The Donald Sterling story is a hard one to ignore, even if you’d want to. Luckily for all of us, Adam Silver put the hammer down earlier earlier today and suspended the racist (soon-to-be former) Clippers owner from the NBA for life and fined him the maximum $2.5 million. Here’s some of a recent article we published over on The Daily Beast on the subject:
Every team has a defining moment during the season. For the Los Angeles Clippers, that moment is likely Tuesday night. With the series against their cross-state rival the Golden State Warriors knotted at two games, a loss will be tough to recover from. A win would keep them on track to reach their first NBA finals in team history. The game also marks a defining moment for the Clippers organization—it will be the first time the Clippers play at the Staples Center since their owner, Donald Sterling, was exposed as a racist. Depending on how NBA Commissioner Adam Silver handles his first major crisis, the Sterling scandal could be either the beginning of the end of the Clippers or the final step on their ascendancy to the throne of Los Angeles basketball.
Even with the third-best record in basketball, the Clippers still struggle for the hearts and wallets of Los Angeles. With their 57-25 record and two of the most dynamic players in the NBA, the team had only the eighth-most expensive NBA tickets, four places behind Staples Center venue-mates the Lakers. While that may be hard to fathom, the 20 percent discount the Clippers offer represents a major step forward for L.A.’s “other” basketball team. Just four years ago, the average price for Clippers tickets on the secondary market was less than half that of the Lakers. This season, even with a superior team and their best chance at postseason success, they still lost the battle for attention and dollars to a 27-win Laker team. Of course, the Clippers now have more attention than they could possibly want, and what happens in the next few days could not only make or break their season but also their viability as a franchise.
In the last 48 hours, at least five sponsors have pulled out or suspended their support of the team, including CarMax, State Farm, Kia, Virgin America, and Red Bull. The total impact of those pullouts could be as high as $20 million a year. According to Forbes, the Clippers generated $128 million in revenue last year, so losing $20 million would be a 15 percent hit. If the NBA lets Sterling keep ownership of the Clippers, however, that loss could just be the start. Ticket sales, concessions, and swag—all revenue generated from people attending games—account for another $75 million, and despite a modest increase in prices for Game 5, fans may jump ship in 2015, leaving the organization with a revenue hole that can’t be replaced.