Tuesday, April 29, 2014

Why Clippers sponsors were so quick to exit - CBS News

All it took was one day for the Los Angeles Clippers to lose all of its corporate sponsors. This must be some kind of record.

More than a dozen companies have ended their relationships with the National Basketball Association team or have suspended activities after owner Donald Sterling was allegedly recorded making racist remarks in a phone conversation. Over the weekend, a recording of his comments went public on TMZ and other sites.


Corona, the beer company thought to be the last major sponsor holding out, said Monday afternoon it would suspend its agreement with the team until the NBA completes its investigation into the issue.


"Like everyone else, Corona is appalled by the comments allegedly made by the owner of the Los Angeles Clippers," Corona parent Constellation Brands said in a released statement. "These comments run counter to the type of brand Corona aspires to be."


Sterling reportedly told his girlfriend not to bring black people to his team's games and not to post pictures with black people on Instagram.


The fast-moving drama had just about everyone weighing in over the last two days. Basketball legend Michael Jordan, who now owns the Charlotte Bobcats, said he was "completely outraged." He added: "I'm completely disgusted that a fellow team owner could hold such sickening and offensive views."


The coach of the Golden State Warriors -- whom the Clippers play Tuesday in game five of an NBA playoff series -- said fans should boycott the game. The R&B singer Tank will not perform the national anthem as planned at the game. LeBron James, Magic Johnson and even President Barack Obama also weighed in.

The Clippers said goodbye to millions of dollars in sponsorship money Monday. Here's a quick roundup of who bailed on the team, according to news reports:


State Farm: The first sponsor to act, said it's "taking a pause" in its relationship with the team. The insurer spent $1.2 million this year on promotions with the Clippers, The Orange County Register reports.

Mercedes-Benz: Dealerships are ending their sponsorship of the team.


Carmax: The used-car chain is ending a nine-year partnership. Its latest contract with the team was worth $1.05 million, The Register reports.


Virgin America: Ended its sponsorship deal worth $350,000, according to The Register.


Kia Motors America: Suspending its advertising and sponsorship.


Corona: Suspending its sponsorship.


Red Bull: Suspending its sponsorship.


Lumber Liquidators: Suspending its sponsorship.


Chumash Casino and Resorts: Withdrew its sponsorship. This is one of the Clippers' biggest sponsors, with a deal worth $2 million per year, The Register reports.


Sprint: Suspending its sponsorship.


LoanMart: Suspending its sponsorship.


Yokohama Tire: Suspending its sponsorship.


AQUAhydrate: Suspending its sponsorship.


Finally, Amtrak told The Huffington Post that although its sponsorship ended a few weeks ago at the finish of the team's regular season, the railway is trying to remove all advertising that may still be in use.


Why the rush for the exits? Because no marketer wants to dragged down by a person generating so much disgust and anger, experts say.


"You can always renew your sponsorship later, but the longer you're linking your brand to a brand in trouble, the higher the risk," Allen Adamson, managing director of research firm Landor Associates, told The Associated Press.


Steve Stoute, who represents State Farm as head of marketing firm Transition, said he was advising all of his brands to pull their sponsorships. "When you have things like this taking place, somebody has to stand up," he said on ESPN's Cowherd radio show.


It's unclear whether the sponsorship fallout will expand to the entire league. Civil rights activist Al Sharpton, irate that the league has not yet punished Sterling, has begun pressuring the NBA's sponsors to take action. "I'm totally outraged that they are stalling on this," Sharpton told Bloomberg.

Some of the NBA's major sponsors include Coca-Cola (KO), Anheuser Busch InBev (BUD), Nike (NKE) and American Express (AXP). So far, there doesn't seem to be a major effort to target these sponsors, but that could change in what has proven to be a very fluid situation. The league is promising a press conference Tuesday to update its investigation of the matter.


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