Clippers See Sponsors Flee as NBA Investigates Owner Remarks

The Los Angeles Clippers lost four sponsors and a half-dozen more suspended deals as the National Basketball Association called a news conference to address racist comments attributed to team owner Donald Sterling.

The NBA team’s sponsorship revenue is worth as much as $50 million in the Los Angeles area, according to a league marketing expert.

While the NBA said in a statement that it will discuss the investigation at 2 p.m. today in New York, some companies didn’t wait to sever ties with the Clippers.

Virgin America Inc., CarMax Inc., Mercedes-Benz and Chumash Casino Resort cut their sponsorships with the team, three days after the website TMZ posted the comments attributed to 80-year-old Sterling, which included remarks that he didn’t want his then-girlfriend bringing black people to his games.

State Farm Mutual Automobile Insurance, Kia Motors (000270) Corp., Yokohama Tire Corp., Lumber Liquidators Holdings (LL) Inc., Sprint Corp. (S), Toyota Motor Corp. (7203), Adidas AG (ADS) and Los Angeles-based sports drink company AquaHydrate Inc. said they would suspend their sponsorship deals with the Clippers.

“One, it offended their sense of decency and two, it offended the sense of decency of their clientele, who are going to be pushing back on them,” said William Sutton, a sports-marketing consultant who works with a half-dozen NBA teams.

Clippers sponsorship deals “could be as high as $30 million to $50 million in that market,” Sutton, the founding director of the University of South Florida’s sport and entertainment masters of business administration program, said yesterday in a telephone interview.

Companies’ Reactions

“While we continue to support the fans and the players, Virgin America has made the decision to end its sponsorship of the L.A. Clippers,” the airline said in an e-mailed statement.

State Farm, which counts Clippers All-Star and NBA Players Association President Chris Paul among its endorsers, said in a statement that it’s “taking a pause” in its dealings with the team.

CarMax said it’s ending a nine-year relationship with the Clippers and Kia Motors America said it was suspending its advertising and sponsorship activities with the club.

The NBA pledged to investigate “extraordinarily quickly” a recording on which, according to TMZ, Sterling told the girlfriend he didn’t want her to bring black people to his games after she posted a photo of herself with Hall of Fame player Magic Johnson on Instagram.

“CarMax finds the statements attributed to the Clippers’ owner completely unacceptable,” the largest U.S. auto dealer by market valuation said in a statement. “These views directly conflict with CarMax’s culture of respect for all individuals.”

Kia Statement

Kia Motors said in a statement that the comments attributed to Sterling were “offensive and reprehensible, and they are inconsistent with our views and values.”

Mercedes-Benz dealers ended their sponsorship of the Clippers effective immediately and issued a statement calling the comments “deplorable and completely against the values we promote as an organization.”

Passenger rail line Amtrak said in a statement that its sponsorship with the Clippers expired at the end of the NBA regular season and it would monitor the investigation as it plans for 2014-15.

Civil rights activist Al Sharpton said he would target marketing and broadcast partners as well as advertisers in an effort to pressure the NBA into imposing a punishment.

Fans’ Dilemma

Johnson, part owner of baseball’s Los Angeles Dodgers, said Sterling should be forced to sell the Clippers.

Clippers coach Doc Rivers said he understands fans “are in a dilemma” as the team prepared to host the Golden State Warriors in Game 5 of their playoff series tonight, and asked for their support.

“We want them to cheer for their players and their team. It will always be their players and their team,” he said in a statement released by the Clippers. “This is a very emotional subject, this is personal.”

To contact the reporters on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net; Mason Levinson in New York at mlevinson@bloomberg.net

To contact the editors responsible for this story: Michael Sillup at msillup@bloomberg.net Jay Beberman

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