Why the NBA Is Facing a Difficult Choice in China | WSJ

– [Narrator] One tweet is putting at risk the NBA’s multi-billion-dollar
opportunity in China, while upsetting basketball
fans at home and abroad. It was sparked when Houston
Rockets general manager Daryl Morey tweeted his support
for Hong Kong protesters. (crowd chanting) The NBA stands out from
other U.S. companies in that it didn’t kowtow
to China’s pressure, whereas other companies have. – They’ll say, “Sorry,” they’ll express regret at what’s happened. The idea is for them to get their relationships with the Chinese. What’s been interesting with the NBA is this backlash from American consumers has made that much more
difficult for them. – [Narrator] This dilemma
is heightened even more as China could overtake
the U.S. as the world’s largest retail market
as soon as this year. So can U.S. brands reconcile its values and Chinese money?
(camera clicking) The Houston Rockets are one of the most popular NBA teams in China. Chinese basketball legend Yao Ming spent his entire NBA career in Houston. – A lot of American companies have made a really big deal out of
China in the past few years. It’s that sort of premier growth market, it’s where they see a
lot of their expansion in the coming years. – [Narrator] Today, China has 300 million basketball players, nearly as many people
as there are in the U.S. In July, Chinese tech giant Tencent, which is the official
broadcaster of NBA games, paid at least $1.5 billion to extend its streaming deal with the league. The team tried to distance
themselves from Morey, who said he didn’t mean to offend anyone, but the damage was done. Billions of dollars are now at stake. Chinese companies, sponsors, and the Chinese Basketball Association suspended ties with the Rockets. The national TV broadcaster
decided to not air two upcoming NBA games and
said it would reconsider its partnership with the league. – Tencent reported that
490 million Chinese people had watched an NBA
basketball game last year. That’s a huge deal. – [Narrator] The NBA’s initial response called Morey’s tweet regrettable, but that drew swift criticism
from U.S. politicians on both sides of the aisle. (dramatic music) – The usual way that U.S.
companies navigate through, and this is true of companies
outside the U.S. as well, is to give in, effectively. They’ll apologize or back
down in whatever way they can without breaking laws
in their home country. – [Narrator] In June, Nike
withdrew a shoe collection in China after its
codesigner brand supported the Hong Kong protesters’ demand to kill an extradition bill that
sparked the protests. The luxury retailer Tiffany
apologized for a tweet that Chinese netizens
saw as pro-Hong Kong. Covering the right eye has become a symbol of police brutality after a woman was shot
in the eye by police. The NBA took a different stance. – We are not apologizing for Daryl exercising his
freedom of expression. – What they’re facing is the difficulty between their U.S. base of consumers, who don’t really want them to apologize for expressing an opinion on Hong Kong, against their new Chinese consumers. They’ve faced a clash
between the two groups. – [Narrator] The NBA is discovering that it’s impossible to have it both ways. The league’s strong brand in
the U.S. could be tarnished if its executives are seen
to be in Beijing’s pocket. – I think it’s gonna be
completely impossible to avoid these scandals completely. Essentially, it’s balancing the freedom of speech of your employees and the people associated
with your company against what Beijing wants in your fastest-growing growth market. (shoes squeaking)
(people chattering)

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