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ESPN on Joe Tsai: the personification of the compromises the NBA makes on China

Indiana Pacers v Brooklyn Nets Photo by Mike Stobe/Getty Images

Joe Tsai is a true believer in how the Chinese government, meaning the Communist Party, has brought the People’s Republic into the 21st century. He does not mouth praise for China’s accomplishments because he wants to protect his investment in Alibaba. He believes in those accomplishments and he has, over the years, said so. It’s no secret, no mystery.

He sees moving 800 million people out of poverty in a generation as something worthy of praise, a human rights success in itself. He says — and US intelligence agrees — that the great majority of the Chinese populace believe in the party’s accomplishments as well. (That may be changing somewhat as a result of president Xi Jinping’s hardline policies on COVID but not by any significant measure.)

Thursday, ESPN published and broadcast an extensive report on the conundrum that is Joe Tsai. In the U.S., there are few sports team owners who’ve committed as much to social justice as he — and his U.S.-born wife Clara Wu Tsai — have.

When the NBA announced after George Floyd murder and protests that each of its owners was committing $10 million to social justice programs, Joe and Clara Wu Tsai went a big step further, establishing a $50 million Social Justice Fund for Brooklyn. They opened the Barclays Center plaza to protests and in general supported the Brooklyn and New York communities whether by opening the arena to food pantries, supplying 2,000 ventilators to area hospitals in the opening days of the pandemic or sending $50,000 to the victims of the 36th Street Subway shooting, as they did Tuesday,

But, ESPN reports, social justice and traditional human rights in China are not among his priorities. Tsai, authors Mark Fainaru-Wada and Steve Fainaru write, is “the face of NBA’s uneasy China relationship” which they noted also includes ESPN.

Tsai personifies the compromises embedded in the NBA-China relationship, which brings in billions of dollars but requires the league to do business with an authoritarian government and look past the kind of social justice issues it is fighting at home.

In the United States, Tsai donates hundreds of millions of dollars to combat racism and discrimination. In China, Alibaba, under Tsai’s leadership, partners with companies blacklisted by the U.S. government for supporting a “campaign of repression, mass arbitrary detention and high-tech surveillance” through state-of-the-art racial profiling.

The report’s two big pieces of news relate to those companies, in which Alibaba, the e-commerce giant Tsai co-founded, owns big stakes, and a claim that Tsai tried to get Daryl Morey fired after his pro-Hong Kong democracy tweet. The NBA and the Nets deny that claim.

The two Chinese companies, Megvii and SenseTime, are Alibaba-funded artificial intelligence companies that the Trump Administration sanctioned for their roles in fostering a surveillance state in Xingjiang, the mostly Muslim northwest province of China where as many as a million ethnic Uighurs have been interned and subjected to forced “re-education.”

Fainaru-Wada and Fainaru explain Megvii and SenseTime’s role this way:

The companies promote tools for businesses and the public sector, but their facial recognition technologies have surfaced in connection with China’s ubiquitous surveillance network.

Surveillance is at the core of China’s efforts to control the Uyghur population, a policy the government says is necessary to stop terrorism and maintain stability.

Citing Chinese documents and government reports, [Strategy Risks] the research group [used by ESPN] said Megvii worked in cooperation with security services, including one instance in which its facial recognition software was used to trigger a “Uyghur alarm” that could be sent to police.

Although Tsai declined to talk with the brothers for the story, they note that Alibaba’s investment came before the U.S. sanctioned Megvii and SenseTime and that Alibaba took measures to isolate itself from the investments.

The company made sure it did not hold board seats in the two companies, was not directly involved in operations and was reassured by company executives that they weren’t targeting Uyghurs.

The ESPN report also noted that other Americans have invested in the two companies. All of this, of course, came before Tsai became the Nets principal owner.

Tsai has been one of the leading proponents of A.I. in China, not just in the two sanctioned companies. He’s been publicly pushing Alibaba on the technology for years. And there have been other instances where Alibaba has been involved in what human rights advocates see as aiding the surveillance state that is China. Early in the pandemic, Alipay, a sister company of Alibaba, developed an app for the Chinese government to help Beijing track those they viewed most at risk and limit their access to travel — including mass transit — if necessary.

While Fainaru-Wada and Fainaru write they could not find any comments by Tsai on the Uighur issue, they note more general statements by Tsai in an interview with CNBC last year and at a forum in 2019 where he placed economic achievement above traditional — and what Chinese might see as western — measures of human rights. He offered no caveats.

“It is what it is,” he said at the forum in San Diego. “The fact is, China today is a single-party system so there’s going to be restrictions on academic freedoms and freedom of expression. I mean, do people like that? I think most people don’t like it, but I think that’s how the Communist Party needs to control that in order to feel confident about pushing their policies in other areas.

“The single-party system is in place because the elite in China feel that China is still a developing country, and I talked about two broader goals: to make sure that the population is wealthier and doing better and also to restore this sense of renaissance and pride about Chinese culture. They feel that dissent has to take a backseat and whatever they’re doing is right.”

In the CNBC interview, Tsai noted the popularity of China’s policies among its own population, again because of improvements in their lives.

“You have to be specific on what human rights abuse you’re talking about because the China that I see, the large number of the population — I’m talking about 80-90% of the population — are very, very happy for the fact that their lives are improving every year.”

The other issue is oft-reported controversy over Morey’s tweet in October 2019, which led to the cancellation of NBA games on CCTV-5, Chinese sports television (which only ended a few weeks ago.) The brothers provide a new twist, claiming that Tsai not only authored a Facebook post trying to explain why China was so angry, but tried to get Morey, then Rockets GM, fired. Fainaru-Wada and Fainaru quote a White House National Security Council official and long-time critic of Chinese human rights. The controversy reached the Trump White House, they write.

Morey heard directly from at least one NBA owner that Tsai was pushing to fire him to appease the Chinese. Turpin volunteered to help Morey and quickly became convinced that the Rockets’ general manager was fighting not only the Chinese government but also Tsai.

“My impression of Joe Tsai’s role in this was that it was extremely unhelpful,” Turpin said. “He was laying out to the other owners how completely unacceptable it was that anyone weigh in on Hong Kong. It colored the way the rest of the league lined up against Daryl.”

Morey was not fired and a year later, moved to the Sixers. The Nets strongly denied that Tsai intervened as did the NBA. Morey has never publicly accused Tsai of trying to dump him.

There is a lot more about Tsai — and other NBA owners’ — complicated relationship with China and the Communist Party in the ESPN story and video but the bottom line is that Tsai has never tried to hide his positions. Although Taiwanese by birth, Canadian and Hong Kongese by citizenship and American by education, Tsai sees himself as Chinese and sees his role at Alibaba as developing the world’s largest middle class. You accept it or you don’t. As Tsai said, “it is what it is.”