Two weeks ago, Rockets GM Daryl Morey tweeted his support for the pro-democracy protesters in Hong Kong. The protesters have been demonstrating for nearly two months now. The protests began when a young man murdered his girlfriend in Taiwan and fled to Hong Kong. The Chinese wanted to extradite the man to mainland China to be tried for the crime. However Hong Kong, which isn’t technically part of China, lacked an extradition agreement with Beijing. Hong Kong was a British colony until the early 1990s, when their 140 year lease (lmao what) expired and the city went back under Chinese control. Hong Kong is considered a “special administrative region” that enjoys semi-autonomy from the Chinese mainland regime. They have their own government and laws. The executive of Hong Kong, in an effort to extradite this man for murder, introduced a bill that would create an extradition treaty with Beijing. However residents of Hong Kong were wary of the bill, and feared that Beijing would abuse this power to extradite citizens for bullshit crimes or politically motivated reasons such as associating with someone with bad credit or sharing Xi Jingping memes. There was a massive groundswell of opposition for the bill, and the protests soon evolved into a more general pro-democracy, pro-freedom of speech movement that is still a fluid situation. The Chinese have doubled their troop garrison in Hong Kong, and the protests have devolved into riots in many places. Many protesters fear that should their efforts fail, the movement will be crushed violently a la the Tiannamen Square massacre and the protestors will be engulfed in the corrupt Chinese judicial system. Needless to say there is a lot on the line for protesters.
Following Morey’s tweet a veritable shitstorm ensued. The owner of the Rockets, Tillman Furtada (recent author of a book titles Shut Up and Listen), quickly threw Morey under the bus with an all caps tweet informing his Chinese overlords that the Rockets are NOT A POLITICAL ORGANIZATION. The Chinese government responded quickly, with several Chinese companies and organizations suspending their relationship with the Rockets, who are perhaps the NBAs most popular team in China. The NBA went into full damage control mode, with the league distancing themselves from Moreys tweet calling his actions “regrettable” and going as far as issuing a strongly worded tweet condemning Morey. At the time, several NBA teams were playing exhibition games in China, including the Rockets, Lakers, and Nets. Many feared that the games would be cancelled, that some kind of violent protest would break out at the games, or worst of all someone would put a microphone in Kyrie Irving’s face and ask him to comment on the situation. The games went on as planned, however the controversy only continued to simmer.
China is perhaps the NBAs most important developing market. In addition to competitive marching and snitching on political undesirables, basketball has become an immensely popular pastime over the last decade or so. Like virtually every industry on earth, from manufacturing to financial services to real estate, the NBA saw the financial boon a strategic partnership in the Chinese market would have. It represented a win-win for all parties involved; the owner class and the players would see a massive spike in revenue, namely from TV partnerships and jersey sales, and the Chinese would have access to the worlds premier on-court basketball product. Apologies to Jimmer Fredette and Stephon Marbury, but the CBA is a fucking joke. Jimmer can’t even make a G-League roster and he’s averaging like 40 points per game. They literally built a statue to honor three time CBA champion Stephon Marbury, who washed out of the NBA more than 10 years ago. I digress.
The influx of Chinese cash into the NBA revenue stream was seen as beneficial to all NBA parties involved, and was critical to the growth of the league as a whole. More viewers meant fat TV contracts and merchandise sales for the league, and lucrative endorsement deals for players with Chinese sneaker companies like Li-Ning and Anta. It was simply an account the NBA as a whole could not afford to fuck up. In order to properly understand the magnitude and the importance of this cash, it’s also important to understand how revenue sharing in the NBA works. The way that the NBA collective bargaining agreement works is that the league pools together all NBA related revenue from TV contracts, sponsorship deals, and merchandise sales. This is called “basketball-related income” aka BRI. Individual teams collect ticket sales and local sponsorship deals, but these don’t count towards league-wide BRI. All this BRI is then split about 50/50 between the owners and the players. The 50% allotted to players is then divided up by 30 (total teams in the NBA) and that’s where the salary cap comes from. Teams are required to use at least 90% of this allotted salary to pay players, and just about every team uses all of it. The salary cap is set at $109 million for the 2019-2020 season. Multiply that by 30, then by 2, and that’s roughly $6.5 billion in BRI league-wide. The point here is that player salaries are intimately tied to the success of the league as a whole. The league makes more money, so do they.
