When I attended the NBA All-Star weekend in Toronto last February, my daughter asked me to bring her home a jersey.
Obligingly, I picked up a Dwyane Wade replica jersey on her behalf. When I did, however, I noticed something that I had never seen on an NBA jersey before: a small logo for Kia Motors Corporation. The patch mirrored those on the All-Star jerseys worn by the players themselves, marking the first foray into advertising on sports uniforms.
Well, in a professional American men’s league in a major team sport, at least. Such marketing is very familiar to fans of car racing, from Formula One to NASCAR, where drivers and their vehicles have both served as high-speed billboards for years. Soccer fans, whether or not their team is based in America, are used to advertising on jerseys too; such ads generate hundreds of millions of dollars in revenue for European teams. The WNBA has sold advertising space on jerseys since 2011, supporting a league that struggles to generate profits through fan attendance alone.
The four major professional men’s sports leagues in the U.S. have, until now, shied away from such advertising. In the past, logistical concerns such as securing individual owner approval and avoiding conflicts with existing sponsors have kept league officials hesitant. For a long time, it seemed like no sport wanted to be the first to cross this particular line.
Now the NBA has taken the plunge. After the All-Star game pilot, the NBA’s board of governors approved a three-year program to test the idea of teams selling space on jerseys for corporate logos. The program will begin with the 2017-18 season, and the Philadelphia 76ers have already announced a partnership with StubHub for next year. While the NBA protects a few of its partners, such as ESPN and Nike, from seeing competitors’ logos appear on a team jersey, nearly any other company that doesn’t deal in gambling, alcohol or politics is fair game.
The revenues from such ads will be divided among the league, the team and a revenue-sharing pool split among the players themselves. NBA commissioner Adam Silver said that the league has calculated the program will be worth about $100 million annually. Relative to the NBA’s overall revenues, this would be a relatively small piece of the pie. But the league, team owners and players are all looking for more revenue sources as their business continues to change. For example, PriceWaterhouseCoopers reported that media rights fees will outpace ticket sales by 2018.
During the pilot program, the logos will be small: a 2.5-inch square patch on the left shoulder. Assuming the pilot program goes well, however, I expect that we will eventually see multiple logos on the front and back of jerseys, perhaps with variations for home and away uniforms. Considering the amount of revenue that jersey sponsorships generate for European soccer leagues, it seems likely the ads are here to stay. I expect the NFL, MLB and NHL, which have all held out against ads on game jerseys, to follow suit in the not-too-distant future.
As I discovered at the All-Star game, it is not only players who will become walking advertisements; fans may get in the game, too. During the pilot program, teams are required to offer logo-free jerseys to fans, but have the option of also selling those that will match the ones worn by players. Teams will doubtless determine their own approaches as the program progresses. For instance, the 76ers have said that jerseys sold nationwide will not carry the StubHub logo, but jerseys sold at their team locations will. Effectively, the team is attempting to turn the jersey with an ad into a collector’s item.
The 76ers’ CEO, Scott O’Neil, told ESPN, “We have a very strong opinion that little Scottie, [a hypothetical consumer] who is 9 years old, will want to wear what the players are wearing on the court.” This theory may or may not pan out, but it is not without logic. Giving fans the option of jerseys with and without a logo will let them vote with their purchases during the three-year pilot.
Although certain fans may not be pleased with the idea, advertising and sports have long gone hand-in-hand. From player endorsements to arenas named after brands, professional sports already involve sponsorship to an extent that makes hand-wringing over small patches on player jerseys seem a bit strange. And ads have no impact at all on players’ performance or the quality of the game, which are the reasons the fans show up in the first place.
The bigger problem for league officials would be pushback from the players themselves. Since the players will benefit directly in the form of additional compensation, however, I expect that most of them will favor the plan. If I am wrong, players have an opportunity to make their displeasure known. The existing collective bargaining agreement between the NBA and the National Basketball Players Association does not expire until June 30, 2021, but either party may opt out of it until December 15 of this year. If players want to object before the pilot season, they can – but it seems unlikely that they will.
In a way, my daughter’s All-Star jersey may become a piece of basketball history. Keep your eyes peeled in the next few years to see what sort of partnerships appear. I wouldn’t be at all surprised to see a Carnival Cruise Line badge on a Miami Heat jersey in the near future.
