A Cost-Benefit Analysis of the NBA’s Situation with China

On October 4, Houston Rockets general manager Daryl Morey tweeted “fight for freedom, stand with Hong Kong.” He had no idea what kind of chain of events that would set off.

Rockets governor Tilman Fertitta separated himself and the team from Morey’s position. China’s government denounced it. Many Chinese citizens were reportedly outraged by it. The Chinese consulate in Houston effectively requested Morey be fired when they urged the Rockets to, “correct the error and take immediate concrete measures to eliminate the adverse impact.”

The NBA responded by issuing an apologetic statement that tried (unsuccessfully) to toe the line between appeasing China and defending free speech. Bipartisan members of Congress, including Senator Ted Cruz and Alexandria Ocasio-Cortez, criticized the NBA for what they viewed as a kind of complicity.

President Donald Trump called Golden State Warriors head coach Steve Kerr “weak and pathetic” for not taking a stance. And Secretary of State Mike Pompeo took aim at the league, saying, “The pages of George Orwell’s ‘1984’ are coming to life there (China). I wish the NBA would acknowledge that.”

Brooklyn Nets governor Joe Tsai, a Taiwanese-Canadian, wrote an extensive Facebook post explaining another side, calling Hong Kong a “third-rail issue” in China.

Of all the responses, though, Steve Kerr’s might have been the best.

While many took his answer as a “no comment” or hiding from the issue, I take him at his word that he actually wanted to understand the issue better. It’s a response that more should take because the issue is far more complex than just a “good guys vs. bad guys” thing that many want to portray it as.

Nothing is as simple as that.

I lived in Liberia, West Africa form 1982 to 1984. It was a time “between coups.” A couple of years before my arrival, a man named Samuel Kenyon Doe led a brutal military coup that ended with 13 members of the previous government getting staked on the beach and decapitated on live TV.

I was a high school student then, and our journalism class took a tour of the Daily Observer—the Liberian newspaper operated by Kenneth Best and his wife, Mae. As we entered, he joked with us, “You caught me between jailings.”

Except, while his tone was light, it was literally true. Mr. Best was frequently detained for his criticisms of the Liberian government. In 1995, he was eventually granted asylum in the United State before going back in 2005 when the Civil War there ended.

He was a living example of the idiom “have the courage of your convictions.”

Another story from my days there shows the other extreme. The main means of transportation around the capital city of Monrovia was taxis, but the cabs would pick up more than one passenger. One day, I was on my way to my best friend’s house when the cab stopped to pick up two Liberian soldiers carrying M-16s.

One of them asked me, “You think America is better than Liberia, don’t you?”

As he toyed with his gun suggestively, he said, “Tell me Liberia is better than America.”

So there I was with a decision to make: Do I make some sort of meaningless patriotic stance or tell him what he wanted to hear and not worry about getting shot?

I’m not an idiot. I told him Liberia was better than America. Shockingly, it had no impact on reality. But I live to tell the story.

The reason I tell these two stories is that they illustrate two ends of the spectrum. There is a time to fight for something, but there is also a time to not provoke things unnecessarily.

The whole situation with China, the NBA and Hong Kong is somewhere in the middle of all that. Let’s do a cost-benefit analysis of the NBA’s position.

The Cost

Jan 17, 2019; London, ENG; NBA commissioner Adam Silver gives a pre game press conference before the game between the New York Knicks and Washington Wizards at The O2 Arena. Mandatory Credit: Steve Flynn-USA TODAY Sports

A lot of the criticism centers around the money. But this critique is cavalier about the amount of money at stake and the consequences if it’s lost.

According to Yahoo’s Keith Smith, “At least five NBA teams are having their salary cap personnel plan for a scenario in which the cap for the 2020-21 season could drop between 10 and 15 percent due to the current situation between the NBA and China.”

Jeff Zillgitt and Mark Medina of USA today say that “billions of dollars” are at stake.

This is no trivial sum of money, and it’s not just the “teams” that are going to lose it. Nor is it the players. Criticize James Harden all you want for his apologizing to China, but the reality is he has a guaranteed contract and it’s not going to cost him a dime, regardless of what China does.

That lost money has to come from somewhere, though, and logically, it seems like that is going to impact lower-level employees who have nothing to do with Hong Kong or China. It’s going to be people across the league losing their jobs.

It’s one thing to say the NBA should take the hit, but that thought needs to be followed through to the end. The people taking the hit are ordinary working people who didn’t ask for this.

It’s easy to be bold while risking someone else’s job.

There are consequences to losing billions of dollars, and the responsible thing here is to try to understand why NBA teams are trying to walk the line.

The NBA does lose some face here, of course. It’s a league that has prided itself on taking the lead on social issues. For example, it moved the All-Star Game out of Charlotte due to North Carolina’s due to its House Bill 2 law that allowed for the discrimination against the LGBTQ community.

Some have seized on this as an opportunity to argue the NBA is shallow in its courage. The argument goes that the league is all about social reform when it doesn’t cost anything, but it backs down when money is involved.

While there might be some validity to the comparison, it’s also a bit disingenuous in that the people who are making the argument aren’t really risking anything to make it, either.

And let’s not gloss over the risk of players speaking out against China while they’re actually in China.

Yes, in America, we have the freedom of speech and we’re protected by the Constitution. But it’s naive to think that those things are assurances to NBA players who are in mainland China, where they are subject to Chinese law. And even if you think the risk of an NBA player getting arrested for speaking against the Chinese government while he is in China is minimal, it’s not your freedom at risk, so it’s not your risk to be taking.

