michael barbaro

From The New York Times, I’m Michael Barbaro. This is “The Daily.” Today: A seven-word tweet about Hong Kong sent by an N.B.A. executive triggered an international furor in both China and the United States. My colleague Jim Yardley on what the controversy reveals about the unspoken rules of doing business in China. It’s Friday, October 11. Jim, for those of us not steeped in the world of the N.B.A., tell me about Daryl Morey.

jim yardley

Well, Daryl Morey is the general manager of the Houston Rockets, so he runs the team. And he’s probably one of the more unlikely general managers you’re going to find in the N.B.A. Most of those guys are former players, or they have been in the past. He was a data nerd.

archived recording Computer scientist Daryl Morey is the sport’s foremost data and statistics guru among N.B.A. bosses. archived recording (daryl morey) You can break winning down into two things. One is how many points do you get —

jim yardley

He worked for a data firm, and the whole league was like, who is this guy? But he was kind of of an era. I mean, you probably remember Michael Lewis’s book “Moneyball,” and it was about Billy Beane and the Oakland A’s and how Billy Beane used data and analytics to reinvent baseball. And he also used it to save money. Well, Daryl Morey was the sort of “Moneyball” figure in basketball. In fact, they came up with the nickname “Moreyball.” So he kind of, in N.B.A. circles and in fan circles, he became kind of famous. And then, of course, he is really famous now because a few days ago, he looked out in the world, and he saw the protests in Hong Kong, and he decided to tweet.

michael barbaro

And what does Morey’s tweet say?

jim yardley

It says, “Fight for Freedom. Stand with Hong Kong.”

michael barbaro

So that sounds relatively innocuous.

jim yardley

I think in a certain context, absolutely. Many people are saying much stronger things. But not in this context. Almost immediately, it blew up all over the world.

archived recording The N.B.A. and its franchise Houston Rockets, they are in hot water in China.

jim yardley

He was swiftly criticized by the Chinese government. The owner of the Rockets, Tilman Fertitta, instantly recognized this was a big problem.

archived recording Owner Tilman Fertitta quickly stepped in, saying Morey does not speak for the Rockets. We are not a political organization.

jim yardley

I mean, this was a mounting disaster for the N.B.A.

michael barbaro

And Jim, why would that be exactly? Why would China, or really anyone, care about the online musings of a general manager of an N.B.A. team about Hong Kong?

jim yardley

Well, what people don’t know, or most people don’t know, is the N.B.A. is a major player, if you will, in China, and has been. It’s one of the biggest foreign brands in China. In America, I grew up in North Carolina, and basketball is everything there. And we think of basketball as something that belongs to the United States. It’s like part of us, in a way. I mean, it’s organic with our character. But actually, the game itself was invented by Y.M.C.A. missionaries. And they wanted to have a game to play indoors in the growing cities of America. Then in a couple of years, the missionaries took this all over the world, and they took it to China.

michael barbaro

What year is this, roughly?

jim yardley

It landed there in the late 1800s and began to take root in the early 20th century, really quite an interesting time in China because China had just kind of ended the century of humiliation, a century when they were surpassed by the West. And these Y.M.C.A. missionaries came in, trying to, A, convert Chinese to become Christians, and then, B, help China pick itself up. And they said, look, to be a strong country, you need strong bodies. You need to be strong people. And so they introduced basketball. And what changed, of course, was Mao.

archived recording Virtually all China, with its vast population of between 400 and 500 million people, is now under Communist control. Mao Zedong and his government rule China.

jim yardley

1949, he took over, and he got rid of almost everything, but he kept basketball.

michael barbaro

Hmm.

jim yardley

Yeah, it was a favorite sport of the generals of the Red Army. They liked to play basketball, and they did it for decades. And then finally, Mao died, and it looked like the whole Chinese Communist regime would collapse, but instead —

archived recording Mao’s death will mean changes in China, but peaceful changes.

jim yardley

A new leader, Deng Xiaoping, came in, and he opened China to the world.

archived recording The American president and the Chinese vice premier signed two agreements, the first on cultural exchanges.

