When Sponsorship and Racism Collide

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Corporate sponsors are distancing themselves from the Los Angeles Clippers after owner Donald Sterling’s racist comments. But with Sterling on the way out, how should they react?

The proverbial has hit the fan in Hollywood, and sponsors scrambled to evacuate over the Sterling controversy.

Sponsors of the Los Angeles Clippers were quick to strike after an audio recording of team owner Donald Sterling leaked last week containing racially insensitive commentary. More than a dozen corporate sponsors ended or suspended their relationships with the team in the days after this story broke.

Controversies like this one are nightmares for marketers and brand reps. Mercedes-Benz, CarMax, Virgin America, Kia and State Farm quickly put their public relations teams to work, citing the comments as offensive and (most importantly) inconsistent with the views and values of their respective brands. While this step is important due diligence in terms of damage control, cutting ties altogether sends an even stronger message – a sentiment certainly on the mind of NBA Commissioner Adam Silver when he announced that Sterling would be banned from the league for life and likely stripped of his ownership of the team.

The Clippers are one of the most exciting teams in the NBA in one of the largest markets in the country. Corporate partnership with the team has certainly been fruitful and could be again in the future, but swift action on their behalf may prove to be the best move for these aforementioned sponsors. Actions most always speak louder than words, and this situation was no exception.

Some of these companies may still be on the hook for sponsorship dollars, but promptly and publicly cutting ties with the scandal will save them even more in the long run. The longer you hold onto a sponsorship in a situation such as this, the greater the risk for decreasing public sentiment toward your brand. In an instant, years of work to promote brand recognition and loyalty can be negated. These negative associations can be extremely difficult to reverse.

So as a sponsor, are you ready for a scenario like this? Do you have a plan in place to save your brand from its divisive demise?

Performance Research has conducted extensive research on this very topic and presented details of their findings at IEG’s 31st Annual Sponsorship Conference in March.

Once such controversy detailed in the presentation was the Lance Armstrong/LIVESTRONG dynamic after Lance admitted to using performance-enhancing drugs after years of denial. Corporate sponsors including Oakley and Nike severed ties with Armstrong directly, but continue to support the LIVESTRONG foundation’s efforts. PR found that public opinion of Armstrong decreased after he admitted to doping, but the majority of respondents actually had an improved opinion of the LIVESTRONG foundation. In this case, sponsors were able to cut their losses by simultaneously ending their relationships with Lance Armstrong and increasing affiliation with a brand on the rise in LIVESTRONG.

MORE from IEG Presentation: Taking a Stand– How Consumers React When Sponsorship Turns Into Criticism And Controversy

NBA commissioner Adam Silver’s swift and decisive actions regarding Sterling certainly turned the tables and may very well present the Clippers organization in a stronger position than ever. Sponsors now need to rethink their plans to abandon their partnerships with the Clippers.

Both Kia and State Farm will continue to run national advertising campaigns centered on Clippers stars Blake Griffin and Chris Paul. The “Griffin Force” and “Cliff Paul” spots allow these brands to continue to cash in on the success of the team without the risk of a direct corporate partnership with the Clippers organization.

Maybe other sponsors will follow their lead, or simply wait out the storm before rekindling their relationship with the team. We will certainly be watching to see how these brands handle their partnerships with the Clippers in the near future.

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