Dividends and Chinese TV drops NBA exhibition games after Morey tweets

Think about President Trump, everyday he tweets about a variety of subjects most of it has little consequences to the everyday life of US citizens. Houston Rocket GM Daryl Morey tweeted about Hong Kong and the desire to have more freedom. The Chinese government did not like the tweet and Chinese TV dropped NBA exhibition games.

In an article by Chris Gallagher and Se Young Lee of Reuters provides context – The Chinese market is one of the largest consumer markets in the world and for the past 20 years, the NBA has working to ensure people in China watch NBA games and buy merchandise. The Houston Rockets was the team which Yao Ming played and starred and is a national hero in China. The NBA broadcast rights for was sold for a 10 figure sum or $1.5 billion and online partner Tencent counted more than 500 million viewers for streamed games. If Houston were to relocate to Shanghai, it would be a profitable team.

Daryl Morey apologized for the tweet, however the Chinese government was not letting up , Chinese smartphone maker Vivo, a key sponsor for the exhibition games in China announced it was suspending all ties with NBA underscoring the strength of the backlash in the country.

Linking to dividend paying stocks, all companies employ people and everyone has opinions, most people working for a company are not the spokesperson of the company but they have opinions. In many countries around the world, people are allowed to voice their opinions, however in China some opinions are not allowed to be voiced. This is a very difficult aspect to manage, because of consistency and where leaders of countries draw the line. If you cross the line, be aware of consequences. Most institutional investors and corporate executives do not want to cross the lines.

There are more questions than answers, till the next time – to raising questions.

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