Los Angeles Clippers' Sponsors Abandoning The Team

This should be the time of year when the NBA is at its highest ebb thanks to the playoffs. Instead, the league is having to deal with an embarrassing situation regarding one of their owners (Donald Sterling of the Los Angeles Clippers) that is already causing significant damage to the league's brand.

By now you have all heard the story about Sterling, his ex-girlfriend and comments from the Clippers' owner that were caught on tape and released by TMZ. Thanks to social media and the 24 hour news cycle, the comments quickly made their way to every corner of the globe within mere seconds. 20 years ago, this scandal may have been averted by a high-powered team of lawyers and a quick settlement offer - in this day and age, news gets out very quickly and has basically no hope of being contained.

Many of the league's biggest stars from the past and the present, including LeBron James, Michael Jordan and Magic Johnson, have spoken out against Sterling in recent days. The general consensus is that Sterling needs to be stripped of his team, as his continued involvement in the league would do irreparable harm to the NBA and the game of basketball in general.

The Clippers' players showed their own dissatisfaction with their owner before their playoff game last night, as they stripped their warmup suits and piled them at center court to reveal their warm-up shirts that had been flipped inside-out. There was talk of a boycott before the game as well.

Sponsors are starting to flee the Clippers as well, with Virgin America and CarMax saying that they are ending their sponsorships with the team, while Kia Motors and State Farm said that they have suspended their deals with the franchise.

Adam Silver, who was appointed as the new Commissioner of the NBA just a few short months ago, now has to deal with the first major crisis as the head of the league. There is no doubt that Silver is currently trying to sound out the other owners to see what steps should be taken. Something will obviously happen, but what will the league do? Issue crippling sanctions against the Clippers? Force Sterling to sell the team?

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Prior to this season getting underway, the Clippers were the league's 13th most valuable franchise with a total value of $575 million. The team, which has been on the upswing over the past couple of years due to players like Chris Paul and Blake Griffin, had seen their value increase by 34% from the year before. The Clippers were solidly profitable last year, with operating income of $15 million on revenues of $128 million (Source: Forbes.com)

The franchise was a long suffering one and had finally turned the corner - at least until this past week. Now, the Los Angeles Clippers brand (as well as the NBA brand) is getting savaged on a daily basis, and Sterling is watching as the value of his franchise is dropping precipitously.

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This may seem like an unusual article to feature on this site, but the NBA is a multi-billion dollar brand that is enjoyed by millions of people across the world. From a business perspective, this continuing saga is going to be very interesting to watch.

Filed under: General Knowledge