It’s long been known that the NBA has deep ties to China, namely through NBA China, valued at $5 billion. A new investigation shows that its owners’ ties to the country go far beyond the court.

The NBA’s 40 principal owners have over $10 billion in China-connected investments, according to an analysis by ESPN.

• Joseph Tsai, both the Brooklyn Nets owner and vice chair of Chinese retail giant Ali Baba, has 53.5% of his net worth in China. Tsai is Ali Baba’s second-largest shareholder, and has a net worth of $8.2 billion, per Forbes.
• Sacramento Kings co-owner Paul Jacobs has over 30% of his net worth tied to China, according to the investigation, through over $200 million in shares of Qualcomm. 
• Memphis Grizzlies owner Robert Pera has around $369 million in exposure to China through his wireless device parts manufacturer Ubiquiti.

Miami Heat owner Micky Arison has over $375 million invested in China through a venture connected to his cruise line company Carnival Corp. 

The tie-up entangles Carnival with a state-owned company, CSSC, that has military connections. CSSC has been tagged by the U.S. government as “acting contrary” to U.S. “national security or foreign policy interests.”

Tsai Ops

Tsai is often at the center of the NBA’s complicated relationship with China.

He reportedly tried to get Daryl Morey fired after Morey, the Houston Rockets general manager at the time, tweeted in support of Hong Kong protestors. Morey later had a suite he purchased at the Nets’ Barclays Center refunded.

Outdoor apparel, activewear, and footwear giant VF Corporation reported $2.8 billion in fourth-quarter revenue last Thursday, a 9% year-over-year increase. Full-year revenue reached $11.8 billion, a 28% jump.

VF Corporation includes several brands in its active segment, including Vans, Supreme, and JanSport, with The North Face, Altra Running, and Timberland sitting within its outdoor segment.

• The North Face brought in $800 million in revenue, a 24% year-over-year jump.
• Vans, which sells skateboarding shoes and apparel, recorded $1 billion in revenue, flat from the same period the year prior. The company’s earnings presentation said its wins were “partially offset by lower than planned growth at Vans.”

Still, five of VF Corporation’s brands, including Vans, as well as The North Face and Dickies, achieved record sales during the year. The North Face has grown its annual revenues 21% since 2020 to $3.26 billion.

Room for Improvement

While Vans saw its Global Vans Family membership reach 22 million — a 49% increase over the last 12 months, chairman, president, and CEO of VF Steve Randle wasn’t entirely happy with the company’s performance in the active space.

“A portion of our active segment did not achieve its potential,” Randle said. “We understand the issues, we have the right people in place and we know we will do better.”

The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, leveled up its gaming portfolio with one of the most iconic names in the space.

The roughly $600 billion fund acquired a 5% stake in Nintendo for $3 billion, making it the company’s fifth largest shareholder.

With its latest purchase, the PIF, operated by Prince Mohammed bin Salman, adds to a list of gaming investments that already includes:

• Activision Blizzard
• Electronic Arts
• Take-Two Interactive
• Over 5% of Capcom and Nexon
• 33.3% of SNK, which is expected to increase to 51% in the future

Some analysts believe that Saudi Arabia is developing its own content sector and is buying stakes from gaming companies to learn from them. Others see the investments as a simple bet that the companies’ shares will rise.

Unwanted Attention

While the PIF has been happy to invest across sports and gaming, it can raise challenging questions for those on the receiving end due to Saudi Arabia’s checkered human rights record.

The PIF’s purchase of Premier League team Newcastle for $373.6 million last year has drawn criticism, particularly in light of the U.K. government’s takeover of Chelsea FC after the sanctioning of its owner, Roman Abramovich.

Formula 1 has faced similar questions for continuing to race in Saudi Arabia.

Last year, “League of Legends” creator Riot Games backed out of a partnership planned with Saudi Arabian city Neom after facing criticism related to the country’s human rights record.

Foot Locker kept a steady pace in the company’s latest earnings report.

The sportswear and footwear retailer generated $2.18 billion in Q1 2022, a 1% increase year-over-year, narrowly missing analysts’ estimates of $2.2 billion in sales for the quarter.

• Net income reached $133 million in Q1, compared to $202 million in Q1 2021.
• Comparable-store sales fell by 1.9% compared to the same period last year.
• Shares of the company dropped over 30% in 2022 prior to the latest earnings report. 

Foot Locker, which operates 2,815 brick-and-mortar locations in 28 countries, opened 24 new stores and remodeled or relocated 23 stores in Q1, but closed 67 locations.

The retailer is converting approximately one-third of its Footaction stores into Foot Lockers with plans to shutter the remaining stores by 2023.

Foot Locker acquired Footaction and 350 of its stores from now-defunct retailer Footstar for $160 million in 2004.

Time of Change

Earlier this month, Foot Locker announced a strategic deal with Adidas to increase the sale of products from the German sportswear company at its stores, as Nike reduces its presence at the retailer.

The Oregon-based company is selling more of its products directly to consumers.