State Farm, CarMax, Virgin America, Kia halt Clippers sponsorships as Donald Sterling faces allegations of racism
Apr 28, 2014, 1:03 PM EST
The NBA is limited in the scope of the punishment it can hand Donald Sterling – we’ll soon know what the league is doing – but the Clippers’ sponsors don’t face the same restrictions.
We don’t know what each sponsor’s contract stipulates, but it appears at least two have distanced themselves from the Clippers to varying degrees:
I’d guess the Clippers and each of their sponsors have similar, if not the same, langue on the sponsors ending their payments. If so, I expect more to follow CarMax and State Farm out the door. It’s bad business to be associated with Sterling, even if the allegations against him have not yet been proven true.
Updates: Virgin America has followed.
If there’s a way to persuade Sterling – and his fellow owners – to act, it’s through their wallets.
As we’ve repeatedly said, getting Sterling to sell the team will not be easy. However, if he’s making less money from the team and a potential buyer could make more by bringing back the sponsors, that would push the needle in the direction of a sale. As much as he enjoys the fame of owning an NBA team, he’s also notoriously cheap. There’s no telling how he’d balance those two priorities if they butted heads.
And if the Clippers are losing opportunities to make money, the league is losing opportunities to make money. That affects every owner.
None of this will change what the NBA can do about Sterling, but it might change what the league will do and it might change what Sterling will do.
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