NBA Commissioner Adam Silver speaks to the media ahead of the Milwaukee Bucks game against the Phoenix Suns in the first game of the 2021 NBA Finals on July 6, 2021 at the Phoenix Suns Arena in Phoenix, Arizona.
Garrett Ellwood | National Basketball Federation | Getty Images
Although the tensions between the USA and China are still high, the National Basketball Association wants to unite the two countries with its product.
Speaking to media members ahead of Game 1 of the 2021 NBA Finals on Tuesday, NBA Commissioner Adam Silver acknowledged the “major geopolitical issues” the league is facing as a feud between two global superpowers.
The disagreements between the US and China range from trade to finance to technology. On Tuesday, government officials downplayed the “new Cold War” narrative. And Silver said he wants the NBA to play a positive role in the feud.
“I think it remains important that we foster these sporting, educational and cultural relationships, especially when there is high tension between governments,” said Silver. “That’s what I’ve said from the start. It certainly doesn’t mean that we will bless everything that happens in China by any means. We are basically an American company and we follow the policies of the US government.”
The NBA has an interest in finding common ground as its China business is worth more than $ 5 billion. The deal includes a $ 1.5 billion media rights agreement with Chinese technology company Tencent. State CCTV also aired NBA games, but that partnership was broken in 2019 after Twitter comments from top Philadelphia 76ers manager Daryl Morey.
CCTV briefly returned games with the Los Angeles Lakers during last year’s NBA Finals, who continue to be popular in China thanks to Kobe Bryant. But also this season, games were taken off the network again. As for the Phoenix Suns and Milwaukee Bucks NBA finals, the league told CNBC games that they are still not available on CCTV.
Still, Silver expects the NBA to continue to distribute their games in the country for the foreseeable future. He said that showing games could play “a productive role” for US and China citizens to “get a better understanding of each other and see that we are all human and that there are similarities between us. And me think this form of engagement “is vital if we are to work together to solve some of our problems.”
A Chinese flag is displayed on goods at the NBA flagship retail store on October 9, 2019 in Beijing, China.
Kevin Frayer | Getty Images
Silver listed Covid-19 as one of the problems. The Delta variant of the virus is causing global concern and prompting President Joe Biden to urge more eligible Americans to be vaccinated. Silver also mentioned global climate, economic problems, and human rights as other issues that the NBA can play a role in solving.
“You have to argue face to face,” said Silver. “I think that through sport, as I said, we can at least find common ground. I still believe that we can play a positive role.”
But while the NBA is trying to mend its relationship with China, the league has already started moving to other areas. The NBA launched its Africa business in May, and the operation is valued at nearly $ 1 billion. NBA Africa will oversee the growth of the newly formed Basketball Africa League, operated by the NBA.
When asked about the similarities between NBA China and NBA Africa, Silver said, “There are some structural similarities as we converted a geographic area into a stand-alone entity and added strategic partners because we realized that this was the best opportunity for growth. But I think the comparison probably ends there. “
Africa is one of the fastest growing markets in the world, according to the United Nations, with a sub-Saharan population of approximately 1.07 billion. In 2010 the NBA opened its Africa headquarters in Johannesburg.
Chris Paul # 3 of the Phoenix Suns brings the ball up court against the Milwaukee Bucks in the second half of the first game of the NBA Finals at Phoenix Suns Arena on July 06, 2021 in Phoenix, Arizona.
Chris Coduto | Getty Images
Income is coming back but remains below its pre-pandemic peak
In his media availability on Tuesday, Silver also said league revenues have recovered from 2020, adding that the NBA “did a little better than we originally expected.” The NBA’s revenue streams were frozen after the pandemic outbreak last March and lost about 40% as fans were barred from participating in games. However, the reopening has helped the teams, especially those in the playoffs, as the money is more lucrative after the season.
The NBA’s top media partner, ESPN, reported that the league’s revenue fell to $ 8.3 billion for the 2019-20 season. That included a $ 200 million hit from Morey’s tweet and another $ 400 million in sponsorship and merchandising losses. According to The Business Journals, the NBA made $ 8.8 billion in the 2018-19 season.
As for revenue from the shortened 72-game campaign this season, “We don’t have the exact numbers yet, but we may see revenue drop about a third, roughly there, instead of 40 percent,” said Silver.
But the NBA should benefit, as revenue, including NFT-related royalties from Dapper Labs, helped it stay afloat. And the NBA achieved record sales of $ 1.46 billion, according to estimates by IEG, a sports partnership consultancy. In addition, multiple team sales rose franchise values and other investment vehicles helped NBA owners and minorities with liquidity.
Hence, the NBA cannot claim that it went broke during the pandemic.
“If things stayed on track and we could head for a new season next year that looks a lot more normal,” said Silver, “I think we did very well.”
The Suns led the Bucks 1-0 in a row after a 118-105 win. Game 2 of the NBA Finals is Thursday in Phoenix. The NBA is hoping for better viewership for the Finals this year, having suffered its lowest Game-1 ratings since 1994 last October.