Sitting here in Hong Kong, I'd like to applaud the NBA for taking at least a somewhat principled stand on China's attempts to censor the league. They got there in the end.
Of course, I'd particularly like to doff my China-made counterfeit NBA cap to Daryl Morey, general manager of the Houston Rockets, whose Twitter post tipped this whole thing off: "Fight for Freedom. Stand with Hong Kong." Morey's quickly deleted post repeats a common chant at Hong Kong pro-democracy demonstrations.
NBA Commissioner Adam Silver tells us that the NBA was asked by China to fire Morey. It did not. "We said there's no chance that's happening," Silver said. "There's no chance we'll even discipline him."
China denies that it ever asked for Morey's scalp. But the NBA, which at first apologized for Morey's post, now supports his free speech. Unlike, well, just about every other sports league, the NBA appears to be quite OK with having outspoken athletes -- and, apparently, executives.
Good for the NBA for refusing to play ball and curb its free-wheeling nature. It takes that stance at some cost. The league launched its NBA China business in 2008 and says it's now worth US$4 billion.
The NBA signed a 10-year deal with Tencent Holdings (TCEHY) in 2015 to show NBA games and other content online. That deal is expected to net the NBA US$800 million. Tencent temporarily put on hold the airing of games, but appears set to resume without Rockets games. Chinese national broadcaster CCTV also pulled NBA games and hasn't yet said what it will do next.
The NBA is standing firm and waiting to see what kind of pressure China continues to exert. The interesting thing about this situation is that China will soon find itself under pressure the longer it boxes out the NBA. I wonder how long the broadcast benching will last.
NBA enjoys clout
The league says roughly 500 million Chinese viewers watched at least one NBA game last season. There are 300 million active basketball players in China. Although there's a domestic professional basketball league in China, there's no way of duplicating the allure or star power of the real deal.
Just how many angry young men and women does China want on its hands? Will apolitical youngsters take it sitting down when they can't watch the Golden State Warriors and the Rockets, the two most-popular teams, on the screen this season? Angry young people on the streets in Hong Kong are exactly what got us here in the first place.
The NBA has the product and the clout, as a team-owned league that operates as a monopoly, to stand firm.
We should ask, though, since when do you risk getting fired just for expressing a sentiment on a personal issue?
If you work for Hong Kong flagship airline Cathay Pacific (CPCAY) , you do. Cathay Pacific has fired staffers who have taken part in this summer's demonstrations without them being convicted of anything. Indeed, it has even fired staffers who merely posted sympathetic material on their own personal social media sites on their own time.
I'm waiting for wrongful dismissal lawsuits on that one. Hong Kong has freedom of speech and assembly written into its Basic Law constitution. Unless you're convicted of a crime, you've been fired for exerting those rights.
Others knuckle under
Yet this "white terror" technique of suppressing dissent well beyond China's borders, by making employees second-guess if they can get fired for expressing themselves, is working very well.
Goodness knows the number of listed, very for-profit companies that have buckled to Chinese pressure. Apple Inc. (AAPL) removes apps from its store in China such as VPNs, used by net-savvy Chinese to surf an unfiltered Internet, that it would never censor in the United States. (Apple is a holding of Jim Cramer's Action Alerts PLUS charitable trust.)
It went back and forth, then killed an app in Hong Kong that tracks demonstrations and could be used to track the police.
I can't even use the Taiwanese flag emoji on my iPhone here in Hong Kong anymore. It's gone.
Most companies attempt to justify censorship or compliance with the authoritarian Chinese regime, which requires all digital data to be stored onshore for "security" purposes, with the logic that they are just cooperating with local laws.
What, though, if those laws are wrong?
Apple has a Uganda-specific store. Yes, really. Meanwhile, Ugandan members of parliament are fighting to reintroduce a bill, thankfully ruled unconstitutional in 2014, that would make homosexual acts punishable with the death penalty.
Will Apple comply, should this terrible order pass, with a demand from the Ugandan government to report anyone using a rainbow emoji?
Apple also has an online store and authorized resellers in Saudi Arabia. Yet consensual same-sex conduct is punishable by death (if you're a married man or consorting with another faith) or by flogging (if you're an unmarried man). Cyber relationships fall afoul of a law that criminalizes online activity impinging on "public order, religious values, public morals, and privacy."
A gay man in Saudi Arabia was in 2014 sentenced to three years in jail and 450 lashes after he was caught using Twitter to set up dates with other men.
The man was set up and arrested by security forces on a fake date. He then admitted to the use of his phone. But according to local law, Internet companies and hardware makers could be at risk of profit blackmail to hand over this sort of data.
Apple fought tooth and nail in the United States not to hand over its source code during the investigation of the San Bernardino shootings. Apple said at the time it had also resisted Chinese demands for two years to hand over the code.
It also says that it does not provide identity data of users to its Chinese partner Tencent Holdings. The iPhone maker uses Tencent instead of Google to block "malicious" websites in China because Google is banned.
How long will Apple hold these positions as the Chinese government becomes more and more authoritarian? The Hong Kong government is already said to be debating selective blackouts of the Internet, or blocking popular apps such as the chat group operator LIHKG and secure chat network Telegram.
LeBron's Hong Kong misstep
Morey's move may not have been very wise, but it's very welcome in Hong Kong.
Basketball fans here are burning their LeBron James jerseys and stomping on images of his face. The Nike (NKE) athlete, who has frequently visited China for promotional appearances, said Morey "wasn't educated on the situation at hand" and that "so many people could have been harmed, not only financially, but physically, emotionally, spiritually."
He probably could have stopped at financially. I think that's what LeBron means. I don't know enough about the Lakers star's education on Chinese history and the politics of Hong Kong to judge. To be fair, he said he hadn't been keeping up with the Hong Kong news. But I suspect the comments are coming from his wallet more than his heart. The hashtag #hongkonglivesmatter has become a popular one here.
DreamWorks Animation is the latest to acquiesce to the Chinese world view, as has much of Hollywood. The release of the movie Abominable, noteworthy for featuring a Chinese girl as the lead character and mainly voiced by an Asian cast, has been pulled from theaters in Vietnam since a scene briefly shows a map of China that includes the controversial "Nine-Dash Line."
This ridiculous claim of a line gives China ownership of essentially all of the South China Sea, which is called the East Sea in Vietnam. China's claim, which dates back to pre-Communist days, uses the justification that Chinese fishermen have long sailed as far south as the Philippines and Malaysia.
Those two nations alongside Vietnam, Taiwan and Brunei all consider parts of the territory within the Nine Dashes as their own, and rightly so. Common sense will tell you much of this claim makes no geographical sense: The Chinese territory, thanks to the James Shoal that is 21 meters underwater, extends within just 24 nautical miles of the coast of Borneo, a point that is 1,100 miles south of the Chinese mainland.
Google parent Alphabet (GOOGL) was the last company to take an outspoken stance on curbing its business in order to do business in China. Having opened in China in 2000, it began refusing to censor searches in 2010, routing them beyond the Great Firewall of China to its Hong Kong site. It was then banned. (Alphabet also is a holding of the Action Alerts PLUS charitable trust.)
Would the company make the same call now? In 2018, it was reported to be working on a censored search engine for China, code name Dragonfly. The project got killed after internal blowback.
We live in a tough time for companies. These decisions, of profits vs. morals, shareholders vs. public opinion, irate Chinese consumers vs. irate Chinese NBA consumers, are not easy to make.
For now, the NBA has made the right one. A three-point shot for good.