Fallout From NBA’s China Incident Could Cost Hundreds of Millions of Dollars
NBA Commissioner Adam Silver revealed the conflict between China and the NBA over a tweet sent by Houston Rockets general manager Daryl Morey could end up costing the league as much as $400 million once the dust settles.
Already responsible for a small dip in the 2020-21 season's cap estimates, the losses could have a significant impact on league plans and operations, and the recent coronavirus outbreak -- which originated in China and hitting that country hardest -- is complicating the already-delicate situation further.
Silver related the financial impact at the 2020 NBA All-Star Games in Chicago on Feb. 15th, saying (via USA Today's Mark Medina), "I think that the magnitude of the loss will be in the hundreds of millions of dollars ... Certainly, probably less than $400 million, maybe even less than that."
"It's substantial. I don't want to run from that," he added.
The fallout of Morey's fateful tweet began almost immediately after his message of support for democracy in Hong Kong, with broadcast network Tencent declining to show Houston Rockets games as well as the entire NBA preseason, and state-run television network CCTV declining to air Los Angeles Lakers and Brooklyn Nets games, and has not run any NBA games since.
Several Chinese companies also canceled contracts with the NBA or their players before the conflict died down, but Silver believes things may return to normal soon.
"My sense is that there will be a return to normalcy fairly soon, but I can’t say exactly when it comes to CCTV ... We are not pressing them. It’s a decision that’s outside of certainly our control, and I will say I’m often not even sure exactly where that decision lies. I think that our view as the league is we should continue doing the things that we’ve done in the past."
The true impact in dollars and sense may be months or even years away from being known to the league, but the incident continues to affect the long- and short-term planning of the NBA's ambitious global expansion plans, particularly the network of seven developmental academies -- three of which are based in China.
Whether the league chooses to walk back the degree of involvement of China in its plans remains to be seen, as does whether China wishes to step back from it's fairly involved partnership with the league. But one thing is certain in the wake of the Morey-China incident -- there's an elephant in the room that's going to need addressing for both parties to move forward in regards to basketball.