jim yardley

And that turned out to be what gave life to basketball in China.

michael barbaro

How’s that?

jim yardley

Well, you suddenly had these people who loved the sport but had never really seen it played anywhere else. And in 1987, David Stern arrived in Beijing. Now, David Stern was the longtime commissioner of the N.B.A. And David Stern, probably more than most, recognized globalization. He saw that entertainment, that basketball, was something that could be commodified, and it could cross borders through television. Stern cut a deal with the Chinese authorities where they would mail, I think once a week, an eight-track tape of N.B.A. highlights.

archived recording Good move inside by Worthy. He went around Wilkins in one of the best moves in this game.

jim yardley

Then the eight-track tape would be scrutinized and censored if it needed to be. It would be played on state television.

michael barbaro

Wow.

jim yardley

Yeah. And so suddenly they have N.B.A. highlights.

archived recording (speaker 1) Look at that pass! It’s to Laimbeer. archived recording (speaker 2) Yeah-ah.

jim yardley

And then by 1990, they kept opening up China. They kept opening up, and they wanted to be more modern. So they signed a TV deal with the N.B.A. And anyone who knows basketball knows that by about 1990, you had the era of Larry Bird, Magic Johnson, but most of all, you had the era of Michael Jordan.

archived recording A look away to Levingston. Jordan. Oh! A spectacular move by Michael Jordan. That’s 13 consecutive field goals —

jim yardley

And when I used to live in China, and I traveled around the country with actually a pro basketball team.

michael barbaro

Wait, I’m sorry. You traveled around China with a pro basketball team?

jim yardley

Oh, yeah. Yeah, I did actually. I lived in the Shanxi province. I lived in coal country, and I lived with a team, a pro team, called the Shanxi Brave Dragons. And the owner was a former coal operator who made millions in privatization and was obsessed with basketball. And he used to watch a little black and white screen and would see Jordan.

archived recording Oh! A spectacular move by Michael Jordan.

jim yardley

And he thought he’d never seen a man he thought could fly. He thought it was amazing.

archived recording Yo! This is Mars Blackmon, and this is my main man, Michael Jordan, and this is a pair of tight Air Jordans from Nike.

jim yardley

And at the same time as Michael Jordan era of the N.B.A., we were also having the Nike era.

archived recording With these thumping sneakers. Do you understand? New Air Jordans from Nike are here.

jim yardley

The arrival of the big brands. So if you’re a fan sitting out there, and you’ve never seen American basketball, you watch the game, and then soon, or fairly soon, you began to see the Nike commercials. And Jordan was actually flying in the Nike commercials.

archived recording Who says man was not meant to fly? Air Jordan.

jim yardley

For many people, the commercials were as intoxicating as the games. I mean, this was like a whole new world of entertainment that they’d never seen before. And slowly, the N.B.A., even then, saw this is going to be a big place for us. Thanks to those Y.M.C.A. missionaries, the audience was already there. They were just waiting for the best product, and the N.B.A. was there to deliver the best product.

michael barbaro

So it sounds like for many Chinese, their introduction to the United States was through basketball, through our most famous players. That’s what America was to them.

jim yardley

This was something that you could watch. It seemingly didn’t have any politics attached to it. It was pure fun, pure entertainment, and the players were personalities.

archived recording (speaker 1) He’s been called outrageous. archived recording (speaker 2) He is unbelievable. archived recording (speaker 1) He’s Charles Barkley, but you better call him Sir Charles. archived recording 1 And now entering Burger King, six-time forward, number 32, Mr. Dependable, The Mailman, Karl Malone. archived recording 2 Who is the man that can jam over any man? archived recording 3 Shaq! archived recording 4 Can you dig it?

jim yardley

You know, that was something that, in the context of watching American leagues, Chinese newspapers began to write about the players and their personalities and their personal style, their individualism. And I think that was all very appealing for a country that was sort of coming into its own, was opening up to the world. And of course, where everything really changed, though, was in 2002.

