On October 4 2019 Daryl Morey, the Houston Rockets general manager, tweeted an image as he has done hundreds of times before. However, this particular tweet would shake the NBA to its core, highlighting the growing importance of the Chinese market.
The image in question included the slogan: “FIGHT FOR FREEDOM STAND WITH HONG KONG”. At the time China was dealing with widespread protest across the region after introducing a controversial bill that would have allowed them to extradite suspects into the Chinese criminal justice system. Although the plans were eventually dropped, unrest across Hong Kong continued for several weeks.
Following Morey’s tweet China cut all sponsorship ties with the Rockets. They did not stop there either. Several NBA events in Shanghai were cancelled, some just hours before they were due to start.
Eventually the issue was put to bed, with Morey apologising and the NBA releasing two separate statements, one of which read: “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.
“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.”
The episode showed how China is set to shape the future of the NBA. How exactly will this happen, though? We took a deeper look at the subject below.
Why the NBA Values China So Much
Aside from the United States, China is the NBA’s biggest market by some margin. Things started off slowly with the NBA sending video tapes for the Chinese state broadcaster to play free of charge back in the 1980s. Since then though, the expansion has been incredible.
USA Today estimated that China’s current deals are worth $500 million annually to the NBA. These include a multi-game contract with CCTV, which is currently suspended following the Morey controversy. The NBA recently signed a $1.5 billion five-year streaming contract with Tencent as well.
In addition, NBA China, an entirely separate arm of the league, was valued at a whopping $5 billion by Sports Business Journal back in 2019.
How This Could Change in the Future
The NBA’s Chinese bubble shows no signs of bursting anytime soon. The revenue streams are diverse and things will only escalate as basketball’s popularity continues to soar in the country.
At the time of writing NBA betting is not permitted in China. This means that gambling is one of the only areas in which basketball in the country does not have room to grow. The situation is very different in the United States, though.
The 2020s will see more states than ever before able to bet on the best basketball league in the world. The trend shows no signs of halting either. There are several states currently debating bills that would legalise sports betting in some form.
Online betting is a particular area of excitement with hundreds of digital sportsbooks popping up around the US in recent times. Unfortunately, the situation is unlikely to change in China anytime soon. Luckily, there are a lot of other areas for NBA’s growth.
After a brief downturn in merchandise sales following the Morey incident, NBA fans in China are set to return to buying products in their droves over the next few years.
The league is taking measures to facilitate this growth as well, taking part in the China International Consumer Products Expo in 2021. From jerseys, to tracksuits, to video games, the NBA sells its products extraordinarily well in China.
In fact, the largest NBA store on the planet is located in Guangzhou, while the eCommerce industry is worth billions of dollars.
Chinese sponsorship in the NBA is similarly set to expand in the future. This sponsorship will take several forms as well. Franchises will continue to strike partnerships with teams but Gideon Clark, business director US at sports digital consultancy and agency Mailman, is also predicting an increase in companies targeting player-only deals.
There have already been early signs of these innovations. Branded content has already begun to pop up with fast food outlet Dicos launching a campaign to promote their fried chicken which drew heavily on six NBA stars. This was devised to entice basketball fans to eat at their restaurants.
Expect plenty more of marketing and sponsorship endeavors like this one in the years to come.
Despite reports of breakthrough in March, CCTV has not yet reached an agreement with the NBA over broadcasting rights in China. However, this is likely to change before the start of the 2021/2022 season.
This will see the return and possible expansion of the current financial agreement, which is estimated to be worth hundreds of millions of dollars.
Thanks mainly to the incredible impact of Houston Rockets star Yao Ming in the 2000s, it is estimated that 300 million people now play basketball in China.
With such a large player pool it is only a matter of time until Chinese players start to come over to play in the NBA. The league could also stage games in the country. Overseas matches are nothing new with London enjoying several NBA contests in recent times.