What Does Pujols Deal Mean For L.A. Angels’ Sponsorship Revenue?
Posted: 12/8/2011 3:45:42 PM by
Jim Andrews | with 0 comments
While Angels fans start planning World Series celebrations and Cardinals fans assess their club’s fortunes in the wake of Albert Pujols’ departing St. Louis for Anaheim, others are looking at the impact the slugger’s arrival will have on his new team’s bottom line.
Such discussions are natural for us sports business types whenever a contract of this magnitude—$254 million over 10 years—is signed.
It should come as no surprise that Pujols’ effect on incremental sponsorship revenue will not be enough to cover his compensation. Sponsorship and team-controlled ad inventory are a relatively small piece of MLB teams’ revenue pie compared to broadcast rights and ticket sales.
Yet there should be a pretty significant “Pujols effect” on sponsorship that could pay the 2012 salary of a decent relief pitcher, should the Angels be in need of such a thing.
Forbes estimates the team’s 2011 revenues at $222 million. If we assume that sponsorship and ad inventory accounts for 20 percent of that, we’re talking $44 million. I would estimate the signing of a huge star like Pujols could easily boost sponsorship revenue by 10 percent in his first season; it’s reasonable to assume that attracting some first-time sponsors and increasing value for renewing partners could bring in about $5 million.
That impact would be proportionally larger if Pujols wasn’t joining an already successful franchise and instead was going to a perennial cellar-dweller like the Pirates or a team that lost more than 100 games in 2011, like the Astros.
If Pujols is able to lead the Angels to multiple championships and higher broadcast ratings, he will be able to account for incrementally more sponsorship and ad revenue in future years.
Additionally, the star first-baseman could further line his own pockets with more endorsement deals as a result of his move to Southern California. Pujols currently earns between $4 million and $5 million in endorsements, the vast majority of that from Nike.
If he is so inclined—and he may not be—the move to a major media market with a large Latino population should certainly open doors to endorsement, advertising and spokesperson deals beyond sporting goods.
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Filed under: pro sports, selling, endorsements