archived recording With the first pick in the 2002 N.B.A. draft, the Houston Rockets select Yao Ming from Shanghai, China.

jim yardley

The Houston Rockets used the first pick in the N.B.A. draft to pick Yao Ming. Yao Ming was the greatest player China has ever produced, and certainly one of the biggest players to ever play. I think he’s 7’5“. I met him once, and I shook his hand, and my hand just disappeared. He is such a huge guy. But suddenly, Yao Ming is the first pick.

archived recording All Yao early in this one. Later in the first quarter, Shaq spinning, blocked by Yao. Yao blocked O’Neal’s first three shots of the game.

jim yardley

He goes to America, and he becomes an all-star. For the Chinese fans, this is fantastic, because even as they loved basketball, they always recognized that their players really couldn’t compete in the N.B.A., except here was Yao. He was doing it. He was incredible.

archived recording They’re watching live in Shanghai at 10:30 in the morning as O’Neal goes right at Ming.

jim yardley

Viewership just went through the roof on Chinese television.

archived recording There are 1.3 billion additional fans who give a hoot about this game. The most populous nation on earth will have one eye on their breakfast cereal and the other eye on this building.

michael barbaro

And of course for the N.B.A., I have to imagine this is very good business.

jim yardley

Oh, definitely. The N.B.A. has always known that there is huge money to be made in China, without question. I mean, the market itself is massive. You have 300 million Chinese who play basketball. The N.B.A. started its own China subsidiary, N.B.A. China. When it was formed, it was worth $2 billion. It’s now worth $4 billion.

michael barbaro

Wow.

jim yardley

Oh, it’s just stunning. One of the big reasons for that of course, is streaming.

archived recording [SPEAKING MANDARIN]

jim yardley

They are now streaming live N.B.A. games, so you have hundreds of millions of Chinese going to work every day and watching the N.B.A. live on their phones.

michael barbaro

Jim, as all this money is coming in, and as basketball is just exploding in China, how is the N.B.A. grappling with what, I have to imagine, are the moral complexities of operating in a country like this, where authoritarianism reigns, where human rights are constantly violated, and where freedom of speech is not really completely allowed?

jim yardley

Oh, I definitely don’t think they’re naive. I think the N.B.A. knows full well the situation it’s operating in. You know, it’s interesting, back in 2006, David Stern, the commissioner who sort of made all this possible, had an interesting quote. And I’ll read it to you. It said, “Believe me, the China situation bothers me, but at the end of the day, I have a responsibility to my owners to make money. I can never forget that, no matter what my personal feelings might be.”

michael barbaro

Hmm.

jim yardley

That’s pretty straight ahead. I think the N.B.A., though, one of the rationales that they believe in was China is opening up, and what we are doing is creating a way for both cultures to come together.

michael barbaro

Hmm.

jim yardley

A way that’s not political, something you could watch and sort of let the differences fall away.

michael barbaro

So the thinking is let’s be all about sports, let’s stay out of politics, and we can do some good here.

jim yardley

There is an expression for Western companies: Avoid the three Ts. Taiwan, Tibet and Tiananmen Square. Basically, companies knew that if they stumbled onto those three topics, they would pay for it with the Chinese government.

archived recording 1 Mercedes Benz, the carmaker, they just apologized to the Chinese government for featuring the Dalai Lama in an ad. archived recording 2 Well, San Francisco-based Gap is apologizing over a shirt that featured what China calls an incomplete map of its country. archived recording 3 Marriott International is apologizing after a questionnaire gaffe that listed Chinese-claimed regions, like Tibet and Taiwan, as separate countries.

jim yardley

Those were the red lines, the ones they knew about. And that’s kind of the world that they operated in.

michael barbaro

We’ll be right back. So the unspoken rule here is, don’t kick the hornet’s nest, and you can do business in China, you can make a ton of money, and it will all be fine.

jim yardley

Yeah, definitely. That was the hornet’s nest that Daryl Morey kicked, and it instantly put the N.B.A. in a perilous position. The N.B.A. had spent decades building this massive business, with projections that the business was going to double and triple in years. And suddenly, it’s tied up in politics that it has spent its whole time trying to avoid, and it had to react quickly in real time. And its early statements were not pretty.

