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PayPal is cutting off its business relationship with the Phoenix Suns in light of an investigation into team owner Robert Sarver’s conduct.
Earlier this week, Phoenix Suns and Mercury owner Robert Sarver was suspended by the NBA for one year and fined $10 million following an investigation into his workplace conduct going back over a decade that focused on sexual harassment and a tone of misogyny and racism. Many perceived that punishment to be incredibly light given the context of the report’s findings.
Here is a good summation of what is inside the report from Zach Lowe on ESPN’s The Jump:
The NBA went about as far as it could with the suspension. The financial hit is the maximum the NBA can fine Sarver per its bylaws. Many hoped, given what the report found, that the punishment on a suspension would look more like the NBA’s ban of Donald Sterling, former Clippers owner who was banned for life from the NBA for racist comments and acts.
It’s been speculated it would take secondary and tertiary financial hits via sponsorship backlash for Sarver to end up out of the league, which at this point will likely need to come voluntarily. Well, as of Friday, it’s starting.
PayPal ends relationship with Phoenix Suns
Sponsors have a lot of indirect say in this situation by continuing to engage in a relationship with the Suns or not. PayPal, who was the team’s jersey patch sponsor, has decided to end its relationship with the Suns as long as Sarver is in the picture.
Here is what their press release said:
“PayPal is a values-driven company and has a strong record of combatting racism, sexism, and all forms of discrimination. We have reviewed the report of the NBA league’s independent investigation into Phoenix Suns owner Robert Sarver and have found his conduct unacceptable and in conflict with our values. PayPal’s sponsorship with the Suns is set to expire at the end of the current season. In light of the findings of the NBA’s investigation, we will not renew our sponsorship should Robert Sarver remain involved with the Suns organization, after serving his suspension.
“While we strongly reject the conduct of Robert Sarver, we remain supportive of the team, its players, and the experienced and diverse talent now leading the organization, including: Head Coach Monty Williams, General Manager James Jones, Assistant General Manager Morgan Cato, and Senior Vice President of People and Culture Kim Corbitt.”
It’s important to note that the relationship was set to contractually expire after this season, and it is not ending until the contract itself is up, giving the Suns plenty of time to find a new jersey sponsor.
More companies following PayPal’s lead with Phoenix Suns will determine if Robert Sarver stays
Businesses run a reputational risk by continuing to engage with outside firms that don’t align with their own morals and values. The content of Sarver’s report isn’t something most companies would want to be associated with.
Firms will need to determine whether or not they are OK with continuing to engage with the Suns after this. Courtside advertisements, arena advertisements, etc. all play a part in team revenue, and enough sponsors refusing to engage with the Suns as long as Sarver is in the picture could force him to sell the team.
Reverend Al Sharpton commended PayPal but said more companies need to take a stand and suggested companies should exercise the morality clauses commonly found in corporate contracts.
Things could start moving quickly here regarding the formal public backlash for the minimal NBA punishment.