Caixin
Oct 09, 2019 03:12 AM
BUSINESS & TECH

NBA Caught in Crossfire Amid Fury Over Tweet by Rockets GM

CCTV, Tencent suspended airing NBA games after a tweet by the Houston Rockets general manager ignited a firestorm of criticism. Photo: VCG
CCTV, Tencent suspended airing NBA games after a tweet by the Houston Rockets general manager ignited a firestorm of criticism. Photo: VCG

A firestorm set off by a tweet from the Houston Rockets general manager in support of Hong Kong protesters blazed on in China, threatening the multibillion-dollar business ties of the National Basketball Association (NBA) in the country.

China’s state television network CCTV said Tuesday it would suspend airing and streaming preseason NBA games. Internet giant Tencent Holdings Ltd. followed quickly with a similar announcement. Tencent holds a $1.5 billion contract for digital broadcasting rights to the games. Neither CCTV nor Tencent gave a timeframe for the resumption of broadcasting.

A host of Chinese companies and celebrities – including apparel retailers, a bank and even purveyors of coffee and milk – also distanced themselves from the American professional basketball organization by suspending business partnerships or quitting NBA-related activities.

Meanwhile, American commentators and news organizations including the prestigious New York Times and Wall Street Journal blasted the NBA for initially appearing to waver in its support for the free speech rights of Daryl Morey, the general manager of the Houston Rockets.

Morey Friday tweeted an image supporting the protests in Hong Kong. While the post was soon deleted, it ignited a furor in China as many criticized it as a challenge to the nation’s sovereignty. Morey later apologized on Twitter and said his views were not representative of the Rockets or the NBA. The U.S. league said Sunday in a statement that it was “regrettable” that Morey’s tweet offended Chinese fans.

The public fury roiled on, however, after NBA Commissioner Adam Silver tried Monday to defend Morey’s right to free speech.

“I want to make it clear that Daryl Morey is supported in terms of his ability to exercise his freedom of expression,” Silver said in an interview with Kyodo News in Japan.

China is the most important international market for the NBA, with some games attracting more Chinese viewers than in the U.S. and an expansive retail and marketing network with domestic partners. The broadcasting suspension could affect about 800 million viewers in China who watch the games on various screens each season.

According to Tencent, about 490 million viewers watched live NBA games via its online streaming platform during the 2018-2019 season, a three-fold increase from the 2014-2015 season. In July, Tencent paid $1.5 billion for five years of digital broadcasting rights to games between 2020 and 2025. Viewers pay 22 yuan to 60 yuan ($3 to $8.40) a month for different levels of access to Tencent’s live streaming of NBA games. Tencent also offer various NBA-related online games.

A handful of Chinese sponsors cut business ties with the Rockets, including sportswear maker Li Ning Co. and Shanghai Pudong Development Bank Co. Ltd. Pudong Development Bank said it suspended all marketing and promotion activities related to the Rockets.

Major e-commerce platforms including Alibaba Group, JD.com and Suning.com shelved products related to the Rockets. Nike also pulled the Rockets off its website in China.

The NBA has been operating an official retail store on Alibaba’s e-commerce platform since 2012. The pair bolstered cooperation this year by launching a special NBA content section on Alibaba’s Taobao marketplace that could direct shoppers to related products. In 2018, total sales of basketball-related products on Alibaba reached 12.6 billion yuan ($1.8 billion), according to a joint statement by the company and NBA China.

Alibaba said it removed only products related to the Rockets from its retail platforms while other NBA items are not affected. But some retailers operating on its platform may decide to pull a broader range of NBA-related goods, Alibaba said.

The turmoil has also affected the NBA’s marketing partnerships in China. Dairy giant China Mengniu Dairy Co. shelved sales of products with NBA logos on its online store, a person close to the company said.

Luckin Coffee, China’s second-largest coffee chain, said it halted all cooperation and marketing activities related to the NBA. The coffee chain became an official China partner of the U.S. league in June and opened an NBA theme store in Shanghai last month.

Contact reporter Han Wei (weihan@caixin.com)

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