The NBA has a fiduciary duty to step away from China

The NBA has had an eventful preseason and in peak NBA fashion it had nothing to do with the actual game. As a fan of this game, but also a believer in the product of the NBA, I would be remiss if I didn’t have some thoughts about the NBA’s international dispute with the Chinese government.

When Daryl Morey made his now infamous tweet, I’m not sure many expected the incoming avalanche from the Chinese government, (which says more about our lack of understanding of the communist government more than anything).

Hong Kong and China have a “One country, two government” system in which Hong Kong is still part of China, but has an independent economic and political system. This agreement began in 1997 when Britain, who secured the area at the conclusion of the 19th-century Opium Wars, handed the area back to China. As part of the 50-year agreement, Hong Kong governors were replaced with “Chief Executives” who would be elected by a 1,200- member electoral college from a pool of candidates approved by the Chinese government.

From that point, Hong Kong and China have had many disagreements revolving around China trying to run amuck of these terms by imposing their policies on the people of Hong Kong. In 2014, the “Umbrella Movement” protests took place in response to pro-establishments forces of China securing majorities in local councils and the territory’s legislature on the backs of Beijing money. They then began imposing new loyalty tests on candidates running for office. This year, central authorities passed a law that punished people for insulting the national anthem, similar to a law passed in China.

The bubbling tension between the two sides came to a head when a law was proposed that would allow extradition of criminal suspects to mainland China. The law would effectively be allowing people who are in Hong Kong, which has a different judicial system, to be prosecuted under the laws of China, a clear breach of the separate systems agreement still in place.

In response, Hong Kong residents held some of the largest protests in history which led to Carrie Lam, the Chief Executive of Hong Kong, to suspend the bill. Despite this, protestors still continue to fight, believing that the China will continue to try to tighten their grip on Hong Kong in less visible ways. The feeling isn’t unfounded, in 2016 and 2017, the Communist party successfully disbarred six legislators for “disrespecting” China for mangling their oaths of loyalty. The ambition for China is to slowly gain more and more influence over Hong Kong so that by the 2047 expiration of the “two government” agreement, they can unify the areas, with or without the support of the Hong Kong people.

Morey’s tweet put the NBA at the heart of the dispute. China is a nation that does not take adverse speech lightly. As stated above, they’ve taken away political seats merely for not properly saying an oath of loyalty. Furthermore, the Communist party has banned Twitter and WhatsApp, providing their state-controlled alternatives, and has quite the resume of censoring Western media and art in the name of pushing their own propaganda. After Vivo, CCTV, and Tencent suspended ties with the Houston Rockets, a Chinese Houston Rockets fan went on Weibo, the Chinese-controlled version of Twitter, and showed his support for the Rockets. He was detained. Detained for showing support of a basketball team.

The NBA is in a tough situation. Adam Silver has a fiduciary duty to the shareholders of the league to maximize the profits of the company, regardless of personal feelings. That’s why despite the dramatic actions China has taken, he will still do his best to salvage the relationship. It’s also important to remember that the NBA stands for the National Basketball Association. The product they provide, is a game. By trying to maintain a business relationship with China, they’re not condoning or accepting the behavior of the government, but rather trying to maintain a high-profitability market filled with basketball fans who can’t speak out against China without the prospect of going to prison.

With that being said, the league has to have limits. It’s one thing to try to take a no-opinion path on politics for the better of your business. It’s a whole other thing to allow a nation to force you to adopt their ideologies “or else,” because a partnership predicated on forceful submission isn’t a partnership at all.

The NBA has a duty to do what’s best for their bottom-line and that includes asking themselves what their brand stands for. They must have a threshold for what they’ll allow in the name of business and they need to be uncompromising in their approach. China is not the end-all, be-all of creating a Global game. The league has already made great headway in India, Africa is still a largely underutilized market, and there is already rising love for the game in Europe and Australia.

A nation that is ready to end a business relationships over a tweet in which they already censored their people from seeing is the sign of a client who will never be happy. If you compromise now, how long before another micro-slight starts the next geopolitical dispute?

I’m not one to put morality in business, I understand it’s just not how this world works. However, I do know good business is predicated on healthy relationships and if the price of playing ball in China is to be a slave to their ideologies than it’s not only troubling politics, but it’s not good business either. A brand, and what that brand stands for, is the foundation of generating growth in any sector. So to Adam Silver and the other 29 NBA owners, I only have one question:

What does the NBA brand stand for?

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