Phoenix Mercury: Pressure’s on

The GIST: The outcry following the NBA’s one-year suspension of Phoenix Suns and Mercury owner Robert Sarver for racist and sexist comments is growing. Franchise partner PayPal and minority investor Jahm Najafi criticized both Sarver and the short punishment last week, calling for him to sell the basketball teams.

The sponsor: On Friday, PayPal said it would not renew its deal when it expires at the end of the 2022–23 NBA season if Sarver still owns the franchise. The fintech company signed on with the Suns and the WNBA’s Mercury in 2018, reportedly paying $3 million for the 2021–22 NBA season alone.

The owner: Minority owner Jahm Najafi, who holds the second largest stake in the franchise, called for Sarver’s resignation in a letter on Thursday. Najafi wrote that he has no intentions to become the majority owner, but will “work tirelessly to ensure the next team steward treats all stakeholders with dignity, professionalism and respect.”

The precedent: Last winter, telecommunications company Three and automotive brand Hyundai suspended their multimillion dollar deals with English soccer club Chelsea FC after the U.K. government sanctioned then-owner Roman Abramovich for links to Russian president Vladimir Putin in the wake of the country’s war with Ukraine.

• Hyundai eventually backed out of its agreement, and crypto brand WhaleFin took its spot in May after signing on for $24.4 million a year. Three, though, resumed its $52.4 million annual partnership in June following an ownership change.

Zooming out: PayPal is acting in line with the basketball community by denouncing Sarver and the NBA. As a result, it becomes one of the first to demonstrate how sponsors should respond to discrimination and toxicity amid a continuing cultural reckoning.

• The brand’s move feels like a step up from the USWNT’s sponsors’ support during the team’s equal pay fight — the likes of LUNA Bar and Secret Deodorant filled in the pay gap when the U.S. Soccer Federation wouldn’t.