3 MINUTE READ | April 27, 2016
NBA Adds Advertising To Jerseys
Outside of European soccer jerseys, golf attire, and NASCAR everything, sponsor ads are not typically seen on uniforms. While the sports experience itself is overflowing with advertising and sponsorships, the team uniforms are kept ad-free. That is until recently when the NBA became the first of the four major U.S. sports leagues to allow ads on regular game-day jerseys. Dirk will now look like this dribbling down the court.
Last week, the board of governors announced a three-year pilot program to allow teams to sell corporate logos on their jerseys. Teams can now start pitching companies on buying a fairly small, 2.5-inch-by-2.5-inch, space on game-day jerseys for the 2017-18 season. This will also be the first season that Nike will produce the NBA’s uniforms after taking over from Adidas. While the Adidas logo was never featured on the uniforms, it is expected that the Nike swoosh will appear on every jersey outside of the Charlotte Hornets, who will likely have the logo of the Nike-owned subsidiary brand Jordan because the team is owned by Michael Jordan. Adam Silver, NBA commissioner, suggested that the program has been conservatively calculated to be worth about $100 million a year.
Where will this money go?
It will be considered basketball-related income, which is factored into the salary cap, and split among the players. However, in order to address the variation in market size between teams and cities, the league is proposing that only 50% of the money be kept by the teams and the other 50% go into a revenue-sharing pot.
So what’s the problem?
I think you mean problems; there are many potential issues that could arise from this program.
The first being with the teams themselves. There is already hesitancy to 1) have ads on their uniforms and 2) share their profits with other teams. The Houston Rockets were one of the teams to vote against the program and have already expressed their concern of ads potentially diluting their brand and putting additional profits in the revenue pool.
Secondly, what happens when a company who buys the patch on the team uniform is a direct competitor of a company that already endorses a player on that same team? Will that be allowed? How will it be resolved? This conflict of interest does not yet have a clear solution.
The NBA will also have to keep their TV partners in mind, ESPN and Tuner, as they will have to been in an agreement with every sponsor that comes on board and ultimately the percentage of profits that they will be keeping.
Lastly, the fans are not exactly fans. There has already been some backlash from fans who want to see the jerseys remain ad-free. NBA commissioner assured everyone that, “there’s a reason this is a pilot program,” and that they will, “listen very closely to our fans.” In the meantime, as a compromise, jerseys sold to fans will not include the corporate logo, although teams will have the option of selling versions that do.
There’s no doubt that this tiny patch will cause many problems but it may actually be a great way for brands to get in front of their audience as the media landscape is evolving. People are spending less and less time watching live TV, outside of sporting events, and thus, fewer commercials. This sponsorship will provide an opportunity for companies to connect directly with their consumers.
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Posted by Vanessa Schluter
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