The Daily - Why China Went to War With the N.B.A.

Episode Date: October 11, 2019

A seven-word tweet in support of Hong Kong’s antigovernment protests by Daryl Morey, general manager of the Houston Rockets, triggered a furor in both China and the United States. The ensuing controversy revealed the unspoken rules of doing business with Beijing. Guest: Jim Yardley, the Europe editor of The New York Times and author of “Brave Dragons: A Chinese Basketball Team, an American Coach, and Two Cultures Clashing.” For more information on today’s episode, visit nytimes.com/thedaily. Background coverage: An exhibition game between the Los Angeles Lakers and the Brooklyn Nets in Shanghai this week was nearly canceled because of China’s dispute with the league. At the game, even longtime fans said they would choose patriotism over the N.B.A.President Trump declined to criticize China’s handling of the controversy, instead opting to publicly condemn two basketball coaches who have spoken out against him in the past.

From The New York Times, I'm Michael Bavaro. This is The Daily. Today. A seven-word tweet about Hong Kong, sent by an NBA executive, triggered an international furor in both China and the United States. My colleague Jim Yardley on what the controversy reveals about the unspoken rules of doing business in China. It's Friday, October 11th.

Jim, for those of us not steeped in the world of the NBA, tell me about Daryl Morey. Well, Daryl Morey is the general manager of the Houston Rockets. So he runs the team. And he's probably one of the more unlikely general managers you're going to find in the NBA. Most of those guys are former players or they have been in the past. He was a data nerd. Computer scientist Daryl Morey is the sport's foremost data and statistics guru among NBA bosses. Daryl Morey is the sport's foremost data and statistics guru among NBA bosses. You can break winning down into two things. One is how many points do you get?

He'd worked for a data firm and the whole league was like, who is this guy? But he was kind of of an era. I mean, you probably remember Michael Lewis's book, Moneyball, and it was about Billy Bean and the Oakland A's and how Billy Bean used data and analytics to kind of reinvent baseball. And he also used it to save money. Well, Daryl Morey was the sort of money ball figure in basketball. In fact, they came up with the nickname Morey Ball. So he kind of in NBA circles and in fan circles, he became kind of famous. And then, of course, he's really famous now because a few days ago, he looked out in the world and he saw the protests in Hong Kong and he decided to tweet. And what does Maury's tweet say?

It says, fight for freedom, stand with Hong Kong. So that sounds relatively innocuous. I think in a certain context, absolutely, many people are saying much stronger things. But not in this context. Almost immediately, it blew up all over the world. The NBA and its franchise, Houston Rockets, they are in hot water in China. He was swiftly criticized by the Chinese government. The owner of the Rockets, Tillman Fertitta, instantly recognized this was a big problem. Owner Tillman Fertitta quickly stepped in saying,

Maury does not speak for the rockets. We are not a political organization. I mean, this was a mounting disaster for the NBA. And Jim, why would that be exactly? Why would China or really anyone care about the online musings of a general manager of an NBA team about Hong Kong? Well, what people don't know, or most people don't know, is the NBA is a major player, if you will, in China and has been. It's one of the biggest foreign brands in China. In America, you know, I grew up in North Carolina and basketball is everything there. And we think of basketball as something that belongs to the United States. It's like part of us in a way. I mean, it's organic with our character. But actually, the game itself was invented by YMCA missionaries. And they wanted to have a game to play indoors in the growing cities of

America. Then in a couple of years, the missionaries took this all over the world, and they took it to China. What year is this, roughly? It landed there in the late 1800s and began to take root in the early 20th century. Really quite an interesting time in China, because China had just kind of ended the century of humiliation, a century when they were surpassed by the West. And these YMCA missionaries came in trying to, A, convert Chinese to become Christians, and then, B, help China pick itself up. And they said, look, to be a strong country, you need strong bodies. You need to be strong people. And so they introduced basketball. And what changed,

of course, was Mao. Virtually all China, with its vast population of between four and five hundred million people, is now under communist control. Mao Zedong and his government ruled China. 1949, he took over and he got rid of almost everything, but he kept basketball. Yeah, it was a favorite sport of the generals of the Red Army. They liked to play basketball, and they did it for decades. And then finally Mao died, and it looked like the whole Chinese communist regime would collapse. But instead... Mao's death will mean changes in China, but peaceful changes.

A new leader, Deng Xiaoping, came in and he opened China to the world. The American president and the Chinese vice premier signed two agreements, the first on cultural exchanges. And that turned out to be what gave life to basketball in China. How's that? Well, you suddenly had these people who loved the sport, but had never really seen it played anywhere else. had these people who loved the sport but had never really seen it played anywhere else.

