- [Narrator] One tweet is putting at risk
the NBA's multi-billion-dollar opportunity in China,
while upsetting basketball fans at home and abroad.
It was sparked when Houston Rockets general manager
Daryl Morey tweeted his support for Hong Kong protesters.
(crowd chanting)
The NBA stands out from other U.S. companies
in that it didn't kowtow to China's pressure,
whereas other companies have.
- They'll say, "Sorry,"
they'll express regret at what's happened.
The idea is for them to get
their relationships with the Chinese.
What's been interesting with the NBA
is this backlash from American consumers
has made that much more difficult for them.
- [Narrator] This dilemma is heightened even more
as China could overtake the U.S. as the world's
largest retail market as soon as this year.
So can U.S. brands reconcile its values
and Chinese money? (camera clicking)
The Houston Rockets are one of the most
popular NBA teams in China.
Chinese basketball legend Yao Ming
spent his entire NBA career in Houston.
- A lot of American companies have made
a really big deal out of China in the past few years.
It's that sort of premier growth market,
it's where they see a lot of their expansion
in the coming years.
- [Narrator] Today, China has 300 million
basketball players,
nearly as many people as there are in the U.S.
In July, Chinese tech giant Tencent,
which is the official broadcaster of NBA games,
paid at least $1.5 billion to extend
its streaming deal with the league.
The team tried to distance themselves from Morey,
who said he didn't mean to offend anyone,
but the damage was done.
Billions of dollars are now at stake.
Chinese companies, sponsors,
and the Chinese Basketball Association
suspended ties with the Rockets.
The national TV broadcaster decided to not air
two upcoming NBA games and said it would reconsider
its partnership with the league.
- Tencent reported that 490 million Chinese people
had watched an NBA basketball game last year.
That's a huge deal.
- [Narrator] The NBA's initial response
called Morey's tweet regrettable,
but that drew swift criticism from U.S. politicians
on both sides of the aisle.
(dramatic music)
- The usual way that U.S. companies navigate through,
and this is true of companies outside the U.S. as well,
is to give in, effectively.
They'll apologize or back down in whatever way they can
without breaking laws in their home country.
- [Narrator] In June, Nike withdrew a shoe collection
in China after its codesigner brand supported
the Hong Kong protesters' demand to kill
an extradition bill that sparked the protests.
The luxury retailer Tiffany apologized for a tweet
that Chinese netizens saw as pro-Hong Kong.
Covering the right eye has become
a symbol of police brutality
after a woman was shot in the eye by police.
The NBA took a different stance.
- We are not apologizing
for Daryl exercising his freedom of expression.
- What they're facing is the difficulty
between their U.S. base of consumers,
who don't really want them to apologize
for expressing an opinion on Hong Kong,
against their new Chinese consumers.
They've faced a clash between the two groups.
- [Narrator] The NBA is discovering
that it's impossible to have it both ways.
The league's strong brand in the U.S. could be tarnished
if its executives are seen to be in Beijing's pocket.
- I think it's gonna be completely impossible
to avoid these scandals completely.
Essentially, it's balancing
the freedom of speech of your employees
and the people associated with your company
against what Beijing wants
in your fastest-growing growth market.
(shoes squeaking) (people chattering)