For the NBA, Daryl Morey Is an Especially Inconvenient Person to Have Angered China

October 18, 2019, 7:49 PM UTC

In 2006, mere months after Daryl Morey took over as the Houston Rockets’ assistant general manager, then-NBA commissioner David Stern spoke to Sports Illustrated about his league’s growth overseas. “Believe me,” Stern told veteran hoops scribe Jack McCallum, “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.”

Thirteen years later, that uneasy line between human rights and profits remains as the NBA grapples with its relationship to China in the wake of a tweet Morey sent and then quickly deleted. The message was simple, a graphic with the text “FIGHT FOR FREEDOM STAND WITH HONG KONG,” but it set off a firestorm that still reverberates two weeks later. One league source said this week that if the NBA could have picked the one team it least wanted to anger China, “I’m pretty sure the Rockets would be at the top of the list.”

That sentiment stems from multiple facets of the image Morey has cultivated over his 12 years as the Rockets’ general manager: his intellect, his reach on Twitter. Consider, too, that the NBA would certainly rather a general manager with a less marketable roster be the one to offend its largest overseas market. But more than anything, Morey’s words carried so much force because of one player who was about to begin his fifth of nine seasons in a Rockets uniform when the executive joined the organization: Yao Ming, the 7’6” former Shanghai Sharks center was the first Chinese superstar in the NBA. Because of Yao, the Rockets have been wildly popular in China, the NBA’s most lucrative emerging market, for nearly two decades.

In 2002, with Yao’s arrival, Houston had hired four Mandarin-speaking executives and begun a massive marketing program in the dialect, including web and radio content and in-game statistics. That year, 30 of the 120 NBA games broadcast in China featured the Rockets. Even after Yao’s retirement in 2011, the team dominated there—until this month, at least, when Morey’s moment of political opining pitted the NBA against the populous communist cash cow of a country and led some within the league to worry about financial concerns from jersey sales to a potentially shrunken salary cap.

Morey is more of a household name in China than any other NBA general manager, and when the country’s government denounced him, the Chinese Basketball Association followed suit. The league’s chairman is none other than Yao, and now, there’s a public fissure between the face of the Rockets’ front office and the most storied player in the team’s past. Still, Morey’s tweet carried weight both in the United States and across the Pacific for more complex reasons than his team’s close relationship with China. For one, the 47-year-old analytics geek-turned-executive has built an impressive social media platform over the past decade. On Twitter, he boasts more than 237,000 followers — greater than any of his counterparts — and has cultivated an air of approachability unlike that of any other league general manager.

More than that, though, Morey has always put forth an image of being something more than a suit. Consider the origin story of the man who’s embraced the nickname “Dork Elvis”: A computer science major at Northwestern gets an MBA at MIT and hits the big-time in one of the world’s most popular sports leagues. In 2007, when Morey was promoted to his current role, he was an aberration. Back then, most of his counterparts had maybe played, probably coached and almost certainly scouted before working their way up front-office ladders. That changed with the hires of Morey and Sam Presti in Seattle—they were installed in general manager roles within a month of each other—and Morey in particular brought data-driven decision-making in the NBA to the forefront. He staffed his team accordingly, hiring a robust analytics department that was at the time larger than any other franchise’s, and he co-founded the Sloan Sports Analytics Conference in 2006. The event, now a kind of see-and-be-seen venue for the sports intelligentsia, debuted in early 2007, and its rise to prominence—and into the mainstream—dovetailed with Morey’s ascendance. Fans began to pay upwards of $200 to hear sports nerds expound just as Morey gained a reputation as one of the NBA’s brightest and boldest minds. Fans perceive him as someone whose words carry weight—about more than just basketball.

And when Morey does talk hoops, it’s often nuanced, more math and jock-speak. In the analytics world, he’s credited with the invention of true shooting percentage, an advanced statistic that measures shooting efficiency, taking into account the belief that 3-point attempts are more valuable than mid-range jumpers. That thought—and the widespread adoption of true shooting percentage—has sparked an increase in 3-point shooting across the NBA this decade. 

When Morey hired Mike D’Antoni in 2016, he finally found the coach best suited to his approach. Houston has led the NBA in 3-pointers attempted since D’Antoni took over, and it’s made it to the Western Conference Semifinals twice in that time span, the Western Conference Finals once. Morey was named the NBA’s executive of the year after that conference finals trip in 2018, earning the nod for the first time in his career.