For some, there is no cost. It’s just opportunism, especially from certain GOP leaders who are quick to denounce the NBA for its complicity yet are wholly silent on President Trump’s promise to stay quiet on Hong Kong in order to protect a trade agreement.

They’re literally calling out the NBA for supposedly doing the same thing they are overtly doing themselves.

Again, Senator Cruz might be willing to condemn the NBA but hasn’t said anything about Ivanka Trump getting 13 trademarks approved by China, some of them while her father was there.

Nor is the NBA the only big business that made compromises, including the most serious ones that have gotten far less attention.

Metro UK reported: “Apple has removed from its online store a smartphone app that allows Hong Kong activists to report police movements after an official Chinese newspaper accused the company of facilitating illegal behaviour.”

This might seem like it’s a “whataboutism” but it’s absolutely not because my point isn’t to deflect from the NBA. It’s to illustrate that the reaction to the NBA is comparatively excessive.

The measured response to the risks Apple takes should be considered with the NBA too.

What’s being shown in reality is that the response from some (not all) is politically motivated and possibly insincere.

For example, GOP Senator Josh Hawley has suddenly become the champion of Hong Kong, even traveling there to show his support.

His timeline on Twitter is almost exclusively about Hong Kong since Oct. 4, consisting of 36 tweets (out of 39 total). Yet, scrolling through his timeline, I can’t find a single one about the situation before then.

Not one of his tweets addresses the Trump Administration’s complicity and avowed silence, either, though there are a couple of tweets about the Apple app being removed. That’s right, there’s nothing about the President or his family doing business with China. Or the trademarks the President’s daughter got.

Thus, Hawley’s sudden championing of Hong Kong would seem a lot more sincere if it didn’t look like it was a giant subtweet against the NBA. It would come across as more of a criticism of China if China, and not the Association, were his target.

There is a segment of voters who don’t like the league’s stances on things like LGBQT rights, and they’re also among the most aggressive critics of the NBA now (though, that’s not to say it’s exclusive to them). But, politically speaking, for people like Hawley, there is a benefit to this kind of calculated, targeted and limited critique of the NBA, and that shouldn’t be ignored in the conversation, either.

He can wave a flag at a straw man while scoring political capital without actually taking a stand against those with the power to change the situation (who are not), but who also happen to be his meal ticket.

The Benefit

Oct 23, 2017; Houston, TX, USA; Houston Rockets owner Tilman Fertitta (left) and general manager Daryl Morey (right) talk during the game against the Memphis Grizzlies at Toyota Center. Mandatory Credit: Troy Taormina-USA TODAY Sports

Kenneth Best counted the benefit that he was supplying an entire nation with the truth about the Liberian government, and for that reason, he was willing to risk everything.

I counted the benefit of saving 5 seconds of personal pride against the risk of my life and didn’t count it worth the cost.

What benefit would come from the NBA pushing the issue? Is China going to back down and retract the law which provoked the protests?

Is Hong Kong going to actually be freed?

These are valid questions because, without this, what is the benefit? And if there is no benefit, how do you justify the cost?

What power does the NBA actually have here? It is true that there are billions of dollars at stake on both sides, but billions of dollars don’t matter nearly as much to China as it does to the NBA.

Other than that, Adam Silver isn’t an American Congressman. He’s not a US Senator. He’s not the Secretary of State. He’s not the President. He has no negotiating power.

I find it more than ironic that some from all of those aforementioned groups are spending more time reacting to the NBA and calling out Adam Silver, especially Pompeo and Trump, rather than actually addressing their own colleagues in power. Some would argue that negotiating with China is the job of the SOS and the POTUS, and not the NBA Commissioner’s.

There could be a limited benefit of morally encouraging the people in Hong Kong, but that would be at least partially (if not entirely) offset by inflaming the people of China.

And Joe Tsai was not exaggerating: In China, the issue of Hong Kong really is a third-rail issue—similar to those that surround his own disputed homeland of Taiwan. NBA fans have boycotted the NBA over there because of Morey’s tweet.

May 9, 2019; New York City, NY, USA; Taiwanese businessman Joe Tsai (center) cheers during the second half of the preseason WNBA game between the New York Liberty and the China National Team at Barclays Center. Mandatory Credit: Vincent Carchietta-USA TODAY Sports

Americans aren’t the only people who can be “patriots”, and very few people in the world view world or national politics through an American paradigm.

That’s not to say that I approve of everything that China is doing in the mainland or in Hong Kong. I am saying it’s an incredibly complex situation, and the NBA shouldn’t be the entity stepping in to resolve complex issues. Kerr is right that it’s something to learn about before jumping in and speaking about it.

Saying it’s complex isn’t a copout. If a solution were that simple, one would think our finger-pointing politicians would have solved it a while ago, much less the myriad American businesses doing business with China long before the NBA made its move there.

There isn’t a chance the NBA pushing things is going to resolve anything, and there’s a great deal of potential to make them worse, not just in terms of the relationship between the league and China, but potentially even for the protesters in Hong Kong.

I would say the NBA should leave it to the professionals, but apparently the professionals don’t want to do it.

So direct your criticism at them, not the league.

The only benefit to the NBA “backing down” is that people with no skin in the game now feel better about themselves as they find some new reason to yell about how the NBA players are hypocrites.

Asking the league and its players to sacrifice billions of dollars and people working for the NBA to lose their jobs with no tangible positive outcome doesn’t seem like a favorable cost-benefit analysis. You can agree with what the league is doing or disagree with it, but either way, you should consider what you’re asking it do before you judge.

And when you’re done with that, start asking why more people with the power to affect change—including all our business relationships and government—aren’t doing more. The NBA has a part to play, but it can’t do it alone.