For people who don't know who he is, please give us an introduction to Joe Tsai.
He's the owner of the Nets and he's now chairman of Alibaba. We like innovation from the bottom up.
Alibaba just dropped their secret weapon, Qwen 2.5 Max. Alibaba surged 14.12% overnight, beat estimates on nearly every metric. A massive rally alone this year, adding about 100 billion to the stock's value. You have to have a growth mindset when you compete.
Ladies and gentlemen, please welcome Joe Tsai.
Hey, my man. Good to see you.
Good to see you, brother.
Good to see you, David. How are you?
Nets and the New York Liberty.
And the New York Liberty. Exactly. It's not easy running a team, is it?
Not easy at all because a basketball, any professional team is both a business and also it's an institution. You need to keep the fan base happy. So there's sort of this church and state element.
Yeah. It's almost like running a news organization.
Yeah, there it is. Can we maybe start with the WNBA and we can shift to business and we can shift to basketball, but I think Caitlin Clark is out for the season and there's just been a lot of controversy and attention that the WNBA is getting. What has it done right? What has it done wrong? Has the league been doing enough to protect her as a star in the face of the league? It's been almost a microcosm for just a social discussion. Do you want to just talk about that as what you see?
Caitlin Clark definitely had an effect on the WNBA. All the metrics went up. So, this was last season, right, when she first came into the league from college and we've seen all of our metrics from viewership, ticket sales, sponsorship, everything went up like almost 4x.
4x, right? I mean, that's incredible.
That's incredible. So, the economic impact that she's made to the league is extraordinary.
Undeniable. But because of who she is, you know, she's a little bit of a different kind of player. You know, she is a point guard. She's a smaller player. The knock on her was was she going to be able to withstand all the physicality of the league, and she's proven that she's able to do that. Unfortunately, there's been, I think it's always good to have rivalries, right? You know, she has this rivalry with Angel Reese that dated back to college. But some people would like to pit it as a kind of a racial thing or is it, you know, this or that. I think we need to look past that and just look at the skill set that's being brought into the league now. We have so many great college players. I mean, the rookie of the year potential candidate is Sonia Citron. Have you ever heard of her before she came into the league? I mean, no, she I think she just broke the record for the highest three-point shooting percentage in the league. So, you know, you see tremendous amount of talent and I think you ask what have they done, right? I don't, I think it's a matter of just a confluence of good things coming into the league.
And what about the NBA? So, you guys did just an enormous...
Yeah, just let me, let me just... But the one thing that's really changed that is prior to the Caitlin Clark season, your average fan base that watches ESPN, basically you guys are not watching women's basketball. Maybe some of them follow college, but certainly not the WNBA, right? But now your average ESPN fan base, they are watching, the mainstream sports fan base are watching the...
I think she's a... I have an observation about this and you and I are old school basketball heads, you know, watching having watched the 80s and 90s and Patrick Ewing and Charles Barkley. It's more physical. They're tougher in the WNBA. And every time LeBron goes up and he gets fouled and he's just and he's flopping all over.
How does he do it? You know, it's a foul. It's a foul. So maybe you could comment on LeBron being like...
Or just generally the NBA product actually.
Yeah, the NBA product and then they're so tough and they're throwing each other around. It's a better game. The NBA product is great.
I don't think it's fair to compare whether the men's league is more or less physical than the women's league or more one the other. I mean they're both very physical. I mean if you are sitting there on the floor you are watching physicality.
Sure. And also athleticism, right? But the game has, you know, the NBA has this committee called the competition committee. So I got put on the competition committee. They call me and they say, 'Joe, we want, you know, want to be on the competition committee and you know, it's about rules about, you know, like what does this transition take foul?' So the committee is every season they make these tweak changes. They make changes to refing to make the product better. I mean, when I got the call, I'm like, you want me to sit on the committee with Jason Kidd, Chris Paul, and Coach K? Like, what do I know about basketball that can, you know, really be smarter than them? But what I've seen is I've said to Adam so the competition committee should be called the product committee because that is the product the fans see on the floor. If you change, let's say if you change the three-point line...
That is a product decision, not competition.
Should they? Is it too...
I don't think so. I don't think so.
When you watch the Boston Celtics throw up 43 threes in a game, you think it's a good product?
I think it's a great product because there are 18 different ways you can throw up 43 threes in a game.
Okay, let's transition to Alibaba for a second. It's an incredible journey you and Jack Ma and the whole story has, it's I mean it's written in books and there's just tremendous lore but can you take us back to your mindset? I mean I think we've heard it's well documented Jack's mindset but how you got involved what you were thinking in that moment the risk you were taking.
I was just mesmerized by Jack's personality. Every people see the public side of Jack which is very charismatic but what I saw was he was able to instill faith in people. I mean, he had a, when I walked into his apartment, there were like 12 to 15 sort of very young people roughly, you know, students that were just coming out of college and Jack was kind of the teacher that's 10 years older and he's able to communicate. He's able to paint a very strong vision. That was the part that I really signed on to. His ability to lead is an amazing ability. And you know he's a teacher by training. He taught at Zhejiang University. He taught English actually. You know teachers in a way make natural leaders because a you have to communicate well and b you can identify talent. I think a lot of teachers love to see their students and say oh this kid is gonna do really well. So they write a recommendation they do whatever. And also teachers have enough humility that they're willing, they're very happy if their students go off and then they come back and become more successful than they are. And in building a company you need to be able to accommodate all sorts of people that are smarter than you are. And that's really important.
There was a phase I guess in the maybe the early 2010s where it was a lot of it felt like tremendous freewheeling capitalism in China where there was just a Cambrian explosion of incredible entrepreneurs yourself and Jack and all these others, Pony. And then I think almost starting with the Ant IPO it things changed a little bit. Can you walk us through the dynamics of how that changed and then I think it all kind of leads to, you know, a lot of foreign direct investment into the Chinese ecosystem has changed pretty dramatically. Just give us a sense of what has happened over that arc that you've been in it and working in it, observing it.
Alibaba has been around for 26 years. I would say the first 15 years were it was a complete free market kind of, you know, way of growth and we built a lot of businesses organically and then we went into a phase where there was extreme competition, everybody wanted to do e-commerce why is because if you have traffic online e-commerce was the best way to monetize your traffic and today in today's market we have five or very very strong competitors including the parent company of TikTok, ByteDance. They are doing e-commerce. They're not known as an e-commerce company but they are one of our fiercest competitors. So there's a, you go through a period of extreme competition and then the government felt that this sector has gotten out of line a little bit. First there's too much competition and then there are some platforms that have exhibited monopolistic behavior. So then there was a, you know, people may call it a crackdown whatever more regulations came in. Some of the regulations are very good actually. They protected privacy, anti-monopoly type regulation and now we kind of are in a new normal where we believe that the regulatory environment is more predictable. We know what the red lines are and we know where to go and where not to go and it's actually made a better operating environment because of the predictability of it.
On a geopolitical level, it seems to be the rhetoric in the United States, what they keep drilling into Americans is to look at China as an existential threat to America, that we're rivals, that we cannot operate and lead the world to prosperity. What do you think?
I don't agree with that view of the world. I'd be interested in your view, David.
