Yahoo Finance Live looks at PayPal's statement on its business ties with the Phoenix Suns and response to owner Robert Sarver's suspension.
- My play is PayPal, symbol PYPL. The fintech company is the jersey patch sponsor of the NBA's Phoenix Suns. But PayPal announcing today it would not be renewing its sponsorship with the team if majority owner Robert Sarver continues in his role, following the one-year suspension he has from the league for racist and misogynist remarks.
CEO and President Dan Schulman of PayPal said in a statement, quote, "PayPal is a values-driven company and has a strong record of combating racism, sexism, and all forms of discrimination." He called Sarver's conduct unacceptable and in conflict with PayPal values. The jerseys patch deal reportedly worth around $3 million a year, through 2023, PayPal though, problems before today, lost more than half their value this year alone. Shares down another about 3% on the day.
This is where it starts, Rachelle. I don't think this is a huge problem for the Phoenix Suns. NBA teams do not have issues in this climate getting sponsors for their jerseys. My presumption is PayPal probably wants out of that deal. But when private companies begin to put pressure on teams, then you could see some change at the top. The league can't really do much beyond the suspension.
- And I mean, we do, it does draw comparisons when you look at the NFL and what happened with Dan Snyder, a lot of people wondering what sort of consequences should this come with. But once you have sort of corporate sponsors getting involved versus sort of just your moral compass, that's when it starts to bite. That was really what ended up motivating Dan Snyder when he had to change the name of the Washington team, as it was the Redskins before, to end up being the Washington Commanders.
So, obviously, that pressure, but it's interesting you mentioned perhaps PayPal are using this as a way to get out of this. It's well, it's an open door now. So we'll have to see just how aggressive they plan on being on this.
- Yeah, I think the big takeaway, you guys are exactly right, it's really the private sector placing pressure and enforcing some change potentially here. So it will be interesting to see how the team does respond. But I agree, I mean, it's not much of a stock story I guess so much as in terms of the reaction of shares today. But I think more broadly speaking, what this could mean here down the line, if we do see more private companies voicing their opinion and enacting change, potentially at higher levels.