NBA-China Controversy

NBA/China Notes: Shanghai Game, Irving, More

October 10th, 2019 at 5:28pm CST by Luke Adams

Although the Lakers/Nets exhibition game in Shanghai took place as planned this morning, it was hardly a typical preseason affair. Scheduled pregame and postgame press conferences for commissioner Adam Silver and players on both rosters were cancelled at the behest of the Chinese government, sources tell Dave McMenamin of ESPN.

As McMenamin writes, China also had a hand in cancelling two NBA Cares events involving Lakers and Nets players earlier this week as tension between the league and its top international market continues to simmer.

Still, while the Chinese government has been on the attack over the last several days as it seeks an apology from the NBA over Daryl Morey‘s tweet supporting Hong Kong protestors, Keith Bradsher and Javier C. Hernandez of The New York Times report that the government attempted on Thursday to tamp down on public anger toward the league.

According to the Times duo, the Chinese government seems to be reevaluating its all-out campaign against the NBA due to concerns in Beijing that the situation is hurting China’s image and interests globally. Editors at state-run news outlets have now been told to avoid fanning the flames on the NBA controversy “for fear that it might become overheated,” per Bradsher and Hernandez, who cited three journalists.

As we wait to see how the situation plays out going forward with a second Lakers/Nets exhibition schedule for Saturday in Shenzhen, here are a few more items of interest:

During a press conference following the Rockets/Raptors exhibition game in Tokyo today, a Rockets official stopped Russell Westbrook and James Harden from answering a question related to the China controversy, insisting that reporters only ask questions about basketball. Per an ESPN report, the NBA issued a statement indicating it doesn’t condone that approach. “A team representative inappropriately interjected to prevent CNN’s Christina Macfarlane from receiving an answer to her question,” the league said. “We’ve apologized to Ms. Macfarlane as this was inconsistent with how the NBA conducts media events.”
NBA player agents are advising their clients to avoid addressing the China situation if they can, writes Jabari Young of CNBC. “What I told my guys is, ‘Don’t even talk about it,'” one agent told Young. “I think it’s a fine line, and when you’re walking that fine line, it’s best to not even play around with it.”
The NBA’s chilly relationship with China is apparently impacting another basketball league — according to an announcement on their website, the BIG3 is postponing a visit to China that was scheduled for the month of November. Rashard Lewis, Mike Bibby, Glen Davis, and Cuttino Mobley were among the former NBA players expected to participate.
While the game itself between the Lakers and Nets today was practically an afterthought, it’s worth noting that Kyrie Irving was knocked out of the game just one minute into the first quarter after he took a shot to the face. According to Brian Lewis of The New York Post (Twitter link), Irving – who was already recovering from a facial fracture – was diagnosed with a facial contusion. The team doesn’t seem worried that it’s serious, Lewis adds.

How NBA/China Controversy Could Impact Salary Cap

October 10th, 2019 at 10:59am CST by Luke Adams

As we briefly discussed in our Wednesday night roundup on the latest developments in the NBA/China standoff, salary cap experts for several NBA teams are preparing for a scenario in which lost revenue from Chinese partners affects the growth of the league’s salary cap, according to Keith Smith.

Smith explores the subject in a little more depth in a full story at Yahoo Sports, but makes it clear in a pair of follow-up tweets that those clubs are just doing due diligence now to avoid being caught off guard later. According to Smith, no one is expecting the league’s 2020/21 salary cap projection to dip by as much as the 10-15% figure he cited earlier — teams just want to be prepared for a worst-case scenario.

While the NBA’s salary cap going forward may not be drastically affected by the controversy in China, any unexpected lost revenue can have an impact on the cap. As Jeff Siegel of Early Bird Rights explains in a Twitter thread, the league’s current cap figures and projections for future seasons are based on anticipated basketball-related income (BRI).

