Hong Kong Crisis Slams the NBA: CSR Ranks Behind Profits

As major US brands vie for a presence in China, many have been careful to tiptoe around the crisis in Hong Kong. 

The go-to stance for many companies and organizations has been to steer as clear as possible from this geopolitical firestorm in order to avoid potentially angering the Asian powerhouse nation.

Painfully, I can see why. The Chinese market represents big money, and no business leader will want to risk getting on the Chinese government’s bad side. The economic consequences can be dire.

Houston Rockets team manager Daryl Morey found out how dire after tweeting an image supporting the pro-democracy protesters in Hong Kong last week. As CNN reportsOpens a new window , that single tweet has ricocheted into “the NBA’s worst nightmare.” The Chinese Basketball Association has cut ties with the Rockets, and the team’s Chinese sponsors have followed suit.

Meanwhile, Tencent Sports, the league’s digital rights owner in China, has stopped broadcasting all Rockets games, while Alibaba-owned e-tailer Taobao has even removed all Rockets-affiliated products from its site.

It looks as if the Houston Rockets have been scrubbed from China altogether — a warning to any brand that may consider making pro-Hong Kong comments or behaves ‘insensitively’ to China.

The damage hasn’t been confined to Houston. The NBA’s Chinese partners have likewise suspended ties with the league.

So what has the NBA done since the scandal broke? Floundered. That’s hardly a surprise considering the organization’s current tightrope act. On one hand, it’s trying to recover with China, where the league’s business is purportedly worth $4 billion.

The association has issued its own pseudo-apologies, branding the tweet as “regrettable” (in an English-language press release) and that it was “extremely disappointed in the inappropriate remarks” (in a press release posted in Mandarin to Chinese social media). It also had Rockets superstar guard James Harden stress the team’s love for China during a press conference in Tokyo.

On the other hand, however, the NBA is also trying to avoid publicly sacrificing too many of the American values it has sought to embody back home.

Indeed, the NBA in recent years has been unafraid to take political or social stances on controversial topics. As a result, many media outlets have claimed that the league is not scared of “leading on social justice” — an enviable position for any brand out to show consumers its commitment to corporate social responsibility.

NBA stars, for instance, have openly supported the Black Lives Matter movementOpens a new window , while the league pulled a major game out of North Carolina over the state’s law restricting the use of bathrooms by transgender people. Some of the sport’s biggest stars — Lebron James and Steph Curry — have openly criticized Donald Trump, even waging a social media spatOpens a new window with the president.

This ‘China conundrum’ has marred the NBA’s image stateside. The organization’s hypocrisy has spoken volumes to American audiences and media outlets that have been quick to criticize the league for trying to play both sides, distancing itself from its supposed values rooted in social and political activism.

As Oliver Connolly wrote in a seething articleOpens a new window in The Guardian, “you cannot fence-sit accusations of human rights abuses.” He rightly points out that the NBA was “happy to lap up the praise for their supposed “wokeness” when it came to issues…that ultimately fit with their overall target: selling League Pass subscriptions to young people with disposable income.”

Even Nike – which has made a name for itself as a progressive brand that will stand up for the social and political causes it believes in – has hopped on the ‘keep-China-happy’ bandwagon by pulling all Rockets merchandise from its Chinese storesOpens a new window .

Ultimately, this whole ordeal has proven two things: The NBA is an entertainment machine aiming to maximize revenue. And that most of the time – even for the most socially and politically vocal brands – money beats CSR.

Why marketers should care

Corporate social responsibilityOpens a new window matters more than ever to the modern consumer. Younger generations with growing spending power care about brand values, and are far more discriminating about the companies they to buy from and engage with.

Consequently, socially responsible marketingOpens a new window , brand activism and brand identity/imageOpens a new window have become important elements of companies’ marketing strategies as they compete for consumer loyalty.

In fact, take it from NBA Commissioner Adam Silver (oh, the irony!): “In this day and age, you really do have to stand for something…All CEOs, all big corporations these days really have no choice. It’s an expectation from their customers that they’re going to take a position.”

This is especially true with US audiences.

So when a brand does something contradicting the higher values it’s been touting, count on Americans to speak with their wallets.

The NBA’s current catastrophe should serve as a reminder that socially responsible marketing isn’t simply slapping ‘do the right thing’ value on a campaign. The brand purpose is important and should be chosen and maintained carefully.

And even then, one misstep can collapse the goodwill earned through years of carefully constructed, value-based messaging.