The cap was projected to be $116 million next season, about a 7% increase over this year. Now, with front offices bracing for the potential impact of losing the Chinese markets, some teams are preparing for scenarios where the cap drops by 10% to 15%. That’s about a $11-$17 million decrease in salary cap space. That is a lot of cap flexibility for a team to suddenly lose, especially considering how much player movement there was last season. All of a sudden those long term max deals are looking more and more like albatrosses. Ultimately the players who are going to get squeezed are not going to be the max contract stars, or the salary controlled rookies. Teams need stars to sell tickets, and more importantly, win games. Having star players is basically the only reliable indicator to winning basketball games (duh) and teams will still shell out for these players. And rookies are on team-friendly, low cost contracts for the first four years of their careers. They can’t negotiate for more money, so they are kind of stuck with whatever they get. It’s going to be the mid-level players who are going to have to take a haircut. This is where the cost control measures will come into play, because these players have less leverage than their superstar peers and lack the collective bargaining protects afforded to rookies.
Part of me thinks this was all just a galaxy brain level meta-strategy play on Moreys part to tank the salary cap and throw other teams into disarray. Really the only way to win long term in the NBA is deft cap maneuvering, and Morey is perhaps the best in the business at it. But them I considered how he will probably lose his job over this and the threat of extrajudicial Chinese assassins probably banishes it to the realm of conspiracy. In any case, just when it seemed like everything was about to blow over and the league would be in the clear, LeBron James stepped into the fray. At a press scrum this week, he had this to say about Daryl Moreys tweet and the subsequent shitstorm:
“I don’t’ want to get into a feud with Daryl Morey, but I believe he wasn’t educated on the situation at hand, and he spoke. And so many people could have been harmed financially, physically, emotionally, spiritually. So just be careful what we tweet and say and we do, even though, yes, we do have freedom of speech, but there can be a lot of negative that comes with that, too. I believe he was either misinformed or not really educated on the situation, and if he was, then so be it. I have no idea, but that is just my belief. Because when you say things or do things, if you are doing it and you know the people that can be affected by it and the families and individuals and everyone that can be affected by it, sometimes things can be changed as well. And also social media is not always the proper way to go about things as well, but that’s just my belief.”
Ok there is a lot to unpack here.
I think what Lebron means by “educated on the situation”, I don’t think he is actually referring to the situation on the ground in Hong Kong. I don’t think he is referring to the complicated politics of the protest itself or what it means geopolitically. He’s a basketball player for fucks sake, not a political pundit or some egg head PhD. Basketball IQ does not equal actual IQ. I think it’s pretty clear he is referring to it in the context of the NBA and it’s business dealings. Lebron is the face of the NBA, and any kind of harm to the NBA bottom line ends up hurting him too. In fact I think he has perhaps more on the line than any other player. He has a lucrative shoe deal with Nike, who made $1.6 billion in China last year. He is starring and producing Space Jam 2, a mostly likely terrible movie chock full of NBA players and properties. The Chinese film industry is 50% larger than that in the US with a huge appetite for American films, and can essentially make or break a movie financially. I also stand to reason he’s trying to trademark ‘Taco Tuesday’ in China considering there are probably 15 Mexican people in the whole country and that China will basically give anyone with enough money a trademark on anything. The gave fucking Ivanka Trump a trademark on VOTING MACHINES. VOTING MACHINES. You don’t think Lebron’s advisors are making those same calculations that front offices are? That they are telling him how many millions he’s going to lose if the NBA fucks this up? I don’t think Lebron could care less about the political implications of the tweet. Morey is fucking with his money, and that’s the only situation he’s referring to. Just look at his statement! He references the financial security before anything else. That’s all you need to know here. This isn’t a political issue to him, it’s business. Whether that’s good or bad is for you to decide.
