory tariffs between the two nations. Top diplomats are set to meet in Washington, D.C. this week to discuss a potential resolution.

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A White House spokesperson did not immediately respond to a request for comment on Morey’s tweet and the NBA’s handling of the situation.