Why Politics Must be Left Out of Sports Sponsorship Agreements
What does a technology giant such as Apple have in common with the National Basketball Association? Aside from being business enterprises that generate vast amounts of revenue, both the NBA and Apple have found a very lucrative market in the People’s Republic of China. In the case of Apple, China is one of the strongest markets for iPhone sales; as for the NBA, millions of Chinese fans translate into millions of dollars in terms of broadcasting rights as well as sales of official merchandise.
The 2019 NBA preseason was partially played in China and other Asian countries. Major franchises loaded with NBA superstars traveled around the world not only to play games but also to be closer to fans in overseas markets. In terms of sponsorship agreements, China is seen as a choice target market for expansion, particularly for athletes. In the past, only tennis and soccer players were able to sign significant sponsorship and endorsement deals overseas; these days, however, NBA players have remunerative opportunities in China thanks to the sheer size of the market and the passion of Chinese fans.
Unfortunately for basketball fans and players, the NBA preseason in China ended up in controversy and financial loss because politics got in the way. Things turned sour right in the middle of the tour when Daryl Morey, general manager of the Houston Rockets, decided that this was a good time to express his opinion on the topic of the protracted Hong Kong protests. Morey’s support of pro-democracy activists in Hong Kong did not sit well with the Communist Party of China, which tried to pressure NBA commissioner Adam Silver to either rebuke or terminate Morey.
The NBA’s business ties with China are largely seen as being part of a mutually beneficial sponsorship, but they stopped being affable in the wake of the Morey affair. CCTV, the state Chinese broadcaster, cancelled national televised events of the preseason games. Statements of discontent were expressed by league officials, team owners, sports analysts, and even politicians. The matter was escalated to the point of prompting United States Vice President Mike Pence to join the fray and criticized the NBA for yielding to commercial interests to the detriment of free expression.
According to The Athletic, an online sports news publication that sent journalists to cover preseason games in Shenzhen and Shanghai, Kyle Kuzma of the Los Angeles Lakers was all set to announce a sponsorship deal in China, but the agreement had to be scrapped at the last minute because of the political climate. A meet-and-greet session between the Houston Rockets and Chinese fans was cancelled. While it is true that the NBA and franchise owners were impacted by this political fiasco, players and fans were more deeply affected.
In the end, the NBA China scandal is a stern reminder that politics and sports do not mix, and this extends to sponsorship agreements. Professional sports marketing should always strive to be friendly and good-natured, and this is not the nature of political discourse, which is often adversarial.