SportsPulse: Former NBPA Executive Director Charles Grantham lends his expertise while dissecting the situation between the NBA and China that has dominated the headlines in recent days.
In the late 1980s, when the NBA began making inroads into China, the league sent CCTV NBA games on videotape and told the state-run TV station it could air games at no cost. By 1992, the league had opened an office in Hong Kong, and by 2004, the NBA was playing preseason games in China.
Today, the NBA has billion-dollar deals in China.
And its business relationships are in tumult after Houston Rockets general manager Daryl Morey sent a pro-Hong Kong tweet that offended China and ignited a geopolitical crisis between the league and the communist country. As commissioner Adam Silver has apologized while underlining the league’s stance on free speech, CCTV has pulled the plug on showing the Brooklyn Nets and Los Angeles Lakers preseason games in Shanghai and Shenzhen.
At stake in the standoff: billions of dollars for both sides and a strong four-decade-long relationship that began with a Washington Bullets exhibition game in 1979. It is a relationship that has multiple layers including Chinese-related business partnerships with NBA players in the millions, a friendship with Basketball Hall of Famer and former NBA All-Star Yao Ming, who is the president of the Chinese Basketball Association and is a vital goodwill ambassador for the NBA in Asia, and millions of fans.
“If all of a sudden China decided it was no longer going to broadcast the NBA, clearly that would hurt CCTV and Tencent [an Internet conglomerate offering multiple e-services], but it would hurt the NBA more,” Syracuse University professor John Wolohan, who specializes in sports law and U.S.-China sports relations, told USA TODAY Sports. “If one of these sides is going to lose, it’s going to be the NBA.”
NBA revenue from China — and a conservative estimate puts that at $500 million annually based on deals that are publicly known — is part of basketball-related income which impacts the salary cap and how much money is available to players on an annual basis.
In July, China’s Tencent reached a five-year, $1.5 billion deal to remain the league’s exclusive digital partner in China, and it is the NBA’s largest partnership outside of the U.S. CCTV has a lucrative financial partnership with the NBA televising multiple games live each week, including coverage of the playoffs.
NBA China, a separate business arm of the NBA, was valued at $5 billion by Sports Business Journal last month.
Separate from the NBA’s partnerships in China, players are invested in the country, too. Several of them, including stars LeBron James and Steph Curry, make annual visits to sell apparel products from Nike and Under Armour.
Chinese apparel companies have also signed NBA players to endorsement deals: Klay Thompson and Gordon Hayward with Anta, CJ McCollum with Li-Ning and Lou Williams with Peak. Thompson’s deal with Anta could reach $80 million over 10 years, according to ESPN. Williams has said he earns more from his endorsement deal than he does playing.
This controversy comes against the backdrop of a much larger issue: the trade war between China and the United States and human rights abuses in China.
On Monday, the U.S. blacklisted 28 Chinese entities because they have been “implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the XUAR,” according to the U.S. Department of Commerce.
The NBA is not alone when it comes to China’s heavy-handed negotiating tactics. Gaming company Activision Blizzard banned an e-sports player for a year on Tuesday after he expressed support for Hong Kong, and in August, high-end fashion brand Versace apologized fo