Posted by Shomari D. Hearn, CFP®, EA
photo courtesy the U.S. Embassy Canada on Flickr
When I attended the NBA All-Star weekend in Toronto last February, my daughter asked me to bring her home a jersey.
Obligingly, I picked up a Dwyane Wade replica jersey on her behalf. When I did, however, I noticed something that I had never seen on an NBA jersey before: a small logo for Kia Motors Corporation. The patch mirrored those on the All-Star jerseys worn by the players themselves, marking the first foray into advertising on sports uniforms.
Well, in a professional American men’s league in a major team sport, at least. Such marketing is very familiar to fans of car racing, from Formula One to NASCAR, where drivers and their vehicles have both served as high-speed billboards for years. Soccer fans, whether or not their team is based in America, are used to advertising on jerseys too; such ads generate hundreds of millions of dollars in revenue for European teams. The WNBA has sold advertising space on jerseys since 2011, supporting a league that struggles to generate profits through fan attendance alone.
The four major professional men’s sports leagues in the U.S. have, until now, shied away from such advertising. In the past, logistical concerns such as securing individual owner approval and avoiding conflicts with existing sponsors have kept league officials hesitant. For a long time, it seemed like no sport wanted to be the first to cross this particular line.
Now the NBA has taken the plunge. After the All-Star game pilot, the NBA’s board of governors approved a three-year program to test the idea of teams selling space on jerseys for corporate logos. The program will begin with the 2017-18 season, and the Philadelphia 76ers have already announced a partnership with StubHub for next year. While the NBA protects a few of its partners, such as ESPN and Nike, from seeing competitors’ logos appear on a team jersey, nearly any other company that doesn’t deal in gambling, alcohol or politics is fair game.
The revenues from such ads will be divided among the league, the team and a revenue-sharing pool split among the players themselves. NBA commissioner Adam Silver said that the league has calculated the program will be worth about $100 million annually. Relative to the NBA’s overall revenues, this would be a relatively small piece of the pie. But the league, team owners and players are all looking for more revenue sources as their business continues to change. For example, PriceWaterhouseCoopers reported that media rights fees will outpace ticket sales by 2018.
During the pilot program, the logos will be small: a 2.5-inch square patch on the left shoulder. Assuming the pilot program goes well, however, I expect that we will eventually see multiple logos on the front and back of jerseys, perhaps with variations for home and away uniforms. Considering the amount of revenue that jersey sponsorships generate for European soccer leagues, it seems likely the ads are here to stay. I expect the NFL, MLB and NHL, which have all held out against ads on game jerseys, to follow suit in the not-too-distant future.
As I discovered at the All-Star game, it is not only players who will become walking advertisements; fans may get in the game, too. During the pilot program, teams are required to offer logo-free jerseys to fans, but have the option of also selling those that will match the ones worn by players. Teams will doubtless determine their own approaches as the program progresses. For instance, the 76ers have said that jerseys sold nationwide will not carry the StubHub logo, but jerseys sold at their team locations will. Effectively, the team is attempting to turn the jersey with an ad into a collector’s item.
The 76ers’ CEO, Scott O’Neil, told ESPN, “We have a very strong opinion that little Scottie, [a hypothetical consumer] who is 9 years old, will want to wear what the players are wearing on the court.” This theory may or may not pan out, but it is not without logic. Giving fans the option of jerseys with and without a logo will let them vote with their purchases during the three-year pilot.
Although certain fans may not be pleased with the idea, advertising and sports have long gone hand-in-hand. From player endorsements to arenas named after brands, professional sports already involve sponsorship to an extent that makes hand-wringing over small patches on player jerseys seem a bit strange. And ads have no impact at all on players’ performance or the quality of the game, which are the reasons the fans show up in the first place.
The bigger problem for league officials would be pushback from the players themselves. Since the players will benefit directly in the form of additional compensation, however, I expect that most of them will favor the plan. If I am wrong, players have an opportunity to make their displeasure known. The existing collective bargaining agreement between the NBA and the National Basketball Players Association does not expire until June 30, 2021, but either party may opt out of it until December 15 of this year. If players want to object before the pilot season, they can – but it seems unlikely that they will.
In a way, my daughter’s All-Star jersey may become a piece of basketball history. Keep your eyes peeled in the next few years to see what sort of partnerships appear. I wouldn’t be at all surprised to see a Carnival Cruise Line badge on a Miami Heat jersey in the near future.
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