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Joe Tsai: ‘There’s a difference of opinion among owners’ on return-to-play

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RISE Conference 2017 Photo by studioEAST/Getty Images

As part of a virtual seminar Wednesday sponsored by Stanford’s Entrepreneurial Thought Leaders, Joe Tsai hinted at a divide among NBA owners on a return-to-play this season. Although noting that he’s “kind of under a gag order,” Tsai suggested to Stanford’s Tom Byers that owners of contending teams may be more enthusiastic about getting back on the court than those whose teams are near the bottom of the standings.

“The reality is everybody is still trying to figure things out with the hope that maybe we can reopen the season —the current season— because ... think about this: the Los Angeles Lakers or the Milwaukee Bucks, they’re in first place when the season got suspended. There’s a chance of them going for the championship. Of course, they want to play. The players want to play. The ownership wants to play.

“Then, there are other teams, if you’re in 28th place, maybe this season isn’t that important. So there’s a difference of opinion among the owners as well.”

Tsai, commenting on Dr. Anthony Fauci’s remarks that some leagues may have to skip this season, echoed Adam Silver that it’s about data, not setting a date for return.

“But I think that what Adam Silver, the commissioner, is focused on is that No. 1 making sure that all the players and everyone associated with the NBA are safe if we do re-open and and the safety question, you have to rely on data. I think Adam has said, ‘look, we’re not looking at a date. Setting a target date doesn’t make any sense. Look at the data.

“To Dr. Fauci’s point, you have to have enough tests.”

Tsai did not say where the Nets stood on a return. Brooklyn would be the seventh seed in the East if the NBA jumped directly to the playoffs on return.

“We’re one individual team but we’re also part of the league, so I’m kind of under a gag order as to what I really think about what the NBA should do.”

Tsai also spoke about the economic and emotional calculus that went into buying the Nets and Barclays Center (at a total of cost of $3.4 billion) last summer. Both played a role, he told Byers.

“When the opportunity to buy the Nets came up, I was originally very skeptical because it’s a big undertaking. There’s a lot of capital investment. But the more I looked into it, I thought the idea of a professional sports league, particularly the NBA, became an interesting economic proposition.”

He also said that the NBA’s revenue-sharing and collective bargaining agreement gave him encouragement. He also likes the idea that the players are partners in the economic well-being of the league.

“So you can’t treat players as employees. They’re your business partners.

“They’re very good business people. They’re smart and they wouldn’t get to this kind of stardom if they weren’t smart ... and their represented by some really good business people. So you have to approach this relationship as a partnership.”

But economics was only one aspect of the Nets attractiveness, Tsai said. The Taiwan native had gone to high school in Lawrenceville outside Trenton, then to college and law school at Yale in nearby New Haven. He also admitted that as a youth in New Jersey, he didn’t root for the state’s home team.

“[T]he emotional part is that this is the Brooklyn Nets! It’s New York City! I grew up actually not being a Nets fan. I actually grew up as a Sixers fan because my high school was in New Jersey near Philly. I was a big Dr. J fan.

“The chance to own an NBA team— there are only 30 of them— and an NBA team in New York City, it’s an opportunity of a lifetime. If you have the resources to do it, why not?!”

“It’s all about personal relationships and it’s all about making deals. Media deals, sponsorship deals and things like that.”

Still, he noted that while Alibaba, the giant Chinese e-commerce company he co-founded, is vastly different from an NBA team, there are similarities ... starting with a corporate culture.

“You have to make sure that not only do Your employees show up because there’s a paycheck, but because they show up because they love the culture of the company, they understand very clearly what ownership is about and you have to very clearly communicate those values to your employees. And either they agree with you or they don’t and those that don’t slowly drop off but then you end up with a good core group of passionate people.”

Tsai spoke as well about the effect the coronavirus has had him on him personally. He noted that he’s currently under quarantine at his home in Hong Kong and will be through the end of this week. Even though he tested negative for the virus at Hong Kong’s airport, he still needed to self-quarantine for two weeks.

“So I came back to Hong Kong. I was in the States. I came back from California on Monday. So the rule is that anyone visiting Hong Kong from a foreign country has to quarantine themselves for 14 days. So I am now literally under quarantine sitting in my study.”

Tsai showed Byers his “bracelet” that local authorities use to track his movements.

“Literally, if I step out of the house, someone from the health department will call me. They don’t kid around. This is the level of diligence you have to maintain to really contain the virus.”

Alipay, a sister company of Alibaba, developed an app for the Chinese government to help Beijing track those most at risk ... and limiting their access to travel if necessary.

While at home last week, Tsai said he made a couple of discoveries.

“I’ve had a really great time spending time with my family with my wife and kids. ANd I realized it’s great! It’s been a terrific experience just being with them and being able to sit down at home and have dinner every night. So what I would like to do going forward to re=balance my life a little bit and try to see my kids more.”

He also said that once things settle, he’ll be paying more attention to the finances of his teams.

“[N]ot just with the Brooklyn Nets, we also own the New York Liberty. I own an indoor lacrosse team called the San Diego Seals in San Diego, spending more time really digging into the business of sports because I’m fanatical about sports but the business side is fascinating as well. So i’d like to spend some more time there.”

Ten days ago, Variety reported that the Nets had dumped their chief financial officer, Eu-Gene Sung. The team has declined comment on news of the departure.

Finally, Tsai discussed undertaking two shipments of ventilators and PPE from Shanghai to New York a month ago. Tsai and his wife, Clara Wu Tsai have sent about $10 million in equipment and masks intially to hospitals in New York and New Jersey,. Since then, they’ve donated more equipment to the cities of San Diego and Detroit.

“It’s something my wife and i feel very strongly about and New York City is one of the hardest hit cities and we were talking to doctors and hospitals and just our friends who live in New York and we felt we were uniquely positioned to help because access to PPE from Chinese manufacturers was actually something that not everybody has and through the Alibaba relationship —and I want to thank (co-founder) Jack Ma, him personally. He was able to help source the supplies— and we were able to bring the shipments in.

“It was done not without a lot of sort of red tape on both sides. It took a lot of effort to export the stuff out of China but also import them because of everything with medical supplies has to be FDA approved. But we did it an we’re very glad to have the opportunity to help. “