A simple image consisting of seven words might be the most troublesome tweet in corporate America this year.
Houston Rockets General Manager Daryl Morey caused substantial damage with the NBA’s growing relationship with China after he voiced his support for Hong Kong’s pro-democracy protestors.
The league has spent years and many millions of dollars investing in China, helping to build courts, giving broadcasting rights away for free and bringing its stars over for preseason games.
China makes up at least 10% of the league’s current revenue, according to one analyst, and the country is expected to contribute even more than that over the next decade, perhaps reaching 20% of the league’s revenue by 2030.
Morey’s tweet, which couldn’t be seen in China because the country has banned Twitter, is still reverberating across the two countries. The controversy is also likely being watched closely by other US companies that do business with China and have to balance that country’s laws with US ideals.
Here’s how the NBA’s crisis unfolded.
Friday, Oct. 4: The tweet heard round the world
Morey set off a firestorm in China last Friday when he posted an image on Twitter that read, “Fight for freedom, stand with Hong Kong.” The tweet has since been deleted.
Sunday, Oct. 6: The reaction in China
The Chinese Basketball Association said on Sunday that it would suspend all cooperation with the team. China’s consulate general in Houston also urged the team to “clarify and immediately correct the mistakes.”
When China joined the World Trade Organization in 2001, the United States and its allies hoped that Beijing would adopt an increasingly liberal approach to its economy and financial markets, more closely mirroring its trading partners in the West. Political liberalization, it was assumed, would inevitably follow. It’s not happening.
CCTV 5, the sports channel of China’s top state broadcaster, announced that it would suspend airing Houston Rockets events on television. Last season, more than 600 million people watched NBA games on Chinese television networks.
And Tencent Sports said it would suspend live streaming the games, as well as reporting news about the team. Nearly 500 million people in China watched NBA programming on Tencent platforms during the last season, according to the companies.
Monday, Oct. 7: NBA’s initial response sparks outrage
The NBA said that it recognizes that Morey’s views “have deeply offended many of our friends and fans in China, which is regrettable.”
“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,” NBA said in a statement, adding: “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.”
The response was been criticized by several US politicians — both Democrats and Republicans.
“It’s clear that the NBA is more interested in money than human rights,” said Senator Rick Scott, a Republican from Florida, on Twitter. “The NBA is kowtowing to Beijing to protect their bottom line and disavowing those with the temerity to #standwithHongKong. Shameful!”
Beto O’Rourke, a Democrat from Texas who is running for the party’s presidential nomination in 2020, called the NBA’s response “an embarrassment.”
Morey also responded on Twitter, saying he was speaking on his own behalf and not for the NBA:
Joe Tsai, the executive vice chairman of Chinese tech giant Alibaba and owner of the Brooklyn Nets NBA franchise, sought to defuse the tensions.
In the surest sign yet that the trade war is hurting the American economy, manufacturing activity contracted in September to a 10-year low.
“The NBA has been very progressive in allowing players and other constituents a platform to speak out on issues,” Tsai wrote in a lengthy Facebook post. He then criticized supporters of Hong Kong’s protests, calling them a “separatist movement” in a territory controlled by China.
“Chinese citizens stand united when it comes to the territorial integrity of China and the country’s sovereignty over her homeland. This issue is non-negotiable,” he said.
Tuesday, Oct. 8: The NBA responds again. Backlash grows
In an attempt at damage control, NBA Commissioner Adam Silver issued another statement Tuesday saying that he won’t censor players or team owners over China or other issues, arguing that the league is motivated by much more than money, and freedom of expression must be protected.
“The NBA will not put itself in a position of regulating what players, employees and team owners say or will not say,” Silver said in the statement. “We simply could not operate that way.”
The league’s initial response was criticized by some fans and US politicians for appearing to compromise its principles, and condemned by others in China for offending national sensibilities.
“I do know there are consequences from freedom of speech; we will have to live with those consequences,” Silver said. “For those who question our motivation, this is about far more than growing our business,” he added.
In response, CCTV said it has “decided to immediately halt” broadcasts of the basketball league’s preseason matches in China after it expressed its “strong dissatisfaction” over Silver’s statement on Morey’s tweet. The broadcaster is also reviewing its broader relationship with the NBA.
“We express our strong dissatisfaction and opposition to Silver’s stated support of Morey’s right to free speech. We believe any remarks that challenge national sovereignty and social stability do not belong to the category of free speech,” the network said. “We will also immediately examine all other cooperation and exchanges with the NBA.”
Silver responded to CCTV’s decision, calling it “unfortunate.”
Tencent also said it would suspend live streaming for two NBA preseason games in China.
Wednesday, Oct. 9: Every one of the NBA’s partners in China suspends ties
All 11 of the NBA’s official Chinese partners have suspended ties with the league since Monday, according to a review by CNN Business of company statements and social media posts.
CTrip, China’s biggest online travel website, said that it has “dropped all NBA-related tickets and travel products” from its platform. Mengniu Dairy, one of the country’s top milk producers, vowed to suspend “all commercial cooperation with the NBA.”
Fast-food chain Dicos also said it planned to suspend “all marketing and publicity activities” with the league, while the skin care brand Wzun said it would “terminate all cooperation with the NBA.”
Changhong Electric, a major home appliance group listed as a partner on NBA China’s website, said that it felt “strong indignation to Morey’s indifferent attitude and refusal to apologize,” while Chinese sportswear giant Anta declared that it “firmly opposes and resists all acts that harm the interests of the motherland.”
The other Chinese firms to distance themselves from their official partnerships include: China Mobile subsidiary Migu; food and beverage brand Master Kong; car rental company eHi Car Services; home appliance manufacturer Meiling; and financial firm Xiaoying Technology.
Luckin Coffee, the Shanghai-based beverage chain, said that it would “suspend all cooperation,” while smartphone maker Vivo said it condemned “the false remarks” made by Morey, “as well as NBA’s attitude indicating that it’s indulging such behavior.”
The Los Angeles Lakers and Brooklyn Nets are set to face off in Shanghai on Thursday, followed by a rematch in Shenzhen on Saturday. Some social media users in China have been calling for boycotts of the NBA events. There’s speculation that those games might be called off.
Two NBA developmental games have already been canceled, as well as a fan appreciation night.
According to the Associated Press, Silver told the Nets and Lakers on Wednesday that the league is still expecting them to play as scheduled this week, even while the rift between the league and Chinese officials continued in ways that clearly suggested the two planned games in Shanghai and Shenzhen were anything but guaranteed.
The NBA called off scheduled media sessions Wednesday for both teams.
“Given the fluidity of the situation, today’s media availability has been postponed,” the league said. The sessions were not rescheduled Wednesday, though having them on Thursday — game day in Shanghai — remains possible.
Later Wednesday in Washington, a bipartisan group of lawmakers — including the rare alignment of Republican Sen. Ted Cruz of Texas and Democratic Rep. Alexandria Ocasio-Cortez of New York — sent a letter to Silver saying the NBA should show the “courage and integrity” to stand up to the Chinese government. They asked the NBA to, among other things, suspend activities in China until what they called the selective treatment against the Rockets ends.
“You have more power to take a stand than most of the Chinese government’s targets and should have the courage and integrity to use it,” the lawmakers told Silver. The NBA did not have any immediate comment on the letter, and it was unclear if Silver had even seen the document.
The controversy is happening at the same time that US and China are having trade talks. The US recently put 28 Chinese entities on a blacklist that effectively bars them from importing American technology over the groups’ alleged role in facilitating human rights abuses in China’s Xinjiang region.