michael barbaro

What were those early statements?

jim yardley

Well, Sunday, October 6, the N.B.A. released a statement, and I’ll read it to you. “We recognize that the views expressed by Houston Rockets general manager Daryl Morey have deeply offended many of our friends and fans in China, which is regrettable. While Daryl has made it clear that his tweet does not represent the Rockets or the N.B.A., the values of the league support individuals educating themselves and sharing their views on matters important to them. We have great respect for the history and culture of China and hope that sports and the N.B.A. can be used as a unifying force to bridge cultural divides and bring people together.” So what you can see in this statement is basically the N.B.A. trying to have it both ways. It’s sort of apologizing, more or less, to China, and at the same time, putting in language that suggests that it still allows its individuals to speak out. I mean, the reason for this, of course, is the N.B.A. in the United States is the great progressive sports league. It’s the league where players speak out, coaches speak out.

archived recording Spurs and U.S. men’s national team head coach Gregg Popovich had some very strong comments on the president in an interview.

jim yardley

I mean, many players and coaches are quite political in the Trump era and quite critical of Trump.

archived recording This man in the Oval Office is a soulless coward who thinks that he can only become large by belittling others. We have a pathological liar in the White House. Unfit intellectually, emotionally and psychologically to hold this office, and the whole world knows it, especially those around him every day.

jim yardley

So at one level, the N.B.A. has got to — how can it allow that to happen in the United States, where it lets its players be freewheeling commentators on politics, and then suddenly is apologizing to China when a G.M. puts up a tweet about democracy?

michael barbaro

Right, and how does that mixed message go over?

jim yardley

Very badly. It does nothing in China. It doesn’t please or appease anyone, and it actually causes a huge backlash in the United States.

archived recording 1 And this is totally disgusting, that the N.B.A. is willing to be more concerned over paychecks and money than rather humanitarian efforts. archived recording 2 They have, like, a $1.5 billion deal with the television rights, so it’s the almighty dollar that apparently is above everything else.

jim yardley

Literally people are lambasting this statement as being kind of weak-kneed and not standing up for free speech.

archived recording Ted Cruz tweeted this, “As a lifelong Houston Rockets fan, I was proud to see Daryl Morey call out the Chinese Communist Party’s repressive treatment of protesters in Hong Kong. Now in pursuit of big money, the N.B.A. is shamefully retreating.”

jim yardley

I mean, it’s incredible who it brings together.

archived recording Across the aisle, coming in hot, Beto O’Rourke tweets, “The only thing the N.B.A. should be apologizing for is their blatant prioritization of profits over human rights.”

jim yardley

Beto O’Rourke and Ted Cruz, two politicians who hate each other’s guts, are both unified in condemning the N.B.A.

archived recording This is an absolute public relations nightmare. They’re getting it from both sides here.

jim yardley

They have put themselves in a terrible spot.

michael barbaro

And what is the spot they’ve put themselves in?

jim yardley

Chinese companies are furious. They’re suspending licensing agreements with the N.B.A. The Rockets are banned from state television on CCTV. State television is no longer showing the exhibition games. It is a full-blown confrontation, and Adam Silver, who is sort of famous as being the most progressive commissioner of the American sports leagues, is really in a fix.

michael barbaro

So now the N.B.A. has thoroughly offended both sides. People in America think that the league has kowtowed to Communist China, done what this authoritarian government wants. And over in China, the Chinese think that the N.B.A. has injected politics into this wonderful, beloved, apolitical sport and basically put their hand on the third rail of Chinese politics.

jim yardley

Exactly.

michael barbaro

That’s quite an achievement.

jim yardley

Well, you’re right. It was absolutely the opposite of what any multinational wanted to do, offend all of its consumers everywhere. But Silver is in Asia for this tour.

archived recording (adam silver) As some of you may know, I issued a statement shortly before this press conference because I thought there was a lot of misunderstanding out there about our position.

