The NBA, Dolce & Gabbana and China Live In A Parallel Universe
The NBA and Dolce & Gabbana find themselves in a parallel universe. Offended by their advertising, Dolce & Gabbana was also banned by the Chinese government and society. It was a news story without traction much beyond fashion industry circles. An international luxury brand having issues in China seemed far away and not very relatable.
Now that a similar situation has hit the NBA, it is massive mainstream news.
The back story: About a year ago, Dolce & Gabbana ran three 40 second advertising spots on social media. They were designed with the intent to show their love for the Chinese consumer while being irreverent and endearing. Instead, the entire country of China took them as offensive and insensitive. Within days, founders Domenico Dolce and Stefano Gabbana issued a lengthy apology on Twitter.
Compare this to the reaction and response by Adam Silver, NBA Commissioner.
Two very different apology styles.
A year from now, what will this look like for the NBA?
This is Dolce & Gabbana’s reality one year later-
The Dolce & Gabbana punishment shows in revenue, media metrics and the always-important engine of luxury status branding: celebrity pop culture. Various reports indicate that social media reach has declined by 65% and their Asian region revenue is down by as much as 25%.
Dolce & Gabbana is a significant operation at $1.5B USD. By any standard, these are very real numbers. In effort to protect their global careers, US celebrities are reportedly eschewing Dolce & Gabbana’s fashion on the red carpet and earlier this year, the model in their ads, Zuo Ye surfaced. She issued statements of apologies and regret. She shared how the incident has almost entirely destroyed her career and how she has experienced frightening threats and harassment.
What is at stake-
NBA China is worth $4B.
The cross-dynamics of all this are quite mind-blowing. The US and China trade negotiations are carrying on and the two countries are blacklisting each other’s companies. The head of the Chinese Basketball Association is Hall of Famer Yao Ming, who had played his entire US career in Houston. Unbelievably, this the same team from which the much hated tweet originated. Tencent, the Chinese streaming video platform that hosts the NBA, recently signed their contract extension for $1.5B. Now Chinese fans want refunds due to the halt. Tencent’s Music Division trades on the NYSE and it is currently in a class action lawsuit for false and misleading statements. Joseph Tsai is owner of the Brooklyn Nets and co-founder of Alibaba, China's most valuable company. The Nets and the Lakers played an exhibition game today in Shanghai. Then, of course there is the entire reason and motivation behind the Houston coach’s tweet- Hong Kong’s social unrest and rioting.
Globalism is not just about corporate business opportunities. This insane matrix of interconnectivity goes far beyond that.
There is much analyses and parsing of the situation. It’s all basically moot. Dolce & Gabbana apologized profusely. Adam Silver’s apology is highly conditional. Do either really matter? Following their leader in an utterly unwavering manner is bedrock to Chinese society. So, it seems that short of a complete exoneration by President Xi Jinping himself, this status will continue for both the fashion house as well as the sports franchise.
How long it continues is the real question.