There are many things unique about the American sports landscape, but one of the biggest differences is its lack of corporate sponsorships on its uniforms. Leagues and teams in sports, especially soccer, the world over are more than happy to sell rights to logos on uniforms or even league names.
However, the NBA is looking to follow in the footsteps of Major League Soccer as the first two big American sports leagues to allow front-of-jersey sponsorship deals. The difference being, the NBA only wants to sell patches on their jersey fronts rather than give up the whole of the front of the jersey to a sponsor.
Said patches aren’t slated to hi the NBA until the 2017-18 season, but it appears that teams are having a difficult time getting sponsors on board ahead of this project. To date, only the Philadelphia 76ers have inked an agreement, with ticketing giant StubHub, with any sponsor.
Part of the issue is that there is a flood of the market, with all 30 (well, 29, other than the Sixers) NBA teams competing for sponsorship dollars.
Another part of the issue is the cost of entry for foreign sponsorship deals, thanks to restrictive NBA international agreements. It is a barrier that companies don’t experience when looking at sponsorship deals within the soccer or other international sports agreements.
“This just isn’t apples to apples when it comes to [soccer] jersey rights,” said an agency source working on international team jersey deals. “So many other global properties can provide as much, if not more, exposure for half the price. … The [NBA] rights restrictions are significant and scaring potential interest away in initial pitch meetings.”
The other big issue? Valuing these patch deals, and determining what exactly corporate partners would get out of a deal outside of the tiny patches on jerseys.
On the one hand, there are mid-level markets like Milwaukee and the deal that could come for the Bucks.
“It’s a real challenge,” said Milwaukee Bucks President Peter Feigin, who’s also concerned with selling title and top-level sponsorships to the Bucks’ new arena and practice facility. “We’ve put a big value on a new piece of inventory, like $3 million to $5 million for small to mid-market teams. So, we’re spending a lot of time educating on this, which we usually don’t have to do.”
On the other hand, how do you treat properties like the Los Angeles Lakers, New York Knicks, and super-popular teams of today like the Golden State Warriors and Cleveland Cavaliers? The Cavs reportedly are seeking a minimum $10 million a year for their patch.
It appears that the combination of the unknown valuations, the NBA’s international restrictions and the flood of the market have combined to put a damper on what should be a relatively easy revenue stream.
Perhaps it will be longer than we all thought before the normalization of jersey sponsorship comes to the biggest of American sports.