The NBA is losing money; more than $300 million, with 22 of its 30 teams in the red. A revenue boost is needed, which brings back the previously discussed option of selling ad space on game jerseys. Team owners will reportedly give this idea some serious thought in their April meeting.
Marketing experts say it’s only a matter of time. David Abrutyn, head of global consulting at sports marketing firm IMG Worldwide, shared his two cents:
“When you look at the revenue streams left available, jersey branding is the most significant that hasn’t been exploited.”
But how much is a jersey deal really worth? Front Row Marketing Services figures companies would pay anywhere from $1.2 million to $7.5 million per year to place their logos on uniforms, depending mainly on the market where the team plays. Horizon Media conducted a study last year valuing television exposure of the space across an NBA jersey’s chest in a range from $4.1 million for the Los Angeles Lakers to $300,000 for the Minnesota Timberwolves.
Abrutyn goes as far as saying the Lakers might fetch $10-15 million per year, then claims:
“I’ve got about six companies that would buy it right now.”
European soccer clubs like Manchester United get more than $30 million a year from jersey deals. The NBA, which already does jersey deals in its development league and in the WNBA, is evaluating the impact on key stakeholders. One big consideration is whether jersey sponsorships would increase revenue or merely divert it from existing deals.
Fans might not be too excited about the possibility, but commercialization in sports keeps progressing despite the purists complaints. People were outraged when companies started sponsoring arenas and stadiums, but were quickly silenced upon realizing how much the price of game tickets dropped as a result of sponsorships.
Should be interesting to see if the NBA is the first of America’s top four professional sports leagues to commercialize their jerseys. What if a team rockin’ Southwest Airlines on their jerseys comes in and beats Miami in the AmericanAirlines Arena to win the Finals? Does Southwest turn that into an advertising concept? The League as a whole is currently sponsored by Kia. Does that mean Chrysler can’t sponsor the Detroit Pistons’ jerseys?
Despite all the question marks, I’d expect the NBA or NHL to make that first move. It’s tough to envision Yankee pinstripes covered up by the Golden Arches, or Packer green covered by a Pepsi logo.
via Bloomberg
