NBA loses big in rift with China

CHICAGO • National Basketball Association (NBA) commissioner Adam Silver said on Saturday that the league will likely lose "hundreds of millions of dollars" because of a rift with the Chinese government that has affected sponsorship and television revenue but that he believed there would "be a return to normalcy fairly soon".

The comments came during a news conference on the sideline of the All-Star Weekend.

Silver also announced that the All-Star game's MVP award would be named after Kobe Bryant, the former Los Angeles Lakers superstar who died last month in a helicopter crash.

Silver's labelling of the business harm to the NBA from its tension with China as "substantial" was noteworthy because it put in concrete terms how much the league's relationship with China, cultivated going back to the 1970s, has meant for its bottom line.

"I think that the magnitude of the loss will be in the hundreds of millions of dollars. Certainly, probably less than US$400 million (S$556.7 million), maybe even less than that," he said.

The Chinese government shut the NBA out in October, after Daryl Morey, general manager of the Houston Rockets, shared an image on Twitter that was supportive of the pro-democracy protesters in Hong Kong. The backlash was immediate, as Chinese sponsors began cutting ties with the league and CCTV, the state-run television broadcaster, refused to air any more games.

The league's many streams of revenue include broadcasting rights, merchandise sales and admissions.

The NBA takes in roughly US$9.5 billion in annual revenues, according to a source with knowledge, who was not publicly authorised to discuss the matter.

Silver said that the NBA's overall financial health was sound, even though its games are not on the air in China, which has hundreds of millions of fans. He believed CCTV would resume airing games "at some point in the future".

 
 

Tencent, a streaming network, has been showing an average of three games a night.

The league has lowered its salary cap projections for next season in part because of the China fallout, Silver said, but the full magnitude of the loss will not be known until after the play-offs.

The salary cap, which sets the limit for how much teams can spend on players, is determined by the amount of money the NBA takes in year to year.

"I don't have any sense that there's any permanent damage to our business there, and as I've said before, we accept the consequences of our system and our values," Silver said. "It's not a position any business wants to be in, but those are the results."

NYTIMES

A version of this article appeared in the print edition of The Straits Times on February 17, 2020, with the headline 'NBA loses big in rift with China'. Print Edition | Subscribe