“A big thing that’s been a part of my career is not only doing the analysis, but being able to convey it to the decision-makers at the right time and help make better decisions,” Morey said in a Q&A posted on the Sloan website in advance of the 2018 conference. “That’s what it’s about, making better decisions. As everyone in the analytics world knows, all the data in the world isn’t very helpful if you can’t bring that information and analysis to the point of decision at the key moments, and make the right ones. That’s to me what it means.”

Analytics have also fueled Morey’s acquisition of personnel, but in that arena he’s done more than simply identify undervalued players. He’s also relentlessly pursued superstars, to a good degree of success. In 2012, a year after Yao’s retirement,  Morey swung a trade that brought James Harden, one of the NBA’s premier young guards, to from Oklahoma City to Houston. The Harden trade also broke up the Thunder’s young core, thus defanging a Western Conference rival, and gave Houston its roster centerpiece. A year later, Morey inked Dwight Howard, and in 2017, he unloaded seven players and a wad of cash in exchange for Chris Paul. The 34-year-old guard re-signed with the Rockets the following summer, and in July, Morey engaged in trade talks again with Oklahoma City, flipping Paul for 30-year-old Russell Westbrook. Now, the Rockets have the fifth-best odds of any team to win the NBA championship in June—and beyond that, their roster is so star-studded as to include two players (Westbrook and Harden) who’ve been among the top 10 in jersey sales in China in the past three seasons. 

Morey’s tweet came a week before the Lakers and Nets were scheduled to play two preseason games in China, one in Beijing and the other in Shenzhen. In the days leading up to tipoff, sponsors defected and ancillary events were canceled. Chinese broadcaster CCTV announced it would no longer televise the matchups, and streaming platform Tencent took a similar tack. Speaking in Tokyo on Oct. 7, NBA commissioner Adam Silver—who has backed Morey’s right to free speech—said that there had already been economic consequences for the NBA, and the reach and magnitude of the blowback is still impossible to fathom. Yes, NBA games returned to Chinese televisions this week—but the Rockets remain blacked out. At least 11 Nike retailers in China also pulled Houston gear from shelves, according to a Reuters report.

Players used to reaping the rewards of massive jersey sales will be hit in the pocketbook. LeBron James, who on Monday said Morey was “misinformed or not really educated on the situation,” has been the loudest voice decrying the general manager, and the face of the NBA has earned censure for appearing to value revenue over human rights. For a league that’s long prided itself on progressive values, the fallout from Morey’s tweet marks the first time those values have been at odds with massive profits: jerseys, shoes, box office sales to Space Jam 2 in 2021. 

“I don’t think the NBA is going to stand up for human rights in Hong Kong, and that will only encourage China to encroach more on human rights going forward,” said Victor Cha, a former director of Asian affairs on the National Security Council who’s written about the intersection of sports and politics, said. Cha added that the NBA should “have enough confidence in [its] product to believe that even if the government cuts off access… the Chinese public is not going to stand for that.”

Still, the NBA stands to suffer short-term losses in its biggest international market—estimates of the league’s income from China are imprecise but in the hundreds of millions of dollars annually—no matter how entrenched the sport might be. This week, Yahoo Sports reported that five NBA front offices have instructed staff to plan for a scenario in which the salary cap might drop 10 to 15%. A league source told Fortune that the NBA itself has sent no such advisory to teams and that such an outlook is premature; in the past, the league been diligent about communicating potential future fluctuations. 

Back in Houston, Morey has remained silent on social media since tweeting on Oct. 6 that he had no intention of causing offense to Rockets fans or friends in China. Morey emphasized in the tweets that he was thinking independently and said that he “appreciated the significant support our Chinese fans and sponsors have provided.” Silver has made no move to sanction the general manager, and Morey’s job appears safe ahead of the Rockets’ season opener on Oct. 24 against Milwaukee—which has almost no chance of being broadcast in the country of 1.4 billion where the team reigned supreme for more than a decade.

More must-read stories from Fortune:

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—Broadcasting rights, ticket sales, sponsorships: NBA’s Hong Kong crisis risks its massive China business
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