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The NBA and China: Revenue or Freedom of Expression?


          One of the major topics of international news in the past few months has been the protests in Hong Kong between pro-democracy citizens and the Chinese government. It all started with the proposal of the Fugitive Offenders amendment bill by the Hong Kong government. If the bill were to be enacted, it would allow for, “criminal suspects (in Hong Kong) to be extradited to mainland China under certain circumstances.” (“The Hong Kong…”). The proposal set off a chain of protests by democracy-seeking citizens that started in late March and have continued to this day.
Photo of a pro-democracy protestor in China waving the American Flag.
          Though it seems that most Americans are openly siding with those protesting, there is not much our government or people can do to aide them other than express our support for them. This must have been what was running through the mind of the Houston Rockets General Manager (GM) Daryl Morey. On Friday, October 4th, Morey shared an image via twitter that read, “Fight for Freedom. Stand for Hong Kong.” The tweet ignited backlash in China, a major source of revenue for the NBA. Very shortly after, the tweet was taken down and just two days later the NBA spokesman Michael Bass issued a statement saying Morey’s views “have deeply offended many of our friends and fans in China, which is regrettable,” followed by an apology from Morey himself (Pramuk).
          As of today, through broadcast deals, merchandise, sponsorship, and ticketing, the NBA is a $5 billion business in China. Last season, roughly 800 million Chinese basketball fans tuned in to watch the NBA over the course of the season, and in the sixth game of the Finals, China had 21 million online viewers while the U.S. had only 18.3 million. In terms of merchandise, the largest NBA retail store outside of North America is in Beijing and more are (potentially were) in the works to be built throughout the country. On top of all of this, what is arguably the biggest contributor to brand awareness for the NBA in China has been the games played there. Since 1979, 17 NBA teams have played 28 games in China, with the most recent games being this week with the L.A. Lakers playing the Brooklyn Nets. However, all of these assets the NBA holds in China are in jeopardy or have already been lost, at least for the time being. The two major Chinese programming networks are both “investigating” their existing arrangements; China’s largest online travel agent has announced it will stop selling NBA tickets and tour packages; and all 11 of NBA China’s official partners, all being Chinese businesses, have said they will cut ties with the NBA (Barrett). This has brought about some stressful situations for many companies that gather a solid portion of their revenue from China. For example, Nike gathered $6.2 billion of revenue in China during the 2019 fiscal year, adding up to almost a fifth of Nike’s overall revenue (Garber). These numbers could take a serious hit if China were to follow through with censoring the NBA as much as it seems like they are planning on.

Circle graph showing the percentages of where Nike gathered their total revenue in the fiscal year of 2019.
       
          Clearly, a lot of money runs through the relationship between China and the NBA and this whole debacle has caught the attention of and angered many throughout the country, including a number of Senators. Senators from Minority Leader Chuck Schumer, D-N.Y., to Marco Rubio, R-Fla., have spoken out on the situation. “No one should implement a gag rule on Americans speaking out for freedom,” Schumer said in a tweet on Monday. “I stand with the people of Hong Kong in their pursuit of democratic rights. I stand with Americans who want to voice their support for the people of Hong Kong. Unacceptable.” Marco Rubio tweeted something very similar, claiming that the league is throwing GM Morey “under the bus to please the Communist Chinese Govt.” Other senators, including Republicans Ben Sasse of Nebraska, Rick Scott of Florida, Ted Cruz of Texas, and Josh Hawley of Missouri, and Democrats Brian Schatz of Hawaii and Ron Wyden of Oregon, as well as Democratic presidential candidates Andrew Yang, Julian Castro, and Sen. Elizabeth Warren of Massachusetts, voiced similar opinions on the issue, criticizing the NBA for their actions and words (Pramuk). Evidently, both political parties are poised to make the league’s operations in China a major issue, but what is unique to this issue is that both parties seem to be agreeing on it.
The situation in China as a whole, not just in terms of the NBA, has clearly been on the minds of our Congressmen and Congresswomen lately. In fact, the House of Representatives approved the Hong Kong Human Rights and Democracy Act just yesterday, Tuesday, October 15th. The bill is seen as an “uncontroversial measure because of its broad bipartisan support…” House Speaker Nancy Pelosi said, “Democrats and Republicans in the House and in the Senate stand united with the people of Hong Kong… If America does not speak out for human rights in China because of commercial interest, then we lose all moral authority to speak out for human rights anyplace in the world.” (Byrd).
Considering one of the constant themes in our class is the growing partisanship in our Congress, and really both political parties as a whole, I understand how rare it is to find a situation where both parties can come together and pass a bill with this much ease. I find this occurrence even more surprising considering the recent events with the Democratic party formally advancing on the impeachment process of President Trump. All things considered, I am very happy to see both political parties cooperating, and I hope China discontinues the censoring of the NBA any further. It would be very unfortunate if all of those people who enjoy basketball and the NBA so much were no longer able to watch the game they have come to love.



Work Cited

Barrett, Eamon. “Broadcasting Rights, Ticket Sales, Sponsorships: NBA's Hong Kong Crisis
Risks Its Massive China Business.” Fortune, Fortune, 10 Oct. 2019,
fortune.com/2019/10/10/nba-china-business-hong-kong/.
Byrd, Haley. “House Approves Bills Supporting pro-Democracy Activists in Hong Kong.” CNN,
Cable News Network, 15 Oct. 2019, www.cnn.com/2019/10/15/politics/hong-kong-house-vote/index.html.
Desk, Web. “Hong Kong Protesters Wave American Flag, Sing National Anthem.” The Week,
The Week, 13 Aug. 2019, www.theweek.in/news/world/2019/08/13/hong-kong-protesters-wave-american-flag-sing-national-anthem.html.
Garber, Jonathan. “Nike's Billion-Dollar Reason for Keeping Quiet on NBA's China Spat.” Fox
Business, Fox Business, 16 Oct. 2019, www.foxbusiness.com/sports/nike-hong-kong-
protests-lebron-james.
“The Hong Kong Protests Explained in 100 and 500 Words.” BBC News, BBC, 14 Oct. 2019,
www.bbc.com/news/world-asia-china-49317695.
Nike Form 10-K 2019. Nike, 2019, Nike Form 10-K 2019,
s1.q4cdn.com/806093406/files/doc_financials/2019/annual/nike-2019-form-10K.pdf.
Pramuk, Jacob. “Senators Pile on the NBA for Yielding to China over Rockets GM Daryl
Morey's pro-Hong Kong Tweet.” CNBC, CNBC, 8 Oct. 2019,
www.cnbc.com/2019/10/07/senators-slam-nba-for-yielding-to-china-over-morey-hong-
kong-tweet.html.


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