As we near the end of the 3rd straight NBA finals between the Cleveland Cavaliers and the Golden State Warriors, we are likely looking forward to the same matchup next season. Last summer, people criticized the league saying that the NBA Finals’ teams were already a lock and there was nothing new this season- and they were right. This upcoming season however, does have something new for fans to see – marketing on NBA jerseys. That’s right, get ready to see logos representing some of the biggest companies join the jersey along with the team name, player number and Nike logo, as Nike takes over as the NBA’s official outfitter.
When most of us hear “jersey sponsorship” we immediately think of soccer where the jersey sponsor logo is larger than the team name.
As of now this is not the case as sponsors will only have about a 2.5 square inch of space on the front shoulder opposite the Nike Logo. The NBA jersey sponsorships will start as part of a three-year pilot program beginning in the 2017-18 season. Teams are responsible for selling their own jersey sponsorships. Good news for those not in favor of the decision is the sponsor patch will not appear on the retail versions of the player jerseys. Yet, teams will have the option to sell the jerseys with sponsor patches in their own retail outlets.
There have been rumors about this possibility the past few years as the NBA has already added logos to D-League jerseys and All-Star Game jerseys.
It is not surprising that this decision has been made, because it creates an additional revenue stream for teams. What is surprising is the fact that the 16-17 regular season has already concluded and there are currently only 6 teams that have inked jersey sponsorship deals. One reason is that most teams are looking to do deals with companies with headquarters or ties to the state that the team plays in. With 30 teams in the NBA, and some states having several teams (4 in California, 2 in NY…), a lot of prospective companies have reduced chances of getting a partnership with an NBA team.
It is also difficult to place an accurate valuation on this sponsorship as different teams’ success as well different markets provide very different exposure. For example, the first team to sign a deal was the Philadelphia 76ers who has been at the bottom of the league for several years now. The price to sponsor jerseys for a team like Philadelphia, with no All-Star players and very little national television exposure, will be a lot different than that of the Golden State Warriors or Cleveland Cavaliers. Similarly, a team in a huge market who is not performing well currently like the LA Lakers still may have a higher valuation than a small market team that is performing well like the Utah Jazz. As teams continue to figure this out, we will see more deals closed this summer leading into the 17-18 season.
With additional revenue being the reason behind the decision, when will enough be enough as more companies will want to join after seeing the ROI from this type of marketing from the pilot program? Hopefully, the commissioner will know when to say when and we are not headed here in the future.
