All eyes will be on NBA Commissioner Adam Silver’s 2 p.m. EST press conference Tuesday when he addresses the Donald Sterling controversy. Among the issues Silver must confront is making sure the NBA doesn’t lose out on current and future sponsors, who understandably do not want to associate their brands with this issue.
Major companies such as State Farm Insurance, Kia Motors America, Virgin America, Red Bull, CarMax, Amtrak, Yokohama Tires and Corona, have in rapid succession, either suspended or ended their sponsorship deals with the Clippers. Businesses do not want to continue their relationships with the team owned by Sterling, at least until Silver takes decisive action.
Many of these companies also have sponsorship deals with individual Clippers players. Most notably is State Farm, which will continue to run advertisements with star point guard Chris Paul. The insurance company will still utilize the brands of Paul and the NBA, and only disassociate itself from the Clippers franchise. This strategy, which also could pertain to Red Bull and Kia, if either company continues to use Clippers forward Blake Griffin for its commercials, may place the league in a delicate position.
Fortunately for the league, none of its corporate sponsors have yet backed out. Silver, however, needs to ensure that his decision on Sterling will not trigger a negative reaction among them. Silver needs to contain the toxicity surrounding Sterling’s comments. He can’t let it spread to the league as a whole. If it does, it would have a detrimental effect that could ultimately follow Silver for the rest of his tenure.
With the NBA set to negotiate its next television rights contract this offseason, the last thing it needs following the playoffs is brand degradation from this fallout. If league sponsors such as Nike, Gatorade and Sprite discontinue their affiliation with the league, it would be much harder for Silver to promote a healthy brand to television broadcasting companies and basketball fans.
Additionally, if the issue lingers and stars speak out against Silver’s handling of Sterling, the ripple effect could cause lasting damage to the NBA. LeBron James expressed his outrage over the alleged racist remarks, stating “there’s no room for Donald Sterling in the NBA.” If James is also outraged about Silver’s response, companies that associate their brand with his name, such as Sprite and Samsung, may follow.
Silver’s predecessor, David Stern, was a master of maintaining the NBA’s strong brand during ugly incidents, such as the Malice at the Palace. His successor, just 85 days into his term, will need to achieve similar mastery in protecting the NBA’s brand in a time of crisis at tomorrow’s press conference, and beyond.