And in 1987, David Stern arrived in Beijing. Now, David Stern was the longtime commissioner of the NBA. And David Stern, probably more than most, recognized globalization. He saw that entertainment, that basketball, was something that could be commodified and it could cross borders through television. Stern cut a deal with the Chinese authorities where they would mail, I think once a week, an eight-track tape of NBA highlights. Then the eight-track tape would be scrutinized and censored if it needed to be. It would be played on state television. Wow. Yeah.

And so they suddenly, they were like, they have NBA highlights. Look at that pass. It's Tulane Bear. Yeah, yeah. And then by 1990, they kept opening up China. They kept opening up, and they wanted to be more modern. So they signed a TV deal with the NBA. And anyone who knows basketball knows that by about 1990,

you had the era of Larry Bird, Magic Johnson, but most of all, you had the era of Michael Jordan. And when I used to live in China and I traveled around the country with actually a pro basketball team. Wait, I'm sorry. You traveled around China with a pro basketball team? Oh, yeah. Yeah, I did. Actually, I lived in Shanxi province. I lived in coal country and I lived with a team, a pro team called the Shanxi Brave Dragons. And the owner was a former coal operator who made millions in privatization and was obsessed with basketball. And he used to watch a little black and white screen and would see Jordan. watch a little black and white screen, and would see Jordan.

Oh, how spectacular by Michael Jordan. And he just thought he'd never seen a man he thought could fly. He thought it was amazing. Yo, this is Morris Blackman, and this is my main man, Michael Jordan. And there's a pair of tights. Hey, Jordan, some Nike. And, you know, at the same time as the Michael Jordan era of the NBA, we were also having this sort of the Nike era. With these stomping sneakers, do you understand? New Air Jordans from Nike are here.

The arrival of the big brands. So if you're a fan sitting out there and you've never seen American basketball, you watch the game. And then soon or fairly soon, you began to see the Nike commercials. And Jordan was actually flying in the Nike commercials. Who says man was not meant to fly? Air Jordan. For many people, the commercials were as intoxicating as the games. I mean, this was like a whole new world of entertainment that they'd never seen before.

And slowly, you know, the NBA even then saw this is going to be a big place for us. Thanks to those YMCA missionaries, the audience was already there. They were just waiting for the best product. And the NBA was there to deliver the best product. So it sounds like for many Chinese, their introduction to the United States was through basketball, through our most famous players. That's what America was to them. This was something that you could watch. It seemingly didn't have any politics attached to it.

It was pure fun, pure entertainment. And, you know, the players were personalities. He's been called outrageous. He is unbelievable. He's Charles Barkley, but you better call him Sir Charles. And now entering Burger King, 6'9 forward, number 32, Mr. Dependable, the mailman, Karl Momo. You know, that was something that in the context of watching American leagues, you know, Chinese newspapers began to write about the players and their personalities and their personal style, their individualism. And I think that was all very appealing for a country that was sort of coming into its own, was opening up to the world.

And of course, where everything really changed, though, was in 2002. With the first pick in the 2002 NBA draft, the Houston Rockets select Yao Ming from Shanghai, China. The Houston Rockets used the first pick in the NBA draft to pick Yao Ming. Yao Ming was the greatest player China has ever produced and certainly one of the biggest players to ever play. I think he's 7'5". I met him once, and I shook his hand, and my hand just disappeared. He is such a huge guy. But suddenly, Yao Ming is the first pick.

Oh, Yao, earlier this one. Later in the first quarter, Shaq spinning. Blocked by Yao. Yao blocked O'Neal's first three shots of the game. He goes to America, and he becomes an all-star. For Chinese fans, this is fantastic, because even as they loved basketball, they always recognized that their players

really couldn't compete in the NBA, except here was Yao. He was doing it. He was incredible. They're watching live in Shanghai at 10.30 in the morning as O'Neal goes right at Ming. Viewership just went through the roof on Chinese television. There are 1.3 billion additional fans who give a hoot about this game.

The most populous nation on earth will have one eye on their breakfast cereal and the other eye on this building. And of course, for the NBA, I have to imagine this is very good business. Oh, definitely. The NBA has always known that there is huge money to be made in China, without question. I mean, the market itself is massive. You have 300 million Chinese who play basketball. The NBA started its own China subsidiary, NBA China. When it was formed, it was worth $2 billion. It's now worth $4 billion. Oh, it's just stunning.

