Advertisers back away from NBA’s LA Clippers

MARLEY JAY, AP Business Writer
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Los Angeles Clippers players listen to the national anthem wearing their warmup jerseys inside out to protest alleged racial remarks by team owner Donald Sterling before Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on  Sunday, April 27, 2014, in Oakland, Calif. (AP Photo/Marcio Jose Sanchez)

Los Angeles Clippers players listen to the national anthem wearing their warmup jerseys inside out to protest alleged racial remarks by team owner Donald Sterling before Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on Sunday, April 27, 2014, in Oakland, Calif. (AP Photo/Marcio Jose Sanchez)

NEW YORK (AP) — Advertisers are backing away from the Los Angeles Clippers after racist comments attributed to the NBA team’s owner.

Mercedes-Benz USA said Monday its dealerships are ending their sponsorship of the Clippers in the wake of comments allegedly made by the team’s owner, Donald Sterling. Used car dealership chain CarMax, airline Virgin America, and the Chumash Casino Resort are doing the same.

Three other sponsors, Kia Motors America, energy drink maker Red Bull and hardwood flooring retailer Lumber Liquidators, said they are suspending their advertising and sponsorship activities with the team. Another sponsor, insurer State Farm, said it “will be taking a pause in our relationship with the organization.”

The Clippers declined to comment.

Los Angeles Clippers' Glen Davis, left, Jared Dudley, center, and Danny Granger watch from the bench during the second half in Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on Sunday, April 27, 2014, in Oakland, Calif. Clippers players wore their warmups inside out in protest of team owner Donald Sterling's alleged racial remarks. Golden State won 118-97. (AP Photo/Marcio Jose Sanchez)

Los Angeles Clippers’ Glen Davis, left, Jared Dudley, center, and Danny Granger watch from the bench during the second half in Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on Sunday, April 27, 2014, in Oakland, Calif. Clippers players wore their warmups inside out in protest of team owner Donald Sterling’s alleged racial remarks. Golden State won 118-97. (AP Photo/Marcio Jose Sanchez)

The incident highlights the risks that companies face when they make sponsorship deals. The deals can bring goodwill when things are going well, but brands face a tough spot when they link themselves with teams or athletes that become mired in controversy. Advertising experts say that once the bad news it out there, a negative association could have already been made in the eyes of consumers.

Allen Adamson, managing director of research firm Landor Associates, said there’s little benefit for brands to stick with their sponsorship deals in this instance.

“There’s some benefit in moving quickly,” he said. “You can always renew your sponsorship later, but the longer you’re linking your brand to a brand in trouble, the higher the risk.”

Paul Swangard, managing director at Warsaw Sports Marketing Center at the University of Oregon, said sponsorships like Carmax and Virgin America can be worth hundreds of thousands of dollars to millions, depending on terms of the agreement. He said many brands might be waiting to see what happens at the NBA’s press conference on Tuesday.

“The early indication is that this could be incredibly damaging to the franchise if things aren’t dealt with quickly,” he said

This isn’t the first time companies have had to consider whether to keep a sponsorship deal after a controversy erupts. Nike and other sponsors dropped disgraced cyclist Lance Armstrong after his doping scandal. But many sponsors stood by golfer Tiger Woods after he acknowledged infidelities and went to rehab for sex addiction.

Los Angeles Clippers' Jamal Crawford, second from right, argues with a fan during the second half in Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on Sunday, April 27, 2014, in Oakland, Calif. Clippers players wore their warmups inside out in protest of team owner Donald Sterling's alleged racial remarks. Golden State won 118-97. (AP Photo/Marcio Jose Sanchez)

Los Angeles Clippers’ Jamal Crawford, second from right, argues with a fan during the second half in Game 4 of an opening-round NBA basketball playoff series against the Golden State Warriors on Sunday, April 27, 2014, in Oakland, Calif. Clippers players wore their warmups inside out in protest of team owner Donald Sterling’s alleged racial remarks. Golden State won 118-97. (AP Photo/Marcio Jose Sanchez)

Sterling has come under fire for comments he is alleged to have made in a recorded conversation with a woman. Portions of that conversation were released over the weekend by TMZ and Deadspin, leading to a national outcry. The NBA is planning a news conference Tuesday on its investigation into Sterling.

“CarMax finds the statements attributed to the Clippers’ owner completely unacceptable,” Richmond, Va.-based CarMax Inc. said Monday in an emailed statement. “While we have been a proud Clippers sponsor for 9 years and support the team, fans and community, these statements necessitate that CarMax end its sponsorship.”

Bloomington, Ill.-based State Farm also described the remarks as offensive and said it will monitor the situation as the facts are sorted out. It will continue to run its Born to Assist ad campaign, which began in December 2012 and features Clippers point guard Chris Paul as himself and a fictional, mustachioed insurance-selling twin, Cliff Paul. State Farm said that campaign is part of its overall sponsorship of the NBA.

Kia’s suspension of sponsorship and ads with the Clippers does not affect its deal with Clippers star Blake Griffin, who appears in commercials for the car company.

 

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