In an interview earlier this month with the head of Norway’s sovereign wealth fund — a big holder of Alibaba shares — Brooklyn Nets owner Joe Tsai talked about owning the team as well as what he wants in a corporate culture and leadership. Bottom line for the Alibaba executive chair and Nets governor: he still loves being the team owner despite everything that has happened with the organization. It is, he said, “absolutely fun.”
The interview was conducted nine days ago in Norway by Nicolai Tangen, CEO of Norges Bank Investment Management, on his podcast, In Good Company. NBIM is the Norwegian sovereign wealth fund which invests the country’s oil wealth. It owns almost two percent of Alibaba of which Tsai is both executive chair and co-founder.
“It’s absolutely fun. I love going to games.” said Tsai summing up where he is with the Nets, a big smile crossing his face.
For Nets fans, perhaps the most revealing parts of the 36-minute interview were Tsai’s discussion of what he wants in a corporate culture and in leadership, particularly valuable insights as the Nets pursue a new head coach.
“A strong corporate culture means that you identify the mission of the company,” said Tsai. “You see the direction of the company very clearly and you love working with your colleagues, You love your boss, you love your colleagues.
“I think that has always been the Alibaba culture. We have a saying, ‘work happily, live seriously.’ Everyone talks about work life balance but why does it have to be a dialectic. When you come to work you should be happy to be among friends.”
It may not apply to Tsai’s sports holdings, but Alibaba has been criticized in the past for its “996 practice,” that is having employees work 12 hours a day — from 9:00 a.m. to 9:00 p.m. six days a week.
As for leadership, Tsai laid out several requirements, topped by giving employees immediate feedback, not waiting for some arbitrary timeframe.
“Most important thing about a good boss is that you give immediate feedback. Feedback can’t be a quarterly review thing, a year-end review thing. Feedback has to be immediate. People need to know if they did something that wasn’t quite right or they didn’t apply the full effort. They need to know right away.”
Other aspects of leadership that are important to him, Tangen asked?
“I think humility. You have be humble. you have to be willing to admit mistakes. The other thing is that you can’t pretend to be the smartest person in the room always. Sometimes, people are looking for that leadership. You want to come up with your own good idea. That can’t be all the time because you’ve got to let your people, the people that report to you. come up with their own ideas. otherwise you kill innovation.”
Tsai also talked extensively about how he became an NBA owner, joking as he has in the past that the “socialist” aspect of the league with its shared revenues designed to create an even playing field appealed to him. Indeed, there’s a “mechanism” in how the league works to ensure a profit, “that it doesn’t matter if you’re competitive or not,” he said.
“When Brooklyn Nets went up for the sale, this was in 2017, I really had no idea how to invest and be an owner of a sports team,” said Tsai. “Then I looked at the characteristics of the league, how the league shares economics. One of the great things about the NBA is that they have a very good collective bargaining agreement that splits the economics between the teams — the owners — and the players.
“The players are really providing value, right, so they should get their fair share of the economics and that’s all set out in the collective bargaining agreement. The other thing about the NBA is that all 30 teams — it doesn’t matter if you are competitive or not, there’s a mechanism for all teams, even the small markets, to be competitive and also make money.
“So there’s pretty good share of economics among the teams, For example, the TV rights — the NBA today gets something like $2.7 billion of national TV revenues every year, That gets split among the 30 teams evenly. That’s very different from the EPL (English Premier League) for example. So I thought those characteristics are almost like a little bit socialist, but it ensures that everybody that invests in the league will not lose a lot of money.”
The Nets have lost money in the past, with Forbes reporting that in 2023 Brooklyn was the only NBA club to lose money. Tsai has also told NetsDaily that the team is profitable if it doesn’t have to pay the league luxury taxes which he said he considers an investment in the future. Tsai has paid out a reported $323 million in luxury taxes since buying into the team. Separately, Tsai has personally paid out tens of millions of dollars to cover debts owed on Barclays Center construction bonds since the arena profit hasn’t been great enough to cover those costs.
The Nets owner added another aspect of his particular situation is that the team is based in New York, making the Nets a “crown jewel” of the league.
“And the other thing ... Brooklyn, right?. We’re in New York City, where else and how else can you get an opportunity that is kind of like a crown jewel, being in a big city in a big country with one of the most popular sports in the world.
“It’s absolutely fun. I love going to games.”
Tsai spoke as well about the geopolitics of the U.S. and China’s often testy relationship including how U.S. restrictions on chip exports had slowed China’s artificial intelligence efforts, but added that he thought China would likely catch up in as little as two years.
