How the NBA made a no-win situation worse

Experts call the league's crisis a 'new normal' for multinational businesses.

The NBA found itself in a no-win situation this week when Houston Rockets GM Daryl Morey supported Hong Kong protestors on social media. And agency experts, including a former communications executive with the league, say its initial public response inadvertently juiced the crisis. 

"It took a few minutes to find the right tone," says Natalie Knorr Best, COO at French/West/Vaughan, who held communications roles with the Charlotte Hornets and the NBA in its New York headquarters.

Knorr Best adds that this is a case study in the making for the NBA, and for any other multinational company trying to navigate expansion in countries undergoing social and political unrest. "The league has undergone a globalization, and this will not go away. The more the NBA engages with the rest of the world, the more similar issues it will face," she says.

The crisis tipped off when Morey expressed support for pro-democracy protests in Hong Kong on Twitter, captioning an image, "Fight for freedom, stand with Hong Kong." 

In reaction, partners and sponsors of the NBA in China, including the Chinese Basketball Association; Tencent Sports, the digital rights holder of the NBA in the country; and fast-food chain Dico’s all suspended ties with the league.  

The NBA, which is estimated to derive at least 10% of its revenues from the world’s second-largest economy, quickly branded Morey’s tweet as "regrettable" in a statement from chief communications officer Mike Bass on Sunday. Meanwhile, Morey deleted his tweet and posted an apology. The league did not respond to inquiries seeking comment.

But the mea culpa was not enough for Chinese stakeholders, nor did it stop criticism in the U.S., including from politicians who accused the NBA of bowing to communist censorship. Many U.S. fans didn’t like it earlier. In the nation’s capital, protestors handed out T-shirts and signs in solidarity with Hong Kong when the Washington Wizards hosted a team from the Chinese Basketball Association. 

"The NBA’s first statement tried to have it both ways," notes Michael Bova, senior director at Dezenhall Resources. "From a business perspective with their sponsors in China, they tried to distance themselves from Morley’s statement by calling it ‘regrettable,’ while from a U.S. fan perspective, saying at the same time individuals are free to share their views. The problem is, playing both sides in a situation like this is only going to get you in more trouble, as you will not satisfy either side and only extend the controversy."

Two days after its first statement, the NBA released a second, 354-word response, this time from NBA commissioner Adam Silver. It began, "I recognize our initial statement left people angered, confused or unclear on who we are or what the NBA stands for."

"Let me be more clear," Silver said in the statement. "It is inevitable that people around the world—including from America and China—will have different viewpoints over different issues. It is not the role of the NBA to adjudicate those difference. However, the NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues. We simply could not operate that way."

At a press conference in Tokyo before a preseason game between the Rockets and world champion Toronto Raptors, Silver reiterated that the league is "not apologizing for Daryl exercising his freedom of expression." The commissioner noted, however, that he does regret "so many people are upset, including millions and millions of our fans."

Bova says the NBA's second response "offered a much stronger sentiment," which would have shortened the lifespan of the crisis had the league not rushed the first response. "It was clear the audience Silver was speaking to in Tokyo was the association’s players, employees, team owners, fans and sponsors, as it should have been from the start," he tells PRWeek. "When it comes to a crisis, your objective should be to end the lifecycle of the story. Don’t make things up, state your business standards, practices and values and how they apply to the situation."

Knorr Best said she was impressed with how Silver took control of the messaging. 

"Silver has a magnificent track record of handling difficult communications issues with delicate skill and leadership," she says. "He held firm and was emphatic on our right to have a point of view."

Another option

Virtually every major corporation has strong employee policies on social media designed to uphold company values and protect corporate interests. Such policies typically make clear that employees represent the company even when on personal accounts or private online social networks. 

With that in mind, Dean Crutchfield, CEO of Crutchfield + Partners, says the NBA should have exercised another option: dismiss Morey. Crutchfield says other employers would find rogue commentary of a sensitive geopolitical nature grounds for termination, especially if it was about a critical and growing geographic market, regardless of how well-meaning the message. 

"If a senior executive and important representative of Apple came out with a remark like that about their most successful business unit, that executive wouldn’t be there anymore. It simply wouldn’t be tolerated in a corporate environment," states Crutchfield. "It was one man, one tweet; they should have fired him and fired him fast."

If they had, instead of making a statement about democracy and free speech, the NBA would have addressed business protocols and guidelines in relation to social media. 

"The statement would read something like, ‘This is not how our people behave on social media, uncontrolled and with no regard for their professional responsibility. His personal opinion should have been kept to himself given the platform he has being part of this organization,’" says Crutchfield.

‘New normal’

Still dealing with the fallout from Morey’s tweet, the NBA on Friday morning said there would be no media availability for the rest of its tour in China, but exhibition games would continue to take place. "They have been placed into a complicated and unprecedented situation," the NBA said of the teams in a statement. "It would be unfair to ask them to address these matters in real time."

The statement followed a question from CNN’s Christina Macfarlane being blocked by a media relations officer for the Rockets during a press conference in China with two of the team’s stars: James Harden and Russell Westbrook. Again on the defensive, the NBA quickly apologized for the media official’s behavior. 

James Robinson, global lead for geo-commerce at APCO Worldwide, says this is a difficult new playing field for the NBA, and other organizations looking to China for growth.  

"This incident is the new normal for multinationals in China," he says. "The government uses state-controlled media to stir up nationalist fervor, which can be unleashed against foreign brands that say things that it sees as politically incorrect. This leads to self-censorship by brands, who are terrified of the commercial hit they might take from a misstep."

Robinson adds that "even outside of China, multinational businesses are being weaponized by national governments to serve their geopolitical interests in conflict with other nations." 

"This new dynamic of ‘geo-commerce’ really requires multinationals to weigh their core values with the costs and benefits of doing business in China," he adds, noting that the NBA could work with other sports leagues who are expanding into new markets. "It’s always difficult for one company to stand up to China by itself, so there’s opportunity for the NBA to work with other leagues like the NHL and Premier League to adopt common positions on things like free speech."

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