The Chinese backlash to the now infamous Hong Kong tweet by Houston Rockets GM Daryl Morey could cost the franchise nearly $20 million once terminated multiyear deals are calculated, according to a story published Tuesday by ESPN‘s Kevin Arnovitz.
The ongoing controversy could also have ramifications for owner Tilman Fertitta and superstar guard James Harden, if no resolution is reached between the NBA and its Chinese partners. Arnovitz writes:
No team has felt the brunt of the fallout more than the Rockets. League sources say the franchise has lost more than $7 million in revenue this season from cancelled Chinese sponsorship agreements and nearly $20 million overall when terminated multiyear deals are calculated.
Previous Rockets owner Leslie Alexander was able to parlay the Rockets’ presence in China into numerous investment opportunities, from wine distribution to the Chinese auto aftermarket. The friction between the NBA and China could temper any ambitions his successor, Tilman Fertitta, has to expand his portfolio into China after paying $2.2 billion for the team in 2017. For their superstar James Harden, the losses could be considerable if no resolution is reached. A source says Harden’s endorsement agreement with Shanghai’s SPD Bank Credit Card is imperiled.
One month later, the NBA is still making sense of how a tweet exploded into an international incident. A few peeks behind the scenes of a conflict that has receded from public view, but lingers.https://t.co/paXTk2o658
— Kevin Arnovitz (@kevinarnovitz) November 12, 2019
The financial amount of Harden’s endorsement pact with SPD Bank Credit Card was not reported in the story.
Two days after Morey’s original post, Harden attempted to mend fences with an apology to Chinese fans for the team’s involvement in the controversy. Harden typically travels to China at least once per NBA offseason for endorsement purposes and to promote his brand.
The overall terms are roughly in line with an October report from the Houston Chronicle‘s Jonathan Feigen, who said the fallout from Morey’s tweet in support of the Hong Kong protest movement could cost the Rockets between $10 million and $25 million. It remains to be seen if any of those relationships can ultimately be repaired.
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