Created on Monday, 28 April 2014 Written by MARLEY JAY, AP Business Writer
NEW YORK (AP) — Advertisers are backing away from the Los Angeles Clippers after racist comments attributed to the NBA team's owner.
FILE - In this file photo taken Monday, Dec. 20, 2010, a car drives past the CarMax sign at the dealership in Oak Lawn, Ill. CarMax on Monday, April 28, 2014 said it is ending its sponsorship of the NBA's Los Angeles Clippers in the wake of racist comments attributed to team owner Donald Sterling. (AP Photo/M Spencer Green, File)
Used car dealership chain CarMax and airline Virgin America said Monday that they are ending their sponsorships of the Clippers in the wake of comments allegedly made by the team's owner, Donald Sterling.
A third sponsor, Kia Motors America, said it is suspending its advertising and sponsorship activities with the team. A fourth, insurer State Farm said it "will be taking a pause in our relationship with the organization."
Companies sponsor teams to capitalize on the feel-good nature of sports, but the incident highlights the fact that sponsorships carry a risk when the news turns negative.
Allen Adamson, managing director of research firm Landor Associates, said there's little benefit for brands to stick with the company.
"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."
Brands face a tough spot when they link themselves with teams or athletes that become mired in controversy. 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.
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 also said that suspending its sponsorship and ads with the Clippers does not affect its deal with Clippers star Blake Griffin, who appears in commercials for the car company.