The recent public relations dilemma faced by the National Basketball Association (NBA) after Houston Rockets General Manager Daryl Morey’s pro-democracy tweet, earlier in October, revealed the internal conflict currently experienced by the NBA as it transitions from a local to a global product. Basketball games, the epicenter of the show, at the end represents the tip of the iceberg of the business. Merchandizing, marketing, television and radio rights, public relations, and sponsorship deals represent the core of the business, and when globalized the profits skyrocket. In order to illustrate this, think of international football (soccer) and the expansion of the business throughout the Twentieth Century, moving from a British market to a European market, followed by its commercialization across the Americas, and soon after the world.
As the sport globalized during the second half of the Twentieth Century, competition among the national leagues generated intense market competition over the human talent, the global spectator, and the global consumer of merchandizing and advertising. By the 1990s, international business strategies implemented by the top European leagues, together with the introduction of deregulated structures, allowed this regional market to control the sport and by the end of the 2010s the struggle over the global market was left in the hands of the British, Italian, and Spanish leagues. Today, these leagues monopolize the sport with more global viewers and consumers of merchandize than in their own domestic markets. The Premier League is now broadcasted to 212 countries, 643 million homes, and a potential television audience of 4.7 billion viewers. The NBA, I believe, has a very similar vision for Basketball in the Twenty-First Century. Its domestic market strategy has reached a saturation point after its expansionist efforts, that included the Canadian market, and therefore has seen in the global expansion of the brand the solution to this business constrain.
All the competitive leagues that have emerged across the planet in the past twenty plus years are tightly connected directly or indirectly to the NBA, and the American association has slowly become a recruiter of top foreign talent. By the year 2017 it had absorbed a total of 113 foreign players into the national league, very distant from the locally-centered realities of the 1990s. Highly competitive leagues such as the EuroLeague, EuroCup, Spain’s Liga ACB, the Turkish Basketball Super League (BSL), Russia’s VTB United League, Italy’s Lega Basket Serie A (LBA), France’s LNB Pro A, the Greek Basket League, Germany’s Basketball Bundesliga (BBL), Australia’s National Basketball League (NBL), Israel’s Basketball Premier League, and the Chinese Basketball Association (CBA), have become recruiting grounds for the NBA while at the same time serving as a back-up plan for American players. The leagues compete against each other for the local and global consumer, but they have to face the overwhelming reality that the NBA is the dominating brand today. It is this reality that the NBA wants to capitalize on, and therefore the conflict over the tweet made by Mr. Morey.
Executives, players, fans, and even US politicians have expressed their support for Mr. Morey’s pro-Hong Kong tweet, defending ideas such as “freedom of speech” and “democracy.” The now deleted tweet, “fight for freedom, stand with Hong Kong,” would have had no significant impact decades back when the NBA was domestically centered, when China was an insignificant market for U.S. business interests, and when the world of basketball was not globalized. Things are different now, and perhaps the politicians, the fans, players, and even some executives have not understood that although China’s share of the NBA market is just 10 percent of total revenues, this market is growing and becoming more strategically relevant for the NBA.
Part of the reasons why professionals in the field of international business are constantly drilled about the importance of culture and product, culture and marketing, culture and public relations, and culture and branding is that the inability of an organization to effectively navigate a foreign market could potentially jeopardize the overall business relations and open up the door to other foreign competitors. Not recognizing, as a first mover in the Chinese market, that the current social protests in Hong Kong against the Communist Party is a delicate subject for that central government means that there is an internal disconnect inside the NBA and the NBA culture over the long-term global objectives of the organization.
It is clear that the American public does not need to be informed about this reality, at the end, part of the globalization strategy of companies is to keep its domestic market committed to the local brand while constructing a new brand for foreign markets. But the lack of awareness of executives such as Morey shows that the new vision is still not clear or has not been communicated effectively internally. Morey’s comment is particularly surprising, considering that he represents the Houston Rockets, the most popular NBA team across China thanks to Yao Ming’s career with the Texan team.
China’s share of the NBA market is expected to reach 20 percent of the overall revenues by 2030, and potentially continue to grow throughout the second half of this century. Merchandizing, marketing, television and radio rights, public relations, and sponsorship deals represent the core of the business in China. Although, at the present time, the NBA only plays exhibition games across China and definitely does not represent a ticket-sales market, “nearly 500 million people” watched NBA games during the last season, and the number is expected to grow; this compared to the 21 million viewers across North America that followed the 2019 season.
Like any other American company that has placed priority over the Chinese market, as in the case of Apple Computer, McDonald’s, Phillip Morris and KFC, the NBA has placed its bet on this market and will therefore make the necessary internal corrections in order to avoid future cultural navigation errors, and internally adjust its communication strategy to please the strategic stakeholders in that particular foreign market. This is the nature of international business; at the end, the goal is to please multiple global markets and not just your domestic market.
American NBA consumers will struggle to adjust to this changing reality, as they become a lesser priority to the organization. It will not be surprising to see other internal changes as the product globalizes and adjusts to the realities of the global market system. The inflow of foreign players will continue to increase and potentially challenge the current recruiting patterns. Fans will not care, at the end they want to see the best talent on the court, and if the talent is global then be it. For those that disagree with this prediction, just look at the team composition in the British Premier League; only 37 percent are English and the rest foreign; forty plus years ago this number was close to 100 percent. This is the current reality of a league that has been going through the process of globalization for the past twenty plus years. Perhaps a similar future is awaiting the NBA, and the latest public relations incident a sign of the future to come. Ultimately the NBA is interested in making money and not defending democracy around the world.
 Fran Fraschilla, “Top 12 Basketball Leagues in the World Outside the NBA,” ABC News, January 17, 2017, https://www.google.com/search?q=top+basketball+leagues+iin+the+world+outside+the+nba&oq=top+basketball+leagues+iin+the+world+outside+the+nba&aqs=chrome..69i57j33.184124j0j4&sourceid=chrome&ie=UTF-8, accessed October 10, 2019.
 Chris Isidore, “The NBA faces a no-win situation in China. Here’s what it stands to lose,” NBC 2, October 8, 2019, https://www.nbc-2.com/story/41156621/how-one-tweet-put-the-nba-in-a-no-win-situation-in-china, accessed October 10, 2019.
 Ibid. For information on NBA viewership in the United States see, for example, “Average TV viewership of NBA Finals game in the United States from 2002 to 2019 (in millions),” Statista, https://www.statista.com/statistics/240377/nba-finals-tv-viewership-in-the-united-states/, accessed October 10, 2019.
 Luke Edwards, “Rise of number of English players in Premier League gives Gareth Southgate Timely Boost,” The Telegraph, August 12, 2019.