This year’s $109.14MM cap – and next year’s $116MM projection – didn’t take into account that the league’s revenue streams in China might take a hit, so if this saga continues, projections for future seasons would have to be adjusted downward to ensure the BRI split between players and team owners adheres to the requirements laid out in the league’s Collective Bargaining Agreement.

In an in-depth look at the NBA’s financial stakes in China, Jeff Zillgitt and Mark Medina of USA Today suggest that a “conservative” estimate would put the league’s annual revenue from China at $500MM.

Cap expert Albert Nahmad (Twitter link) projects that a $100MM drop in expected revenue for the NBA this season would lower the cap projection for ’20/21 by about $1.7MM. Each additional $100MM drop in revenue up to the $500MM mark would likely reduce the projection by another $1.5MM or so, Nahmad estimates.

If the cap ultimately comes in lower than $116MM, it will have a real impact on where team salaries land in proximity to the cap threshold and to the luxury-tax line. It would also reduce projected maximum salaries, rookie scale amounts, and several other salary figures that are directly linked to the percentage the cap increases (or decreases).

“I haven’t really been in this spot before,” one team’s cap expert told Smith. “The cap has only gone up in recent years. It’s really different. I have to wonder if the league would be pressed to consider some measures to not drop the cap down so far from where we are today at $109MM. Otherwise, a bunch of us are over the tax. It’d be nice to know now, because that changes how we approach trades and everything else throughout the season.”

Nets, Lakers Still Expected To Play In China

October 9th, 2019 at 7:53pm CST by Arthur Hill

The Nets–Lakers game, scheduled for 7:30 Eastern Time tomorrow morning in Shanghai, appears likely to be played, sources tell Shams Charania of The Athletic (Twitter link). There have been concerns that the game and another one scheduled for Saturday in Shenzhen might be canceled due to the ongoing dispute between the league and the Chinese government.

Media sessions scheduled for today to promote the game were called off, along with at least two other NBA-related events, and outdoor advertisements for the contest were taken down, relays Tim Reynolds of The Associated Press. However, Commissioner Adam Silver told representatives of both teams that he believes the games won’t be affected.

Tensions have been high since Rockets general manager Daryl Morey posted a tweet last Friday supporting protesters in Hong Kong. Morey quickly removed the tweet and team owner Tilman Fertitta emphasized that the team doesn’t take political positions, but it has done little to quell the controversy.

The dispute reached Congress today with a bi-partisan group sending a letter to Silver urging him to have the “courage and integrity” to stand up to Chinese leaders. The lawmakers are calling on the NBA to suspend all activities in the nation until the government agrees to reverse the actions it has taken against the Rockets. Throughout the country, Rockets merchandise has been taken off the shelves and murals of the team, even those featuring Yao Ming, have been covered with paint.

“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 letter read. The league offered no comment and did not say if Silver has seen the letter.

There’s more on the NBA’s standoff with China:

The dispute has spread to the United States, Reynolds notes, as two fans were removed from the Sixers‘ game against Guangzhou Tuesday night for displaying signs and chanting support for Hong Kong. Wells Fargo Center officials issued a statement today explaining the ejections. “During the second quarter of last night’s 76ers game, Wells Fargo Center security responded to a situation that was disrupting the live event experience for our guests,” the statement read. “After three separate warnings, the two individuals were escorted out of the arena without incident. The security team employed respectful and standard operating procedures.” Hong Kong supporters were also visible at tonight’s Wizards game in Washington, D.C., tweets Candace Buckner of The Washington Post.
The international tension has been a distraction that the Nets don’t need as they prepare for the season, states Stefan Bondy of The New York Daily News. Players are staying in their hotel and are being very guarded in their public statements. “It was unfortunate that the events were cancelled (Tuesday) but we’re not experts in that field,” DeAndre Jordan said on ESPN’s The Jump. “The field that we are experts in is basketball. We wanted to come here to play basketball and see all our fans in China.”
Salary cap experts from five teams are preparing for a sharply reduced cap in 2020/21 because of the expected loss of revenue from China, tweets Keith Smith of Yahoo Sports. Some are running scenarios that are 10-15% lower than the current $116MM projection. While he stresses that it’s just preparation, Smith adds that a source told him, “It’s like the spike, but opposite. After all the money everyone spent last summer, this would have a major impact on all of us.” (Twitter link)

