President Donald Trump’s decision to bar businesses from dealing with Chinese social media app WeChat could negatively impact the NBA’s business arrangement with the Chinese Communist Party.
Trump’s decision to ban businesses from communicating with the app could create problems for the league, which has a business deal with WeChat’s parent company, Tencent Holdings, CNBC reported Tuesday. The NBA’s $1.5 billion deal with Tencent was signed in 2019 before Trump issued the orders on Aug. 6 over concerns that WeChat poses a threat to U.S. national security.
NBA China, which conducts all of the league’s business in the country, has likely surpassed $5 billion in valuation as a result of the deal, CNBC noted in the report. (RELATED: Trump Signs Pair Of Late Night Executive Orders Banning Communications With TikTok, WeChat Parent Companies)
More than 500 million people watched NBA programming in China during the 2018-2019 season, allowing team owners to collect revenue on NBA China’s merchandise sales, along with other forms of league content, CNBC reported.
Tencent has seen its shares drop roughly 10% since August 7.
CHICAGO, ILLINOIS – FEBRUARY 15: NBA Commissioner Adam Silver speaks to the media during a press conference at the United Center on February 15, 2020 in Chicago, Illinois. (Photo by Stacy Revere/Getty Images)
Trump’s order also prohibited all individuals from communicating with TikTok until Microsoft, or some other American business, can purchase the upstart video streaming app. TikTok threatened to sue the administration Aug. 7, arguing in a blog post at the time that the president made the move “without any due process.”
U.S. officials and lawmakers worry TikTok in particular is collecting user data and transferring the content to Beijing, where they fear Chinese officials can analyze the data to learn how to manipulate social media platforms for the purpose of promoting propaganda.
Americans should download the app “only if you want your private information in the hands of the Chinese Communist Party,” U.S. Secretary of State Mike Pompeo said during a July Fox News interview. Other U.S. officials and lawmakers have expressed concern that TikTok may be providing user data to Beijing officials.
The president told reporters on Aug. 3 that he is amenable to the idea of Microsoft purchasing the upstart Chinese company, so long as the acquisition comes by Sept. 15.
Trump also said a portion of profits from a potential sale should go to the United States Treasury.
NBA officials meanwhile are dealing with the fallout from a series of issues related to the league’s ties to China. Commissioner Adam Silver faced harsh criticism in 2019 after several basketball players condemned Houston Rockets GM Daryl Morey for supporting the human rights protesters in Hong Kong.
Coaches at NBA training academies in China are reportedly physically abusing players, according to an ESPN investigation, published in July. The league opened such camps after former Houston Rockets center Yao Ming etched out a successful career in the early 2000s.
One employee said that the academies were “a sweat camp for athletes,” according to ESPN’s investigation.
NBA spokesman Elliot Steinbaum told the Daily Caller News Foundation that the league is “awaiting further clarity on the executive order.”
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