Personally I think one should land on the side of human rights and free speech wherever and whenever. But I am also a nameless broke person with zero clout. The Chinese government doesn’t give a shit what I have to say. But I don’t accept the notion that this is Lebron somehow showing his true colors. Lebron’s business aspirations are no secret. He wants to be the next Magic Johnson/Michael Jordan NBA-superstar-turned-asshole-business-mogul. And for him being in China’s good graces is critical to that. He also has an extremely carefully curated public image. He is usually extremely thoughtful in what he puts out there. Thoughtful not in actual content, he is as vapid as he is prolific online. He is the King of Rapping Drake Songs in the Car. But thoughtful in the sense that he understands social media and media in general, and he knows how important it is to his bottom line not to rock the boat. I think this is the source of his critique of Morey, that he failed to consider how this would rock the boat league-wide.
Lebrons kowtowing to an authoritarian regime and his seeming reluctance to endorse the pro-democracy, pro-human rights agenda of the Honk Kong protesters naturally forces one to reconsider all of his past stances such as calling attention to police brutality in black communities (Eric Garner “I Can’t Breathe” shirts) or him standing up to Donald Trump his ilk when he said nobody wanted to visit the White House (Laura Inghrahm “Shut up and dribble”). I reject the notion that this somehow invalidates everything he has done for his community and for social justice. He built a fucking school in Akron for Christ sakes. Have you been to central Ohio? It’s fucking TERRIBLE. Absolute Rust Belt hellscape of strip malls and crumbling infrastructure. For one, standing up for police brutality and getting into a twitter beef with Donald Trump are slam dunks (no pun intended) in the minds of NBA fans and executives alike. The NBA fanscape in a more urban, left-leaning cohort that other major sports like baseball and football. These were probably sentiments shared by the vast majority of most NBA fans anyways. It’s not like the Kaepernick situation where the NFL has to appease their Trump-worshipping, shoe-burning underbelly to stay afloat. The NBA could care less because ultimately it’s just good PR for the league, who prides itself on it’s relatively progressive politics and freedom of players to express themselves. And at the end of the day I think LeBron was standing up for things he legitimately cares about and that are affecting him and his community.
However the Hong Kong/China situation is markedly different. The growth of the league into a global game is heavily reliant on the Chinese market. The NBA recognizes it probably won’t make much more inroads with fans domestically, unless everyone ditches baseball en masse or the NFL somehow implodes, which is extremely unlikely. Furthermore the internal political dynamics of the US allow for dissenting opinion and opposition to coexist within the marketplace. Conservatives and liberals don’t see eye to eye and probably want to murder each other with ice picks when it comes to most political issues, but when it comes to business all that pretty much goes out the window. For the Chinese and the communist party, everything and everything is fundamentally a political act. From basketball to business to culture and society, everything is controlled and centrally planned by the politicos making up the Chinese communist party. Which means you have to play by their rules if you want their business. Which means for the league, their long term success requires them to walk a fine line with the Chinese, which requires an extremely deft political touch. Something they don’t necessarily have to worry about in the US.
This also begs a larger question about cooperation with the Chinese regime and the implicit endorsement of letting them run roughshod over human rights. The NBA is hardly the only organization to do business in China. Why aren’t we more angry at Apple, or Microsoft, or any of the other multi-billion dollar organizations who do ten times as much business in China than the NBA? Why aren’t we angry at Trump for talking tough about China and then wetting his pants and self-owning himself at every turn? Why do we expect Lebron to act in any way other than self-interested. We as laypeople can’t even do it! I know how fucked up global warming is, but sometimes I throw plastic bottles in the trash because I don’t want to carry it. Nobody is perfect, least of all the American consumer.
You still have that iPhone which was made by suicidal Chinese wage slaves in a FoxConn factory somewhere. You still use Google which at one time was helping China build a Chinese-only search engine that could censor and compartmentalize and manipulate information at the communists parties will. You’re probably on Tik Tok which is just a shitty Vine ripoff created by the Chinese government to collect facial recognition data to train AI powered murderbots.
I guess the point here is that can we really expect Lebron and the NBA not to act self-interested when we ourselves are unable to do so at an infinitesimally smaller scale?