Bloomberg Businessweek - USA (2020-01-27)

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findingbargain-binplayerstodevelopuntiltheteamhad
roomundertheleague’ssalary-caprequirementstogoafter
starfreeagents.Hisplanworked:LastApriltheNetsmadethe
playoffsforthefirsttimeinfouryears,anda fewmonthslater
theysignedsuperstarsKevinDurantandKyrieIrving.Even
withDurantlikelysidelinedallseasonwitha rupturedAchilles
tendonandIrvingbattlinga shoulderinjury,theNetsarein
thehuntforanotherplayoffberth.Oncebotharehealthy,the
teamis expectedtocompeteforchampionships.
Thebuzzoverthesigningsstillhadn’tsubsidedwhen
Morey’stweetlanded.Asit happened,theNetsweresched-
uledtoplaya pairofexhibitiongamesagainsttheLosAngeles
LakersthefollowingweekinChina.ThatMondaymorning,
beforeboardinga flightfromHongKongtojointheteamin
Shanghai,Tsaiwrotea “lettertoallNBAfans”andposted
it onFacebook.“WhenI boughtcontrollinginterestinthe
BrooklynNetsinSeptember,”hebegan,“Ididn’texpectmy
firstpubliccommunicationwithourfanswouldbetocom-
mentonsomethingaspoliticallychargedandgrosslymisun-
derstoodasthewayhundredsofmillionsofChineseNBAfans
feelaboutwhatjusthappened.”
Theletter,whichcastMoreyasignorantandhistweetas
damaging,drewcriticismintheU.S.andHongKongfrom
thosewhosawTsaiasfollowingtheChinesegovernment’s
line.Inhis 25 yearsofshuttlingbetweenChinaandtheU.S.,
arranginghighlycomplicatedandlucrative connections
betweenthetwo, Tsai’smulticultural,intercontinental
identity—Taiwanese-born,Mandarin-speakingIvyLeaguegrad,
Californiasportsdad,HongKongdweller,Canadiancitizen—
hadalwaysbeenkeytohissuccess.Suddenlyhefoundhimself
caught,ina verypublicway,betweenBeijingandBrooklyn.

T


sai’sgrandfather,RuchinTsar,lefttheChinesemain-
landin1948,partofanexodusofmillionsfleeingthe
communistsasthecountry’scivilwarended.Tsar
hadbeenanadvisertotheKuomintang(KMT)governmentof
nationalistleaderChiangKai-shek,who,intheaftermathof
thewar,establishedtheRepublicofChinaasa one-partystate
inTaiwan.FiveyearsafterthefamilyarrivedinTaipei,Tsai’s
father,Paul,enrolledatYaleLawSchool,goingontobecome
itsfirstTaiwanesegraduatein1957.Hereturnedhometotake
a jobintheMinistryofEconomicAffairs,becoming,Tsaisays,
thechiefdrafterofa 1960lawthatopenedTaiwantoforeign
investmentandhelpedusherinanexport-driveneconomic
boomthatlasteddecades.In1965,theyearafterJoewasborn
asthefirstoffourchildren,hisgrandfather and father estab-
lished Tsar & Tsai, a law firm that became a go-to shop for
international clients looking to do business in Taiwan.
“I’m Chinese,” Tsai says. “I grew up in a very culturally
Chinese environment.” He spoke Mandarin as a child, and his
parents talked about returning to visit the mainland. At the
time, the KMT saw itself as China’s rightful ruler, a status then
recognized by most of the West. “My upbringing is always that
there is one China,” he says.
Tsai’s parents sent him to boarding school in suburban New

Jersey when he was 13, avoiding a ban on boys 14 and older
leaving Taiwan, lest they escape mandatory military service.
He spoke little English when he arrived at the Lawrenceville
School, which counts Malcolm Forbes, Michael Eisner, and for-
mer Salomon Brothers Chief Executive Officer John Gutfreund
as alums. “I can imagine that was quite head-spinning for him,
to ship overseas and plop down in the middle of this presti-
gious school with a decidedly East Coast, preppy vibe,” says
Pete Maruca, a former classmate who now runs a residential
construction company in Pennsylvania.
Tsai longed to be one of the guys at what was then an all-
boys school. To bridge the cultural gap, he turned to sports.
“Sometimes, if you couldn’t really communicate and you
looked different, it was a little bit humiliating,” he says. “The
only equalizer was if I could kick their ass on the football field.”
Despite his size—5 feet 9 inches and about 160 pounds—he
made the team as a freshman. “He got instant credit for try-
ing,” says Maruca, a fellow linebacker.
The following spring, after being cut from baseball, Tsai
went out for lacrosse. He made it, then played on the varsity
squad as a junior before being cut as a senior. “I got a little bit
complacent,” he says. The failure still stung when he arrived
at Yale in the fall of 1982. He tried out for lacrosse there and
earned a spot as a walk-on. Yale was one of the worst teams
in the Ivy League, but a new coach had brought in a strong
class of recruits, mostly public-school kids from Long Island.
One of them, William “Mickey” Harley III, remembers being
surprised by Tsai’s skill and toughness. “He wasn’t the big-
gest guy, wasn’t the fastest guy,” says Harley, who now runs
a blueberry farm on Long Island, “but he stuck his nose in
thereandplayedhard.”
TsaistayedatYaleforlawschool,oftenplayingpickup
basketball with fellow students, including future Supreme
Court Justice Brett Kavanaugh. (“I didn’t know him that well,”
Tsai says.) Upon graduation he took a job as a tax lawyer at the
white-shoe New York firm Sullivan & Cromwell, then became
general counsel for the private equity fund Rosecliff Inc. He
later moved to Hong Kong to work for Swedish holding com-
pany Investor AB, scouring the Asian markets for private
equity deals.
In 1999 a friend tipped him off about a charismatic, eccen-
tric entrepreneur named Jack Ma, who wanted to build an
online marketplace for Chinese factories. That May, not long
after Ma founded Alibaba from his apartment in Hangzhou,
Tsai went there to meet him. The two became fast friends.
Born the same year, both had grandparents who’d been in
the KMT before the People’s Republic was founded. Both
had learned English at a young age and were quick to absorb
Western influences.
After meeting Ma, Tsai told his boss at Investor that in his
spare time he wanted to help Alibaba get off the ground. “This
is when the internet was just starting,” Tsai says. “I caught
the entrepreneurial bug.” He soon drew up papers to incor-
porate the company, becoming one of 18 founding partners,
then joined Ma on a trip to Silicon Valley to pitch venture

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