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NBA Jersey Sponsorships Open Door for Other Leagues
Wall Street Journal, April 15, 2016
By Steven Perlberg
Brand logos are coming to the uniforms of National Basketball Association players, raising questions about whether other professional U.S. sports like baseball and football will eventually follow suit.
The NBA Board of Governors announced Friday that it approved the sale of jersey sponsorships beginning with the 2017-18 season. Sponsorship “patches” measuring approximately 2.5 inches by 2.5 inches will be placed on the front left of players’ game jerseys, opposite the Nike logo, the league said.
“Jersey sponsorships provide deeper engagement with partners looking to build a unique association with our teams and the additional investment will help grow the game in exciting new ways,” NBA Commissioner Adam Silver said in a statement.
The league has signaled for some time that uniform sponsorships were on the way, but the topic has been a controversial one in American sports circles. In European soccer, shirt sponsors often dwarf a team’s own logo. In the U.S., Nascar vehicles and drivers’ uniforms are crammed full of ads, representing a more extreme approach to giving up real estate to sponsors. In the WNBA, the league’s women’s counterpart, sponsorships take up significant jersey space.
But even as sponsors ply stadiums, pregame shows and TV events with branding, the uniforms players wear in major American sports like football, basketball and baseball have been largely off limits for advertisers.
In a press conference Friday, Mr. Silver said the league expects to generate $100 million in additional revenue thanks to the jersey sponsorships. Mr. Silver said that he understands why some fans might not like the jersey ads, but that it was “part of building the league.”
“Over time, as we generate more money and invest more money back into the game, improving the game, improving our marketing and growing the footprint of the game, I think our results will be positive,” he said.
Kevin Adler, chief engagement officer at sports marketing firm Engage Marketing, said the move could be a watershed moment for American sports marketing. Other professional leagues will likely take a “wait-and-see approach” to evaluate fan reaction and revenue potential.
Mr. Adler estimated teams could charge companies about seven figures annually for a jersey sponsorship.
“Costs continue to rise to own and operate a team. Teams and leagues are constantly seeking out new revenue streams,” Mr. Adler said. “There will be an initial consumer backlash, and then eventually there will be consumer acceptance.”
“I think the reality is that fans are quite savvy. They realize that sports are underpinned by a commercial structure,” said Bryce Townsend, head of business solutions at ESP Properties, a WPP-owned agency that advises sports and entertainment organizations.
The announcement comes during a particularly exciting time for the league. The Golden State Warriors, led by 3-point-shooting superstar Stephen Curry, broke the record for most wins in a regular season. Los Angeles Lakers’ icon Kobe Bryant, who is retiring this year, put up 60 points in his swan song on Wednesday. The NBA playoffs tip off Saturday.
“There’s a tremendous upswing that’s been going on,” Mr. Townsend said. “This is the next step, commercially speaking.”
The 30 NBA teams will sell their own jersey sponsorships in the three-year pilot program. In their own retail stores, teams can sell jerseys with the sponsor patches, but the logos will not appear in other retail versions of player jerseys, the league said.