The NBA is moving closer and closer to putting corporate logos on player jerseys. The proposal could be approved as soon as next month at the NBA’s Board of Governors meeting with logos coming for the 2017-18 NBA season when the league kicks off a new eight-year, $8 billion apparel deal with NikeNKE +0.28%.
A new study released last night from sports marketing firm Repucom is one reason NBA owners are eager to make the leap to logos on jerseys. Repucom found that the teams in Europe’s top soccer leagues will generate $930 million this season from shirt sponsors, up 13% over the previous year.
Captain Wayne Rooney sports the Chevrolet-branded jersey of Manchester United. (AP Photo/Scott Heppell)
Jersey sponsorship deals have long been part of European soccer and the values of the deals have skyrocketed in recent years. Manchester United started a pact with General MotorsGM -0.56%’ brand Chevroletin 2014 worth $80 million a year or 150% more than the previous agreement with insurer Aon. Japanese tire manufacturer, Yokohama, began its $60 million a year sponsorship of Chelsea this season at more than double the prior ratewith Samsung.
The Chelsea-Yokohama tie-up helped push English Premier League shirt revenue up 35% this season to $370 million or 40% of the total in European soccer. The other leagues that make up the remaining $560 million are the German Budesliga, Spain’s Primera Division, France’s Ligue 1, the Italian Serie A and Netherlands’ Eredivisie.
Foreign investment is driving the growing shirt sponsorship market with 62% of the revenue derived from deals for companies based outside the team’s home market.
The United Arab Emirates (UAE) is the top market with UAE companies investing $183 million led by Emirates Airline and its array of deals led by Arsenal, Real Madrid and Paris Saint-Germain. UAE is followed by Germany ($152 million) and the U.S. ($97 million), which is largely the United deal with Chevrolet.
“For brands, shirt sponsorship consistently returns the highest advertising values, but it is key to understand which clubs and leagues present the best opportunities,” says Repucom managing director Jon Stainer in the release announcing the results of the study. “Given the number of deals and their increasing values, mapping European football’s shirt sponsorship provides a fascinating look into the trends shaping the whole industry.”
As in the EPL where deals range from $80 million a year to $1.5 million annually, different NBA clubs present different opportunities for sponsors with big market teams carrying the most cache. To alleviate this issue, the NBA’s proposal calls for 50% of any jersey sponsor money to go into a revenue sharing pool.
NBA teams are not about to have Emirates, Qatar Airways or Deutsche Telecom splashed across their chest in big, bold type. The proposed size of the NBA logos would be 2 ½ inches by 2 ½ inches and appear on the upper left chest, similar to the Kia Motors logo on the 2016 NBA All-Star uniforms.
The NBA would be the first of the four major U.S. sports league to add corporate branding to regular game-day jerseys, but European soccer-style jersey sponsors are already a part of the U.S. sports culture. MLS teams have always operated with corporate names front and center, and the WNBA also prominently displays its jersey sponsor. Don’t expect a fight from NBA players. The revenue from jersey sponsorships would fall under basketball related income, which is split evenly with the players.