Tencent holdings: The Chinese technology conglomerate at the center of global pop culture controversy

October 30, 2019

By Alex Cowen

NANJING, China — The NBA regular season started on October 23 in China. If you had purchased the Tencent Sports NBA package with the intention of watching the New Orleans Pelicans take on the defending champion Toronto Raptors, you would have been disappointed. Not because Kawhi Leonard left Toronto in free agency, and not because high-flying wunderkind Zion Williamson, New Orleans’ first pick and the first overall pick of the NBA Draft, wasn’t playing. You simply wouldn’t have been able to watch the game at all — and the reasons have very little to do with basketball. 

Tencent has been streaming the first week of the NBA regular season on roughly a 40 second delay, while also only streaming a select few of the games each night (or morning in China). There has been no explanation given to customers about the selection process, but the reasons for the tape delay are quite clear. On October 4, as the Brooklyn Nets and Los Angeles Lakers were about participate in promotional events across China, including two preseason games in Shanghai and Shenzhen, Daryl Morey — the longtime General Manager of the Houston Rockets — tweeted out vague, now-deleted support for the months-long protests in Hong Kong. What followed was one of the stranger sports stories of the decade and has brought questions of the intersection of entertainment and politics to the fore. And every time the story starts to lose steam, something happens or someone says something that fires up headlines yet again.

Daryl Morey tweeted this image on October 4.
 Image credit: Yahoo Sports

In a story that involves multiple high-profile personalities, including but not limited to NBA Commissioner Adam Silver; players LeBron James and James Harden; Congresspeople Ted Cruz, Alexandra Ocasio-Cortez, and Marco Rubio; President Donald Trump; and the Chinese government, one of the more underreported aspects of the affair is the technology conglomerate at the center of it all — Tencent Holdings.

Daryl Morey with Rockets star player, James Harden, who apologized for Morey’s tweet.
 Photo credit: Houston Chronicle

Tencent is a Fortune 500 company with over $47 billion in revenue and $105 billion in assets. It possesses a portfolio of over 600 companies. It owns a huge stake in Alibaba’s biggest e-commerce rival, JD.com. It has a huge stake in Meituan Dianping, a Chinese combination of Seamless, Postmates, and Yelp. It owns WeChat, a Chinese combination of Instagram, Twitter, and Venmo with over 1 billion users. It owns 12% of Snap Inc., the developer behind the Snapchat app. Subsidiary Tencent Video has an exclusive partnership with HBO and owns the streaming rights to Game of Thrones. When the final episode of the series aired after a multi-day delay in China, Tencent was at the center of the story. Many customers demanded refunds for their Tencent Video subscriptions, while Tencent apologized and blamed “media transfer issues” via a Weibo post. Tencent Music (TME) is analogous to Spotify and trades on the New York Stock Exchange (Spotify and TME have a strategic cooperation where they each own 10% of the other’s shares). When Facebook acquired WhatsApp for $19 billion, it was Tencent who they outbid. 

Tencent has also been making forays into movie production. In August, this ignited a controversy about China’s soft power projection, when the trailer for the Tencent Pictures-produced “Top Gun: Maverick” was released. In the first movie, released in 1986, Tom Cruise’s bomber jacket sports patches of the Japanese and Taiwanese flags. In the sequel, these patches have been replaced by two vague symbols with similar color schemes, so as to avoid suggesting that Taiwan is a sovereign nation as opposed to a PRC territory (or that it supports Japan). In addition to Top Gun, Tencent Pictures has produced and is producing many other pieces of classic American IP for the silver screen, including “Venom,” “Wonder Woman,” “Men in Black,” a Transformers movie, a King Kong movie, and a Terminator movie. They are also producing a movie about Mr. Rogers starring Tom Hanks, “A Beautiful Day in the Neighborhood.” 

The two patches in the original jacket, left, show the Japanese and Taiwanese flags. The new jacket, right, shows patches with unidentified symbols with similar color schemes 
Image Credit: CNN

Over the summer, Tencent Sports extended its distribution rights for all NBA games through the 2024-2025 season. Analysts estimate the deal to be worth roughly $1.5 billion, and according to Tencent’s announcement about the deal, more than 490 million people used Tencent’s platform to watch NBA games last year, with 21 million people tuning in for Game 6 of the NBA Finals. But Morey’s tweet about Hong Kong and the subsequent responses of high-profile personalities who continue to attract attention to the demonstrations in Hong Kong make it difficult for the games to stream unimpeded, while also inspiring previously neutral-on-China sports fans to read up on “what exactly is happening in Hong Kong, anyway?” Responses from players, commissioners, lawmakers and commentators on both sides of the story have alternated between playing up the outrage or trying to tone it down without having developed any clear or cogent strategy for how to move forward. The NBA, an organization that prides itself on social justice and its ability to ask hard questions, has found itself holding hands with an apparatus that prefers to keep the man behind the curtain concealed as much as possible.

On the heels of the NBA-Hong Kong kerfuffle, Hearthstone player Chung Ng Wai, who streams using the name Blitzchung, was banned from Hearthstone tournaments for one year during a Grandmasters event because he made statements advocating for the liberation of Hong Kong while wearing a black mask in an interview. The interviewers were swiftly fired and Blizzard Entertainment, which makes Hearthstone (and is owned by Tencent), justified their decision by citing a rule that any action which “offends a portion or group of the public, or otherwise damages Blizzard’s image will result in removal from Grandmasters and reduction of the player’s prize total to $0 USD.” 

People use sports, video games and movies as a way to escape and forget the stress of daily life or the depressing tickers scrolling the news networks. Audiences often prefer to leave actual unpleasantness at the door when they sit down to be entertained. And it makes us uncomfortable that our entertainers might hold views about the world different than our own. But as 2019 turns to 2020, it seems as if the last thing anyone can do is just shut up and dribble.