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Joe Tsai hopeful NBA games will return to Chinese TV soon

Philadelphia 76ers v Brooklyn Nets Photo by Matteo Marchi/Getty Images

In an extensive profile in Bloomberg Business Week, Joe Tsai recounts the controversy —and consequences — surrounding Rocket GM Daryl Morey’s tweet last October that urged his Twitter followers to stand with Hong Kong.

Tsai has spoken recently about his role, as the NBA’s only Chinese owner, in fixing the broken ties between the People’s Republic and the NBA, he hasn’t provided many details. The talks, obviously, are very delicate and difficult.

In talking with Bloomberg’s Ian Boudway, Tsai notes that getting NBA games back on CCTV-5, the Chinese government owned version of ESPN, is critical. TenCent, the company that holds the NBA’s streaming rights, is back airing games, but CCTV has refused to relent on its boycott.

“Once you are on the air,” Tsai said, “everything will come back.”

And a “person familiar with the matter” told Bouway that the league is optimistic the network will begin airing games again, starting with the All-Star Game on February 16.

That of course would be a big deal for the league which says 800 million Chinese watched NBA programming last year. The league fears a downturn in revenue from China could threaten its overall financial health, on which player salaries, among other things, depends.

Tsai spoke as well about his role in the controversy. Morey’s tweet led to protests around the People’s Republic and threatened the NBA China Games which had his Nets face the Lakers. So Tsai decided to pen a note to fans trying to explain why the tweet was so offensive, so ignorant, contending the Hong Kong protests were an affront to China’s sacred one-China policy. He felt he had to get involved.

“I was sitting there thinking, I’m uniquely positioned to say something. It would be weird if I didn’t say something,” Tsai recalled thinking as the controversy grew. “I am the only owner that’s Chinese. I do business in China. I live in Hong Kong. I’m sort of in the middle of this.”

Tsai, of course is the executive vice-president of Alibaba, the Chinese e-commerce giant, making his position very sensitive. In addition, as Boudway writes, Tsai was born in Taiwan to a family that fled China to avoid the 1949 Communist takeover of the mainland.

Tsai said he sent the Facebook post to the league as a courtesy, but Adam Silver says he didn’t approve it, didn’t see it till it was published. Immediately, a new controversy erupted as many accused Tsai, who needs a level of government support in running Alibaba, of hewing the Communist Party line. Tsai tells Boudway that he doesn’t regret the post and asks that those who criticize him study the history and the current state of affairs in the city.

“I believe that there are strains of separatism, because they don’t want to have anything to do with China,” Tsai told Boudway in defense of his letter. “They are very anti-China, burning the Chinese flag, beating up people who speak Mandarin, vandalizing Chinese-owned shops.”

In his opinion, they’ve since morphed into a violent attempt to undermine the “one country” policy ... that is at the core of President Xi Jinping’s increasingly nationalism positions. “People should think very seriously about saying that it’s not a separatist movement,” he said. “I think they should look at the facts.”

Ironically, one of the protest leaders is now at Yale, Tsai’s alma mater, getting a master’s degree in East Asian studies, a program Tsai has lavishly funded. Law remains critical of the Facebook posting and Tsai’s general position on Hong Kong.

“This is not a separatist movement,” says Nathan Law, who’s now studying for a master’s degree in East Asian studies at Yale. “Supporting Hong Kong doesn’t mean that you are completely anti-China or that you want China to be split.” Boudway quotes Law as saying Tsai either misunderstood this or deliberately adopted the Chinese government’s rhetoric.

Whenever the controversy ends, the question is whether the Nets, with their Chinese owner, will supplant the Rockets as China’s team, a position Houston held from the time they drafted Yao Ming in 2002 till last fall’s controversy. Tsai doesn’t think it’s a big deal. Most of the China revenue, along with most NBA revenue in general, is shared by all 30 teams.

“If the Nets are very well-known in China, maybe we will get a little bit more sponsorship revenue, maybe some Chinese company will have signs here instead of Qatar Airways,” he told Boudway, pointing to ads ringing the rafters at Barclays. “But that doesn’t really move the needle. What’s important is if the NBA is very popular in China.”

Tsai didn’t talk much about the Nets season other than to recount how he wound up buying the Nets as well as the Liberty. Boudway does note that Tsai’s role with the NBA extends beyond China and Asia in general. He is now a member of the league’s media committee, which advises Silver on rights deals and digital plans.

“It was a no-brainer,” said Silver, noting his pioneering role in digital marketing and sales. Silver recall how not long after he met Tsai, the soon-to-be Nets owner pulled out his smartphone to play NBA highlights on Alibaba’s streaming service. “He demonstrated how you could click on a highlight and buy the shoes.”