Good morning. Today, Kawhi Leonard’s puzzling endorsement deal confused even executives at the sponsor; the defection rate at Disney+ and Hulu doubled after Jimmy Kimmel’s suspension; and retailers should remember their ad businesses as they consider deals with AI chatbots.

There are many great details in Robert O’Connell and Harriet Ryan’s dive into the fraudster behind the endorsement deal that became Steve Ballmer’s NBA nightmare, but I was struck by the early warnings from the sponsor’s marketing department and executives.

Today the NBA is investigating whether Ballmer’s L.A. Clippers used the fintech startup Aspiration to funnel money to Kawhi Leonard in violation of the league’s sacrosanct salary cap. The team has denied breaking any rules.

But when Aspiration co-founder and progressive activist Joe Sanberg originally pushed for the contract, which was set to pay Leonard $48 million over four years, jaws dropped over the basic terms.

“If you want a talent deal…maybe we should shop around. Do some research. Consider a different team,” one top executive texted the general counsel. “You can’t just commit to a $48M spend without talking to people in the company. I don’t get it.”

“Totally agree,” the general counsel responded. “Kawhi is a regional star. He doesn’t have the charisma of a Steph Curry, Lebron etc.”

And a marketing director complained to supervisors about “some pretty big flags”—including that the man they were paying to introduce the public to their company didn’t use social media.

More NBA: NBCUniversal expects its $27 billion rights deal with the NBA to bring in new audiences, help keep streaming subscribers and TV viewers happy—and lose between $500 million and $1.4 billion annually in its early years. [WSJ] 

Behind the NBA’s push with non-basketball content creators. [Ad Age] 

The new season starts today....so let’s make Finals predictions. [The Ringer] 

Customer cancellations for Disney’s Disney+ and Hulu streaming services jumped in September, after the company briefly suspended the ABC late-night show “Jimmy Kimmel Live!,” Isabella Simonetti reports.

The rate of customer defections for Disney+ doubled to 8% from 4% in August, while those for Hulu doubled to 10% from 5%, according to data from subscription-analytics company Antenna. The rate is calculated by dividing the number of cancellations in a given month by subscribers at the end of the prior month.

Antenna estimated a total of 3 million cancellations for Disney+ and 4.1 million for Hulu in September. Both of those figures far exceeded the trailing three-month averages for the services.

More Mouse House: Disney announced plans to mark the 250th anniversary of the United States including a 24-hour telecast, special offers for veterans and military families, and sesquicentennial-themed merchandise. [Deadline]

Deals by Walmart and others to let consumers buy products through ChatGPT put those companies in position to benefit from an AI boom. But selling directly through the chat could also put a dent in retailers’ lucrative and growing ad revenue, Jinjoo Lee writes. 

Of the roughly $59 billion that companies are expected to spend on U.S. retailers’ ad business this year, more than 60% is tied to search placements on those retailers’ sites and apps, according to a report from Emarketer.

“If discovery moves upstream to universal AI assistants, ad budgets could follow,” the firm said.

That would be bad news for retailers, especially Walmart, whose advertising business has helped make e-commerce more profitable.

And while OpenAI doesn’t run ads yet, it has reportedly hired advertising talent from big tech rivals. Ads would be a low-hanging fruit for chatbots with lots of traffic and troves of valuable data—one possible reason why Amazon so far is boxing out external AI chatbots.

This Nov. 18 and 19, CMOs will gather in New York for The WSJ CMO Summit, featuring marketing leaders such as Vanessa Broadhurst of Johnson & Johnson, Cheryl Krauss of Chubb, Alicia Tillman of Delta Air Lines, Laura Jones of Instacart and Taylor Montgomery of Taco Bell. Together, they’ll explore fan-fueled growth, AI in marketing and the evolving CMO-CEO partnership. Join the CMO Council and be part of the conversation shaping the future of marketing leadership.

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How a small North Carolina college made itself a magnet for wealthy students. [WSJ] 

Dick’s House of Sport stores will be the first wholesale distributor in the U.S. for British activewear brand Gymshark, which opened its first U.S. store of its own last weekend. [Footwear News]

Marketing mix modeling isn’t as difficult or costly as it used to be. [AdExchanger]  

Ticketmaster promised to ban users with multiple accounts as it faces Federal Trade Commission allegations that it effectively colludes with brokers to sell tickets in the secondary market at high markups. The company disputes the claims. [The Wrap]

An advance screening of the new Yorgos Lanthimos movie “Bugonia” will only admit people with shaved heads, like Emma Stone’s character in the film. A barber will be on hand to help. [THR]