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.
Four other sponsors, Kia Motors America, energy drink maker Red Bull, hardwood flooring retailer Lumber Liquidators and Yokohama Tire, said they are suspending their advertising and sponsorship activities with the team. Yet another sponsor, insurer State Farm, said it "will be taking a pause in our relationship with the organization."
The Clippers declined to comment.
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