jim yardley

He walks into a press conference. He’s in an impossible, difficult situation.

archived recording (adam silver) And essentially, what I’ve said in that statement is the long-held values of the N.B.A. are to support freedom of expression and certainly freedom of expression by members of the N.B.A. community.

jim yardley

And he stands up for free speech. He sort of wipes away some of the muddled weakness of those earlier statements of the league.

archived recording (adam silver) What I also tried to suggest is I understand that there are consequences from that exercise of, in essence, his freedom of speech. And, you know, we will have to live with those consequences. It’s my hope that for our Chinese fans and our partners in China, they will see those remarks in the context of, now, a three-decade, if not longer, relationship.

jim yardley

And if there were economic consequences, so be it. So I think that he recognized he had to figure out what the league stood for, and he did.

michael barbaro

Right. He’s forced into this position, and it’s not necessarily the league’s first instinct.

jim yardley

I mean, look, there’s absolutely no way that when Adam Silver took off from, I assume, New York to fly to Asia, that he would have wanted or thought he would end up having to be a defender of free speech. It’s remarkable, if you really think about it, that a single tweet launched this geopolitical situation. It became another moment where people who really pay attention to the U.S. and China are kind of asking themselves, hey, is this another example about how we’re breaking apart? About how this whole decades-long project of working together and integrating our economies and seemingly moving in the right direction or the same direction — is it falling apart? It’s kind of stunning that basketball raised that question. And so we’re sort of staring at these situations where we’re in a moment of great tension between China and the United States. We have a trade war. We don’t quite know how that’s going to play out. This economic arrangement that’s been in place for decades is really in an uncertain moment. And for all of these companies playing by these unspoken rules, the pressure is rising, and it’s just inevitable. It’s going to be harder and harder to paper this over, to pretend like these problems don’t exist.

michael barbaro

And so what exactly is the solution? Just kind of hope that you don’t kick the nest or kick it too hard? Or is there an alternative?

jim yardley

There’s so many layers to it. Politically, with the trade war, you hear certain people talking about, are we seeing the great decoupling, where this economic arrangement between these two great giants is sort of falling apart? Is this what we’re seeing? There is the other view too, and the one that has usually held sway, and that just might hold sway this time, which is that pragmatically, there’s so much at stake for both countries, they’re going to find a way to go forward. China is a big power. It’s going to be the biggest economy in the world soon, and by some measures, it may be. But the United States is a powerhouse, too. And just as they’re important to us, we’re important to them. And they don’t want to kick our hornet’s nest too hard, either. A complete break with the United States takes us into just terrifying, uncharted territory. They don’t want that.

michael barbaro

Well, having sufficiently tortured this hornet’s nest metaphor, thank you, Jim.

jim yardley

My pleasure, Michael. It was nice talking to you.

michael barbaro

We’ll be right back. Here’s what else you need to know today. On Thursday, two associates of the president’s private lawyer, Rudy Giuliani, were arrested for their role in an illegal scheme to funnel foreign money to a Texas congressman in order to influence relations between the U.S. and Ukraine. The arrests suggest that the shadow foreign policy pursued by Giuliani and his allies on behalf of President Trump may have included criminal conduct. Both associates of Giuliani, Lev Parnas and Igor Fruman, tried to use campaign donations to convince the congressman, Pete Sessions of Texas, to support the removal of the U.S. ambassador to Ukraine, whom both Trump and Giuliani saw as an obstacle in their efforts to get Ukraine to investigate the president’s rivals. That ambassador is expected to be deposed by House impeachment leaders later today. And —

archived recording [GUNFIRE]

michael barbaro

The Turkish military assault on northern Syria has killed at least 23 Kurdish fighters and four civilians and injured around 70 more, putting the United States in the extraordinary position of having allowed for the death of its allies. The president of Turkey, Recep Tayyip Erdogan, dismissed international outrage over the assaults, saying that the operation was in the best interest of Turkey and Syria.

archived recording (recep tayyip erdogan) [SPEAKING TURKISH]

michael barbaro