Just a year ago, Tencent Holdings Ltd. locked up one of the most coveted media franchises in the country when it paid $1.5 billion for five years of exclusive streaming rights to National Basketball Association games. A single tweet changed all that.

Now, the Chinese social media giant may have to suspend airing those matchups -- which drew half a billion viewers last year -- after Houston Rockets General Manager Daryl Morey triggered a media blackout in China by tweeting support for Hong Kong’s pro-democracy protests. That sums up a disappointing 2019 for a company that looked like it was back on track after a horrendous 2018.

The Houston Rockets were one of the most popular teams in China, but the controversy over the team's general manager tweeting in support of Hong Kong protesters has dragged into the regular season. (Gerald Herbert/AP)

At stake now for Tencent are billions of dollars in ad and subscription revenue, along with its strategy of becoming a go-to online destination for entertainment beyond gaming. Tencent was supposed to hit the comeback trail this year after a nine-month freeze on game approvals gutted its most profitable business in 2018. But a sharp Chinese economic slowdown, competition from up-and-comer ByteDance Inc. for internet traffic and advertising, and now tricky political considerations is snarling that recovery. That’s a key reason its stock has vastly under-performed arch rival Alibaba Group Holding Ltd. this year, creating a gap of more than $90 billion in their market valuation.

“One of China’s biggest companies, who does everything right politically, stands to lose billions due to the political issues outside of its control,” Mark Tanner, founder and managing director of Shanghai-based consultancy China Skinny. “We’ve seen how the company has toed the line with the gaming rules recently and I expect they will be even more careful with this one.”

Political issues aside, Tencent’s 2019 has not gone as well as investors anticipated. The company is projected to report barely any growth in net income when it announces September-quarter results Wednesday, because revenue growth is barely keeping up with the pace of spending on ever-costlier content and servers for its cloud and media services.

But things are approving in its core gaming business, which still yields the majority of Tencent’s revenue. Widely ridiculed at the outset because of built-in party propaganda slogans -- the military advised on the project -- and family friendly gore-free rubric, 2019’s Peacekeeper Elite evolved into a breakout hit approaching the scale of longstanding cash cow Honor of Kings.

Yet uncertainty shrouds the division as well. Earlier this month, state media reported that the nation’s publications regulator will cap online game playing time at 1.5 hours per day for children, a big demographic for Tencent’s mobile games.

The WeChat operator has lost $86 billion of market value since its April peak, and in October tested a key support level -- which would have precipitated a sharp and longer-term downtrend. At the time, trading floors were abuzz with talk about generally souring sentiment from investors in China, as well as concern that Tencent’s decision to resume live-streaming NBA games may backfire.

Longer term, the worry is that Tencent may be losing its golden touch.

ByteDance came out of nowhere in 2017 to humiliate the social media titan, betting presciently on the short-video craze that birthed its Douyin and TikTok apps and forcing Tencent to mimic its much smaller rival. ByteDance is now flooding the market with ad inventory, depressing prices for incumbents such as Tencent and Baidu Inc.

That’s important because Tencent looks at advertising as a potential growth catalyst, given its lower ad load relative to its rivals -- and ByteDance has shown that the Chinese company can’t predict every trend or potential rival.

The NBA brouhaha “places further pressure on Tencent’s advertising revenue. More broadly, Tencent’s advertising business faces structural declines in video advertising revenue and increased competition from ByteDance,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina.

(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)