Announcements

What the NBA's G-League Deal Means for Sports Marketing

Ad Age, February 15, 2017

By E.J. Schultz

With the National Basketball Association on Tuesday officially announcing it will rename its minor D-League the G-League after Gatorade, could the "Nike NBA" or "State Farm NBA" be next? Don't count on it, say sports marketing experts.

While the NBA has shown a willingness to test aggressive advertising and sponsorship models with its developmental league, there is too much risk in putting a title sponsor on its major league brand name. "I just don't see them ever rebranding it is as the Nike NBA or something like that. That is probably a step they are not going to take, or any of the other leagues for that matter," said Jim Andrews, senior VP-marketing for sponsorship consultancy IEG.

The NBA already has plenty of brands willing to shell out big bucks for category-exclusive sponsorships, including Kia in automotive, Anheuser-Busch InBev in beer, State Farm in insurance and Taco Bell in quick-service restaurants. IEG in December reported that sponsorship spending on the NBA and its 30 teams for the 2015-16 season grew 8.1% to $799 million, beating revenue growth at the three other major U.S. pro sports leagues.

"I think there's too many brands out there that have big stakes in the NBA for one brand to have a presenting sponsorship," said Ben Sturner, president and CEO of Leverage Agency, a sports, entertainment and media marketing agency. But Mr. Andrews speculated that one day, the NBA might consider title sponsorships for its finals, like the "State Farm Finals."

Gatorade's deal — which Ad Age first reported on Monday — was officially announced on Tuesday, marking the first time one of the four big U.S. pro sports leagues has named an entitlement sponsor.

Beginning with the 2017-18 season, the NBA Development League, known as the D-League, will be renamed NBA Gatorade League and branded the "G-League." The NBA in a press release described it as a "a multi-year expanded partnership" with Gatorade, which has partnered with the league since it became the league's official sports drink sponsor in 1984. Financial terms were not disclosed.

The developmental league's new logo shows a silhouette of a man grabbing a basketball. Beneath him is Gatorade's signature "G" trademark. The logo will be shown on game balls, team jerseys, oncourt signage and in league digital assets, according to the announcement.

The PepsiCo-owned brand is using the deal to showcase the Gatorade Sports Science Institute, a 32-year-old organization whose mission is to enhance the recovery and performance of athletes via research, education and innovation. Institute scientists will "partner with the NBA G-League on player nutrition and training programs, incorporating the newest technology and innovations in Gatorade testing, product and equipment," according to the announcement.

The NBA and Gatorade will also collaborate on "custom, behind-the-scenes video content which will capture NBA G-League players on their respective journeys, highlighting a shared commitment to enhancing performance through innovation."

The deal is an example of how brands are seeking deeper sponsorships that extend beyond simple awareness and into content. Simply put, signage alone no longer cuts it.

Mary Scott, president of global integrated communications for sports and entertainment agency United Entertainment Group, called the Gatorade-NBA pact "a monumental deal" — not just for the title sponsorship, but for how Gatorade plans to promote itself within the context of athleticism.

"It's not just Gatorade, capital G," she said. "It's really going deeper and supporting the messaging and the positioning." The deal, she said, "goes across multiple channels for the brand around recovery and more of the science of Gatorade and how it helps athletes."

Mr. Sturner said the deal gives Gatorade the "ability to test products with top-tier athletes and have an impact on the game and really make a statement in your own content." And it's a win for the NBA "because they are getting a premier brand that is incredible at [sponsorship] activation to be part of the D-League that needs a little bit of a push, especially from a consumer standpoint," he added.

The NBA has previously used its developmental league to test aggressive marketing deals. The D-League, for instance, has permitted on-jersey advertising deals for years, dating back to 2010 when the Erie (Penn.) BayHawks signed a deal with Lake Erie College of Osteopathic Medicine and the Rio Grande Valley (Texas) Vipers inked one with Lone Star National Bank. On-jersey ads will hit the NBA next season as a result of a three-year pilot program that has already led to five team deals, such as the Boston Celtics putting a General Electric patch on its uniforms.

High-level title sponsorships are not unprecedented in sports. Nascar, for instance, has long put corporate monikers on its racing series. The latest is Monster Energy, which this season takes over for Sprint as the title sponsor for Nascar's top series. The PGA has cycled through five title sponsors for its developmental tour, including the Nike Tour, the Buy.com Tour, the Nationwide Tour, and starting in 2012, the Web.com Tour.

Overseas, Barclays for 15 years served as title sponsor of the Premier League. But that deal ended last year and the soccer league has opted to forgo a title sponsorship. Bloomberg in April reported that the league instead decided to focus on category sponsors, like Nike, which is its official ball sponsor. Last year, the league inked Carling to a beer sponsorship in a deal that runs through 2018-19.

By forgoing a title sponsor, the Premier League made the decision to "take our brand back," Mr. Andrews said. "There's advantages in selling [title sponsor deals], particularly with the revenue you get," he said. But the downside is that leagues face the potential of changing their name every 10 years, or as frequently as the entitlement deals expire and are not renewed, he noted.