Latest On NBA/China Controversy

October 9th, 2019 at 8:29am CST by Luke Adams

As first reported by Jeff Zillgitt of USA Today, there’s a growing concern that the exhibition games between the Lakers and Nets scheduled to take place in China on Thursday and Saturday this week will be cancelled as a result of tension between the NBA and the Chinese government.

As we’ve outlined in a series of stories, that tension stems from a tweet supporting Hong Kong protestors which was published – and quickly deleted – by Rockets general manager Daryl Morey. Since then, the NBA and commissioner Adam Silver have backed Morey’s freedom of expression, which has upset the league Chinese partners. The NBA has lost sponsors in China, while streaming company Tencent has suspended its broadcasts of all Rockets games and Chinese state-run TV network CCTV has said it won’t show this week’s Lakers/Nets exhibitions.

Of course, as noted above, there are an increasing number of signs that those games won’t actually take place. After an NBA Cares event with the Nets in Shanghai on Tuesday was cancelled by the Chinese government, a similar event with the Lakers was nixed on Wednesday, per an ESPN report. Additionally, ESPN’s Rachel Nichols (video link) observes that banners advertising the Lakers/Nets games are being taken down in Shanghai.

Lakers and Nets players were scheduled to speak to reporters early this morning , but an NBA spokesperson announced that the media availability would be postponed, given the fluid nature of the situation, per Dave McMenamin of ESPN (Twitter link).

Here are a few more items on the NBA/China controversy:

After issuing an open letter earlier this week that was met with some criticism stateside for echoing language used by the Chinese government, Nets owner Joe Tsai briefly spoke to The New York Post and Wall Street Journal on Tuesday. Tsai, who said he’s in the “eye of the storm” as he tries to help the NBA and China resolve the issue, noted that his role is to help both sides understand the other’s perspective. “What I’m simply pointing out is how mainland China feels about this issue,” Tsai said of his open letter. “It’s definitely a third-rail issue for Chinese people on the mainland.”
Spurs head coach Gregg Popovich lauded Adam Silver for his comments on Tuesday in which he supported Daryl Morey‘s right to freedom of expression, per Tim Reynolds of The Associated Press. “It wasn’t easy for him to say,” Popovich said. “He said that in an environment fraught with possible economic peril. But he sided with the principles that we all hold dearly, or most of us did until the last three years. So I’m thrilled with what he said.”
When NBA players arrive in China, they’re generally treated like rock stars, but that hasn’t been the case for the Lakers this week, according to Tania Ganguli and Alice Su of The Los Angeles Times. As the Times duo writes, the Lakers were greeted with little fanfare when they landed in Shanghai, and have seen their plans for the week become “completely disheveled” as a result of the controversy.

Tension Between NBA, China Continues To Grow

October 8th, 2019 at 8:23am CST by Luke Adams

Several days after Rockets general manager Daryl Morey deleted his now-infamous tweet expressing support for protestors in Hong Kong, the NBA and its partners in China don’t appear to be moving any closer to resolving the controversy it created.

Early on Tuesday morning, NBA commissioner Adam Silver followed up on the brief statement issued by the league on Sunday by publishing a new, lengthier statement which sought to clarify the NBA’s stance on the situation. In the statement, which can be read in full right here, Silver offered the following thoughts:

“Over the last three decades, the NBA has developed a great affinity for the people of China. We have seen how basketball can be an important form of people-to-people exchange that deepens ties between the United States and China.

