When North Carolina passed a law in 2016 that requires people to use public bathrooms that match the gender that appears on their birth certificates, the state already had won the privilege of hosting the All-Star weekend that the National Basketball Association (NBA) would be putting on in 2017. The law prompted several companies to cancel events or conferences they had planned in the state; when the NBA cancelled the All-Star weekend, it was one of the most prominent and notable to do so, with repercussions for fans, sponsors, and teams in the league.

Lo-res_143919272-SIn making the decision, the NBA cited the core values of the league overall, including “diversity, inclusion, fairness, and respect for others.” Furthermore, it acknowledged the concern that the festivities of the weekend, which offers the league one of its best marketing opportunities to highlight the skills and appeal of the sport, would be overshadowed by protests of the controversial law.

For corporate sponsors, the decision was widely regarded as beneficial. Because the NBA made the decision, well-known brands such as Pepsi or Anheuser Busch do not have to face the difficult decision of whether to remove their valuable sponsorship. Instead, they can largely avoid the controversy and challenges to their own brand value, because the decision was made for them.

The NBA comprises multiple businesses as well, in the form of the teams that play in it. For the Charlotte Hornets, and its famous owner Michael Jordan, the decision by the NBA came as a significant blow. The team would have had a great opportunity to showcase its arena and appeal to local and distant consumers. Yet the official statement from the team also acknowledged the justification for the decision, suggesting that despite the negative impacts, it supports the league’s core values as well. At the same time, other owners and teams expressed their appreciation for the NBA’s ethical stand, even as they hoped that they might get a renewed chance to host the game.

Finally, for fans, perceptions of the NBA’s choice generally reflect their views of the law and the controversy surrounding it. Many fans—especially younger supporters of LBGT rights—lauded the decision. But the Governor of North Carolina and his supporters strongly criticized the move by the NBA and, by proxy, its sponsors, alleging that “the selective corporate elite are imposing their political will on communities in which they do business.” This side of the argument notes that the law, even if controversial, reflects the outcome of a democratic process, in that the state voted the governor into his office.

Discussion Question:

  1. Do companies such as the NBA have the right to move their operations out of a location, in response to a legislative change, or is this an example of a company subverting the democratic process? Defend your position.

Source: E.J. Schultz, “Key Sponsors Praise NBA Move to Pull All-Star Game from N.C.,” Advertising Age, July 21, 2016