One of the big reasons for that, of course, is streaming. Five seconds. Four seconds. Three. Four seconds. Two. They are now streaming live NBA games. So you have hundreds of millions of Chinese

going to work every day and watching the NBA live on their phones. Jim, as all this money is coming in and as basketball is just exploding in China, how is the NBA grappling with what I have to imagine are the moral complexities of operating in a country like this, where authoritarianism reigns, where human rights are constantly violated, and where freedom of speech is not really completely allowed? Oh, I definitely don't think they're naive. I think the NBA knows full well the situation it's operating in. You know, it's interesting back in 2006, David Stern, the commissioner who sort of made all this possible, had an interesting quote, and I'll

read it to you. It said, believe me, the China situation bothers me. But at the end of the day, I have a responsibility to my owners to make money. I can never forget that no matter what my personal feelings might be. That's pretty straight ahead. And so, yeah, I think the NBA, though, one of the rationales that they believe in was China is opening up, and what we are doing is creating a way for both cultures to come together, a way that's not political,

something you could watch and sort of let the differences fall away. So the thinking is, let's be all about sports, let's stay out of politics, and we can do some good here. There's an expression for Western companies, avoid the three Ts, Taiwan, Tibet, and Tiananmen Square. Basically, companies knew that if they stumbled onto those three topics, they would pay for it with the Chinese government.

Mercedes-Benz, the carmaker, they just apologized to the Chinese government for featuring the Dalai Lama in an ad. Well, San Francisco-based Gap is apologizing over a shirt that featured what China calls an incomplete map of its country. Marriott International is apologizing after a questionnaire gaffe that listed Chinese-claimed regions like Tibet and Taiwan as separate countries. Those were the red lines, the ones they knew about. And that's kind of the world that they operated in.

We'll be right back. So the unspoken rule here is don't kick the hornet's nest. And you can do business in China, you can make a ton of money, and it will all be fine. Yeah, definitely. That was the hornet's nest that Daryl Morey kicked. And it instantly put the NBA in a perilous position. The NBA had spent decades building this massive business with projections that the business was going to double and triple in years. And suddenly it's tied up in politics that it has spent its whole time trying to avoid. And it had to react quickly in real time, and its early statements

were not pretty. What were those early statements? Well, Sunday, October 6th, the NBA released a statement, and I'll read it to you. We recognize that the views expressed by Houston Rockets general manager Daryl Morey have deeply offended many of our friends and fans in China, which is regrettable. While Daryl has made it clear that his tweet does not represent the Rockets or the NBA, the values of the league support individuals educating themselves and sharing their views on matters important to them. We have great respect for the history and culture of China and hope that sports and the NBA can be used as a unifying force to bridge cultural divides and bring people together. So what you can see in the statement is basically the NBA trying to have it both ways. It's sort of, you know, apologizing more or less

to China and at the same time putting in language that suggests that it still allows its individuals to speak out. I mean, the reason for this, of course, is the NBA in the United States is the great progressive sports league. It's the league where players speak out, coaches speak out. Spurs and U.S. men's national team head coach Greg Popovich had some very strong comments on the president in an interview. I mean, many players and coaches are quite political in the Trump era and quite critical of Trump. This man in the Oval Office is a soulless coward who thinks that he can only become large by belittling others.

We have a pathological liar in the White House, unfit intellectually, emotionally, and psychologically to hold this office, and the whole world knows it, especially those around him every day. So, you know, at one level, the NBA has got to, how can it allow that to happen in the United States where it lets its players be freewheeling commentators on politics and then suddenly is apologizing to China

when a GM puts up a tweet about democracy? Right. And how does that mixed message go over? Very badly. It does nothing in China. It doesn't please or appease anyone. And it actually causes a huge backlash

in the United States. And this is totally disgusting that the NBA is willing to be more concerned over paychecks and money than rather humanitarian efforts. They had like a one and a half billion dollar deal with the television rights. So it's the almighty dollar that apparently, you know, is above everything else. I mean, literally people are lambasting the statement as being kind ofneed and not standing up for free speech. Ted Cruz tweeted this.

As a lifelong Houston Rockets fan, I was proud to see Daryl Morey call out the Chinese Communist Party's repressive treatment of protesters in Hong Kong. Now in pursuit of big money, the NBA is shamefully retreating. It's incredible who it brings together. Across the aisle, coming in hot, Beto O'Rourke tweets the only thing the NBA should be apologizing for is their blatant prioritization of profits over human rights. Beto O'Rourke and Ted Cruz, two politicians who hate each other's guts, are both unified in condemning the NBA. This is an absolute public relations nightmare. They're getting it from both sides here.

