The NBA is Caught Between a Rock and a Hard Place in China
Despite being an MIT grad, Daryl Morey pulled off one of the stupidest stunts you’ll ever hear tale of this week.
Who’s Daryl Morey?
He is the current general manager of the Houston Rockets, which due to the fact that Houston has one of the largest ethnically Chinese populations of any city in America and the fact that the Chinese basketball GOAT Yao Ming spent his entire career with the team, is by far (like it’s not even close) the most popular NBA franchise in China.
Or at least it was.
That all changed when Morey, for whatever inexplicable reason, tweeted out his support for the Hong Kong freedom movement. Is that even a thing? I thought the protesters just wanted to block passage of an extradition law that they didn’t like. But now, apparently, it has become so much more. We’re not talking about just umbrellas here any more.
Especially for the NBA.
According to estimates from Yahoo! Sports, the NBA could be facing a loss of almost $1 billion per year.
Last month, the NBA released an updated cap projection of $116 million for the 2020-21 season. That projection is nearly $7 million higher than the figure of just over $109 million for the current season.
A drop of 10 to 15 percent would be somewhere between $11.6 million and $17.4 million off the current projection. A drop in the cap would also impact the starting figures for maximum salary contracts, which range from 25 to 30 to 35 percent of the cap. It would also impact various exceptions and the rookie scale contracts, which rise or fall by the same percentage as the cap does.
Multiply the maximum potential drop here ($17.4mm) by the 30 teams in the league and we’re talking about a $522 million hit to the players’ collective salaries. Because the players union has bargained the right to half the revenue that the NBA gets, that means that Morey’s gaffe is potentially a $1.044 billion mistake. EVERY SINGLE YEAR. And that number doesn’t even include the massive growth that the NBA was set to see in China over the next five years thanks to a whole raft of new partnerships with internet behemoth Tencent, the state media CCTV, footwear brand Li Ning, and countless others.
All that could be out the window thanks to the tweet of one single man who has never even worked for the league office. He’s just the personnel guy for 1 of the NBA’s 30 franchises. Rumor is Morey doesn’t even want to work there anymore. There’s new management in H-Town and his alternative philosophies have yet to yield a ring. Not even a Finals appearance. Maybe it’s time Morey left Texas regardless of his politicized ramblings.
No matter what your politics are on this issue, we all have to agree that that’s one hell of a business blunder.
Sports is meant to be a unifier, not a divider. Certainly, it’s a shame that we’ve come to this point in our 24/7 social media charged global world that we are so polarized that a simple retweet of one image could damage a brand, a game, an institution so damn much.
But it has.
What comes next is left up to the media and the fans. If they continue to push buttons on what is clearly a third-rail issue for China, we really might have a whole generation of Chinese kids reverting back to ping pong.
The best course of action, as it always is in basketball, is to heed the words of the overall GOAT himself, Michael Jeffrey Jordan, who famously once replied when asked why he didn’t like to take public stances on social issues, “Republicans wear sneakers, too.”
One can only wonder why Morey wasn’t thinking that exact same way when he tweeted last week.
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Mixing business with politics is the latest trend this year
Yeah. No one listens to Milton Friedman anymore. He who said “The business of business is business.”
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Agree. I enjoy being with people who talk about personal experience and subjects they profoundly understand. I get bored by people who dish out opinions they can’t really afford given the personal involvement.
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Morey in this case couldn’t afford his tweet. It’s like what your grandmother always said, “If you don’t have anything nice to say, don’t say anything at all.”
He had nothing to gain and everything to lose by making that tweet. It’s a game theorist’s nightmare.
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It would appear that get woke go broke appears to both the pro and anti-freedom sides of the aisle.
Is that what the kids say these days? “Get Woke, Go Broke”?
Yup... look up the debacle of Gillette's advertising going all feminist and man hating. They took quite a big write down on that.
I'm not familiar with that one. Is it recent?
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Meh. It was a tweet from his personal account.
Kowtowing to ChinaGov is going to end up backfiring on the other 85% of their revenue streams.
Hence the rock and the hard place. The best action would have been just not to do it. It’s kind of like when your wife asks you, “Have I lost weight?” I mean you can express your personal opinion, but really... you know what you need to say.