Baller Mind Frame

Advertising ramifications for the Los Angeles Clippers

Image courtesy of Keith Allison/Flickr.

Image courtesy of Keith Allison/Flickr.

We’re all familiar with NBA Commissioner Adam Silver’s announcement to fine and permanently ban David Sterling in wake of his publicized racial comments, and our opinions on the severity of the punishment have varied. However, Silver’s punishment wasn’t the only outcome that resulted from those comments, as numerous sponsors have discontinued their support of the Los Angeles Clippers organization.

According to CNN Money, CarMax was the first sponsor to drop the Clippers. The Fortune 500 company released a statement asserting that Sterling’s comments were “completely unacceptable.” The statement continued, “These views directly conflict with CarMax’s culture of respect for all individuals. While we have been a proud Clippers sponsor for nine years and support the team, fans and community, these statements necessitate that CarMax end its sponsorship.” State Farm also pulled their sponsorship, even though one of their main spokesmen is the Clippers’ starting point guard, Chris Paul. The Fortune 100 insurance giant did say that they would continue to work with Paul. Sprint, another industry giant, halted their marketing activities as they relate to the team, even though they’re the official telecom company for the NBA.

It’s not just the national companies that are dropping the Clippers. The world’s largest poker room Commerce Casino and Hotel in Los Angeles, which boasts a staggering 160 poker tables, discontinued their sponsorship. This is a huge blow, as the Commerce Casino is a massive local sponsor. And it’s just not a local hotspot, it has hosted numerous World Poker Tour (WPT) events. The most notable of which is the LA Poker Classic, which has taken place at the Commerce Casino for 22 years. The WPT LA Poker Classic has become one of the most notable poker events in the world. Annually, people can see the likes of Gus Hansen, Daniel Negreanu, Scotty Nguyen, and most notably Phil Hellmuth, who showed up a fashionable four hours late for the 2010 Poker Classic, according to PartyPoker. Talk about self-confidence, huh?

Red Bull yanked their support for the team for a whopping four days, before restructuring the deal. The new deal, according to Nancy Armour of USA Today, requires the Clippers to donate 50% of the partnership money to charity. Red Bull is expected to retain Blake Griffin as a spokesman. Kia had also pulled their support for the Clippers, however, following Silver’s decision the Korean automotive maker decided to reinstate their sponsorship, according to the Washington Post. The decision also stopped Korean tire manufacturer Kumho and Adidas from pulling their support.

The other sponsors that dropped the Clippers include Corona and Yokohama Tires, and neither have recommitted.

Altogether, the loss of sponsors can cost the Clippers organization loads more than the $2.5 million fine imposed by the NBA commissioner. If they cannot find replacement sponsors, then there’s no telling how much the statement will cost the organization. It’s estimated that the Clippers typically bring in over $10 million annually from sponsoring activities.

That $10 million sum may not sound like much when we’re talking about professional sports, and a team that’s valued at $575 million. But when the team’s operating income was just $9.1 million in 2013, then we’re talking about a sizable blow. If the Clippers organization cannot repair relations with those sponsors, or find suitable replacements, we could see an exodus of talent leaving LA, which could reshape the landscape of the NBA.

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