Rockets loses $20 million overall revenue due to China controversy
We’re one month removed from Houston Rockets general manager Daryl Morey sparking a controversy over supporting Hong Kong demonstrators, and details of the fallout from tensions with China and its huge, NBA-hungry market are emerging.
ESPN’s Kevin Arnovitz detailed a huge financial lost for the Rockets due to Morey’s comments and the ensuing backlash, reporting up to $20 million in multi-year deals were terminated in the wake of the controversy.
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.
Although Morey shared a simple image on Twitter in early October, a photo expressing “stand with Hong Kong” and “fight for freedom,” officials in China along with companies aligned with the NBA and the Houston franchise were outraged with the democratic display by the Rockets executive.
Rockets owner Tilman Fertitta was also outraged by Morey’s reckless display of social-media activism, having to come out and say Morey’s views do not represent the team. Fertitta purchased the Rockets from Leslie Alexander for $2.2 billion. While Alexander made strides in building a relationship in the Chinese market, Morey’s controversy could damage Fertitta’s investment a great deal—which might explain his immediate reaction and condemnation of his executive’s tweet-support.
Morey shared support for Hong Kong protestors while in East Asia at the time—the Rockets were in Japan but other teams were in China to play preseason games—which might have threatened the safety of players and team officials.