Kyle Bass rips US companies' 'Faustian bargain with the devil' in NBA-China firestorm

Julia La Roche

J. Kyle Bass, a prominent investor who’s been a vocal supporter of Hong Kong’s protest movement, lashed out on Monday at U.S. companies and organizations that seem to have struck a “Faustian deal with the devil” to stay in China’s good graces.

Amid a raging controversy surrounding a now-deleted tweet by the general manager of the NBA's Houston Rockets, who voiced support for Hong Kong’s independence, Bass told Yahoo Finance the backlash has put a spotlight on the country political system — and the companies and entities that apologize so they can do business there.

"Today, you have this very interesting scenario with the NBA where you're bringing the whole idea of the Chinese Communist Party and their bullying and their influence, and they're exporting their totalitarianism to U.S. soil,” the CIO of Dallas-based hedge fund Hayman Capital Management said.

The NBA isn’t the only organization to be hit with backlash in China. But Bass said companies apologize or acquiesce to Beijing’s wishes because they're making a "simple Faustian bargain with the devil, with the Chinese Communist Party."

Over the weekend, Rockets general manager Daryl Morey shared an image on Twitter in support of the protesters in Hong Kong that said, "Fight for freedom, stand with Hong Kong." Unrest there has grown increasingly violent as the movement becomes more pro-democratic in nature.

Morey’s message went over badly in China, with the state broadcaster CCTV and tech giant Tencent — the NBA's exclusive digital media partner — canceling their broadcasts of Houston Rockets games.

Even as Morey tried to walk back his Tweet, the team’s owner and the NBA distanced themselves from what he said. Houston Rockets owner billionaire Tilman Fertitta emphasized that Morey "does NOT speak for the [Houston Rockets]," and the team is "NOT a political organization."

Separately, the NBA issued a statement that recognized Morey's tweet "deeply offended many of our friends and fans in China" and that they have "great respect for the history and culture of China."


Riot police chase protesters near a demonstration in Hong Kong, Monday, Oct. 7, 2019. Tens of thousands of masked protesters marched defiantly in the city center Sunday, but the peaceful rallies quickly degenerated into chaos at several locations as hard-liners again lobbed gasoline bombs, started fires and trashed subway stations and China-linked banks and shops.(AP Photo/Felipe Dana)

While basketball is hugely popular in China, and that market is extremely lucrative for the league, the league came under sharp criticism for the subsequent apologies, and taking a stance that appeared to put profits ahead of principles.

Bass told Yahoo Finance that it's "unbelievable" that the NBA issued an apology.

"I think it's crazy that the GM of the Houston Rockets, Morey, deleted his Tweet,” he stated. “I mean, are you telling me that we can't exercise our right to freedom of speech in the U.S., defending the liberties, freedoms of U.S. citizens and the morality and the values that we fought so hard to enjoy in our country?"

Bass called on the NBA players, whom he referred to as "social justice warriors," to look into this issue "a little bit,” adding that the league “and the rest of the billionaires who do business in China are always apologists to China, and why?"

Speaking to American entities that bow to China, the investor asked “how much of your morality, how much of your values are you willing to compromise for money?"

He added: “The Chinese play greed against the capitalist system and those that don't have morality or values — and you can name an entire list of these companies — they'd rather sell more stuff in China than live up to their own morality and values, and that's where we are today. And, unfortunately, the NBA is in the same camp.”

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

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