“At the same time, we recognize that our two countries have different political systems and beliefs. And like many global brands, we bring our business to places with different political systems around the world.

“But for those who question our motivation, this is about far more than growing our business.

“Values of equality, respect and freedom of expression have long defined the NBA — and will continue to do so. As an American-based basketball league operating globally, among our greatest contributions are these values of the game.

“… It is inevitable that people around the world — including from America and China — will have different viewpoints over different issues. It is not the role of the NBA to adjudicate those differences.

“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.”

In response to Silver’s latest missive, the Chinese state-run television network CCTV announced it would be suspending its broadcasting agreement for NBA preseason games, writes Arjun Kharpal of CNBC.

As Stephen Wade and Tim Reynolds of The Associated Press explain, the Lakers and Nets are scheduled to play in Shanghai in Thursday and Shenzen on Saturday, and while those games are expected to proceed as planned, they won’t be aired by CCTV. Silver admitted the league wasn’t expecting the network to take those measures, per The Associated Press.

“But if those are the consequences of us adhering to our values, I still feel it’s very, very important to adhere to those values,” the NBA commissioner said.

It’s not clear if the “temporary” broadcast suspension will last into the regular season, but CCTV issued a statement in Chinese (translated by MSNBC) making it clear that it wasn’t happy with the stance taken by Silver and the NBA:

“We are strongly dissatisfied and we oppose Silver’s claim to support Morey’s right of free expression. We believe that any speech that challenges national sovereignty and social stability is not within the scope of freedom of speech.”

According to comments relayed by Kevin O’Connor of The Ringer (Twitter link), Silver still intends to attend Thursday’s exhibition contest in Shanghai and hopes to meet with the appropriate officials there to find common ground with the league’s partners in China. However, he added that he’s a “realist” and recognizes that the issue may not be resolved quickly.

Silver also said that he plans to meet this week with Yao Ming, the former Rockets center who is now the chairman of the Chinese Basketball Association (Twitter link via Rachel Nichols of ESPN).

“I’m hoping together Yao and I can find an accommodation, but he is extremely hot at the moment and I understand it,” Silver said.

While Silver’s latest press release asserted that the NBA’s stance is about more than “growing [its] business,” the commissioner acknowledged to Joel Fitzpatrick of Kyodo News on Monday that the controversy has already affected the league’s bottom line. According to The Associated Press’ report, the NBA’s agreement with Chinese streaming partner Tencent, which has said it will no longer show Rockets games, is worth $1.5 billion over the next five years.

However, Silver insisted that that those business issues wouldn’t affect the league’s support of Morey and others exercising their freedom of expression.

“There is no doubt, the economic impact is already clear,” he told Fitzpatrick. “There have already been fairly dramatic consequences from that tweet, and I have read some of the media suggesting that we are not supporting Daryl Morey, but in fact we have. I think as a values-based organization that I want to make it clear…that Daryl Morey is supported in terms of his ability to exercise his freedom of expression.”

Latest On NBA’s Morey/China Controversy

October 7th, 2019 at 9:41am CST by Luke Adams

As we relayed on Sunday, the Chinese Basketball Association and other business in China have suspended their relations with the Rockets in the wake of a Daryl Morey tweet in which the Houston general manager expressed support for protestors in Hong Kong. Although Morey deleted the tweet and the Rockets and the NBA made efforts to walk it back, the league remains in a tenuous spot, writes Jeff Zillgitt of USA Today.

The NBA issued a statement on Sunday, calling it “regrettable” that Morey’s tweet had offended “many of our friends and fans in China” and noting that Morey’s tweet didn’t represent the Rockets or the NBA. However, the league doesn’t intend to fine, suspend, or otherwise punish the Houston GM, sources tell Zillgitt.

