NBA-China rift could hit players where it hurts: Their wallets
When LeBron James criticized Houston Rockets executive Daryl Morey's recent tweet supporting Hong Kong pro-democracy protesters, the Los Angeles Lakers star may have unwittingly drawn attention to another aspect of the controversy: Some players could lose millions in endorsements if relations between the NBA and China deteriorate further.
In his first public comments about the NBA's strained relationship with China, James alluded to the financial stakes involved in that relationship.
"When you're misinformed or you're not educated about something - and I'm just talking about the tweet itself - you never know the ramifications that can happen," James said Monday. "So many people could have been harmed, not only financially, but physically, emotionally [and] spiritually."
Financially, indeed. James himself doesn't have direct financial ties to China, but some of his fellow athletes do:
- Retired Miami Heat guard Dwayne Wade, one of James's closest friends, in 2018 signed a shoe endorsement deal with Chinese apparel company Li-Ning that earns him $12 million a year.
- Portland Trailblazers guard CJ McCollum also has a shoe endorsement deal with Li-Ning, though the dollar amount hasn't been made public.
- Golden State Warriors guard Klay Thompson has a 10-year shoe endorsement deal with Chinese shoe manufacturer Anta worth $9 million a year.
- Boston Celtics forward Gordon Hayward and Rajon Rondo, James's teammate in Los Angeles, also have Anta deals.
Morey's tweet drew criticism from the NBA, Rockets ownership and the Chinese Basketball Association. On Tuesday, James sought to clarify his comments rebuking Morey, tweeting: "I do not believe there was any consideration for the consequences and ramifications of the tweet. I'm not discussing the substance."
Let me clear up the confusion. I do not believe there was any consideration for the consequences and ramifications of the tweet. I’m not discussing the substance. Others can talk About that.
— LeBron James (@KingJames) October 15, 2019
James's comments have drawn fire both in the U.S. and in Hong Kong, where protesters on Tuesday trampled on, and even burned, his jersey. American lawmakers also blasted James, accusing him and the NBA of trying to appease China.
"Clearly [James] is the one who isn't educated on the situation at hand," Republican Senator Rick Scott of Florida tweeted. "It's sad to see him join the chorus kowtowing to Communist China and putting profits over human rights for Hong Kong. I was there two weeks ago. They're fighting for freedom and the autonomy they were promised."
"This kind of garbage is hard to take," Republican Sen. Josh Hawley of Missouri tweeted. "News flash: people are being harmed — shot, beaten, gassed — right now in Hong Kong. By China. By the Communist Party the NBA is so eager to appease."
The NBA and Chinese companies, along with top players, have a lot riding on smoothing over the dispute. For example, the U.S. league has a five-year deal with Tencent, a Chinese media outlet that streams games online, reportedly worth $1.5 billion. NBA China, which organizes the league's events in the country, is worth $4 billion, NBA Deputy Commissioner Mark Tatum told Forbes last year.
"While it is impossible to accurately estimate the NBA's income derived from China, it has been conservatively estimated to be approximately $500 million," said Steven Weisman, a sports law professor at Bentley University in Massachusetts. "These funds, in turn, affect the NBA's salary cap and the funds allocated based on the salary cap to players' contracts."
U.S. companies see growth prospects, also. China is considered the fastest-growing market for Nike, with whom James has a lifetime endorsement deal. In the most recent fiscal year, its revenue from China jumped 21% from the previous year, while overall, sales in China made up 16% of Nike's total revenue.
David Carter, a sports business professor at the University of South California, said NBA players, particularly those with Chinese endorsements, need to be careful about what they say publicly, especially now when tensions are high.
"It's important, from a player standpoint, to calibrate your own message before commenting on others'," he said. "If you're a player who doesn't fully appreciate what's going on, that could have blowback in the form of companies backing away because they don't want to get into a political firestorm."
More broadly at stake for the NBA is the faith and confidence of corporate sponsors and media networks that have signed on to air league games and events — foreign and domestic, Carter said.
Sports marketing experts said the NBA faces a tall task: assuaging Chinese companies, Chinese basketball fans and the Chinese government, without inviting criticism here in the United States.
"Sports are a global game now and your market is a global marketplace for viewers," said Tim Derdenger, a sports marketing expert and professor at Carnegie Mellon University. "That makes it even more challenging for leagues to manage and market and play damage control."
-—The Associated Press contributed to this report.