They have put themselves in a terrible spot. And what is the spot they put themselves in? Chinese companies are furious. They're suspending licensing agreements with the NBA. The Rockets are banned from state television on CCTV. The rockets are banned from state television on CCTV. State television is no longer showing the exhibition games. It is a full-blown confrontation. And Adam Silver, who is sort of famous as being the most progressive commissioner of the American sports leagues, is really in a fix. So now the NBA has thoroughly offended both sides. People in America think that the league has kowtowed to communist China,

done what this authoritarian government wants. And over in China, the Chinese think that the NBA has injected politics into this wonderful, beloved apolitical sport and basically put their hand on the third rail of Chinese politics. Exactly. That's quite an achievement. Well, you're right. It was absolutely the opposite of what any multinational wanted to do,

offend all of its consumers everywhere. But silver is in Asia for this tour. As some of you may know, I issued a statement shortly before this press conference because I thought there was a lot of misunderstanding out there about our position. He walks into a press conference, he's in an impossible, difficult situation. And essentially what I've said in that statement is the long-held values of the NBA are to support freedom of expression, and certainly freedom of expression by members of the NBA community. And he stands up for free speech. He sort of wipes away some of the muddled weakness of those earlier statements of the league.

What I also try to suggest is I understand that there are consequences from that exercise of, in essence, his freedom of speech. And, you know, we will have to live with those consequences. It's my hope that for our Chinese fans and our partners in China, they will see those remarks in the context of now a three-decade, if not longer, relationship. If there were economic consequences, so be it. So I think that he recognized he had to figure out what the League stood for, and he did. Right. He's forced into this position, and it's not necessarily the League's first instinct. I mean, look, there's absolutely no way that when Adam Silver took off from, I assume,

New York to fly to Asia, that he would have wanted or thought he would end up having to be a defender of free speech. It's remarkable, if you really think about it, that a single tweet launched this geopolitical situation. It became another moment where people who really pay attention to the U.S. and China are kind of asking themselves, hey, is this another example about how we're breaking apart, about how this whole decades-long project of working together and integrating our economies and sort of seemingly moving in the right direction or the same direction, is it falling apart? It's kind of stunning that basketball raised that question.

And so we're sort of staring at these situations where we're in a moment of great tension between China and the United States. We have a trade war. We don't quite know how that's going to play out. You know, this economic arrangement that's been in place for decades is really in an uncertain moment. And for all of these companies playing by these unspoken rules, the pressure is rising and it's just inevitable. It's going to be harder and harder to paper this over, to sort of pretend like these problems don't exist. And so what exactly is the solution? Just kind of hope that you don't kick the nest or kick it too hard? Or is there an alternative?

There's so many layers to it. You know, politically, with the trade war, you hear certain people talking about, like, are we seeing a great decoupling where this economic arrangement between these two great giants is sort of falling apart. Is this what we're seeing? There's the other view, too, and the one that has usually held sway and that just might hold sway this time, which is that pragmatically, there's so much at stake for both countries. They're going to find a way to go forward. China is a big power. It's going to be the biggest economy in the world soon, and by some measures it may be. But the United States is a powerhouse too. And just as they're important to us, we're important to them.

And they don't want to kick our hornet's nest too hard either. You know, a complete break with the United States takes us into just terrifying uncharted territory. They don't want that. Well, having sufficiently tortured this hornet's nest metaphor. Thank you, Jim. My pleasure, Michael. It was nice talking to you. We'll be right back. Here's what else you need to know today. On Thursday, two associates of the president's private lawyer, Rudy Giuliani,

were arrested for their role in an illegal scheme to funnel foreign money to a Texas congressman in order to influence relations between the U.S. and Ukraine. The arrests suggest that the shadow foreign policy pursued by Giuliani and his allies on behalf of President Trump may have included criminal conduct. Both associates of Giuliani, Lev Parnas and Igor Fruman, tried to use campaign donations to convince the congressman, Pete Sessions of Texas, to support the removal of the U.S. ambassador to Ukraine, whom both Trump and Giuliani saw as an obstacle in their efforts to get Ukraine to investigate the president's rivals. That ambassador is expected to be deposed by House impeachment leaders later today. And...

The Turkish military assault on northern Syria has killed at least 23 Kurdish fighters and four civilians and injured around 70 more, putting the United States in the extraordinary position of having allowed for the death of its allies. The president of Turkey, Recep Tayyip Erdogan, dismissed international outrage over the assaults, saying that the operation was in the best interest of Turkey and Syria. Because Kurdish fighters worked closely with the U.S. to fight ISIS in Syria, the operation and Trump's role in it has infuriated both Democrats and Republicans in Congress. The Daily is made by Thank you. Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly.

Special thanks to That's it for The Daily. I'm Michael Barbaro. See you on Monday.