Interestingly, the NBA’s statement also looked a little different in Chinese than it did in English, according to Yanan Wang of The Associated Press. In Chinese, the league referred to Morey’s tweet as “inappropriate,” a word that didn’t show up in the English statement. League spokesperson Mike Bass said today that the discrepancy wasn’t intentional (Twitter link via Zillgitt).

The NBA has to walk a fine line in this controversy, since the league typically hasn’t discouraged its coaches, players, and executives from speaking up about political and social justice causes that matter to them. In this case though, it’s clear that the NBA’s business interests in China’s massive market are influencing the league’s decision to distance itself from Morey’s initial comments and to placate its Chinese partners.

Here’s more on the controversy:

John Gonzalez of The Ringer cited league sources who claim that the Rockets have debated Morey’s employment status and whether to replace him. However, several reporters – including Sam Amick of USA Today, Jerome Solomon of The Houston Chronicle, and Jonathan Feigen of The Houston Chronicle (all Twitter links) – have heard from sources that’s not the case and that Morey’s job isn’t in jeopardy.
Morey hasn’t apologized for his initial tweet, but issued a follow-up statement in which he stressed that he didn’t intend any offense and expressed his appreciation for “our Chinese fans and sponsors.”
Rockets star James Harden, who has participated in promotional tours in China in the past, was among those in damage-control mode this weekend, per an ESPN report. “We apologize. You know, we love China. We love playing there,” Harden said. “For both of us individually, we go there once or twice a year. They show us the most important love.”
New Nets owner Joe Tsai issued an open letter to fans (via Facebook) providing more context on the situation in Hong Kong and China and criticizing Morey for not being “as well informed as he should have been.” Tsai’s framing of the Hong Kong protests as a “separatist movement,” rather than a fight for civil rights and democracy, echoes language used by the Chinese government. It’s worth noting that no NBA owner is more invested in China than Tsai, the co-founder of Alibaba Group.
The Chinese Basketball Association has cancelled the G League exhibition games between the Rockets‘ and Mavericks‘ affiliates scheduled to take place in the country later this month, sources tell Shams Charania of The Athletic (Twitter link).
For more analysis on the saga, be sure to check out pieces from Chris Mannix of SI.com, Daniel Victor of The New York Times, and Adam Zagoria of Forbes.

China Suspends Ties With Rockets After Daryl Morey Tweet

October 6th, 2019 at 1:03pm CST by Arthur Hill

A tweet by Rockets general manager Daryl Morey has pushed the team into an international incident, explains an ESPN story.

The Chinese Basketball Association announced this morning that it will suspend cooperation with the Rockets after Morey expressed his support for protesters in Hong Kong who are demanding democratic reforms. Morey’s now-deleted tweet read, “Fight for Freedom. Stand with Hong Kong.”

On its Weibo account today, the CBA blasted Morey for “improper remarks regarding Hong Kong” and expressed “strong opposition” to his statement. The controversy comes as the Rockets are in Japan for a pair of games with the Raptors.

China has maintained a close relationship with the Rockets ever since current CBA Chairman Yao Ming was drafted by Houston in 2002. The Rockets wear an alternate jersey that features Chinese lettering, and James Harden conducted a promotional tour of the nation this summer.

China is also an extremely important market for the NBA as it expands its overseas popularity. It has become the nation’s most popular foreign sports league, with China playing host to the World Cup last month.

Among those reacting to Morey’s tweet when it appeared Friday was Rockets owner Tilman Fertitta, who stressed that the franchise should not serve as a platform for political views.

“Listen….@dmorey does NOT speak for the Houston Rockets,” Fertitta tweeted. “Our presence in Tokyo is all about the promotion of the NBA internationally and we are NOT a political organization.”

Fertitta stressed to ESPN that he still has full confidence in Morey as a GM and the incident won’t affect his job security.

“I have the best general manager in the league,” Fertitta said. “Everything is fine with Daryl and me. We got a huge backlash, and I wanted to make clear that the organization has no political position. We’re here to play basketball and not to offend anybody.”