By Barry Janoff
April 15, 2016: Boldly going where Nascar and soccer have gone before, the NBA said that its Board of Governors has approved the placement of ads on jerseys, beginning with the 2017-18 season.
What was called a three-year "pilot program" will see patches on the front left of the game jerseys, approximately 2.5 inches by 2.5 inches and adjusted to fit the dimensions of each sponsor’s logo.
NBA commissioner Adam Silver said the move would generate approximately $100 million in revenue for the league. The three-year pilot launch coincides with the beginning of Nike's eight-year contract, valued at $1 billion by industry analysts, replacing adidas as the NBA's official on-court apparel provider.
With no limit set on how much teams can ask for the ad(s), industry analysts said the figure from jersey ads might go higher if all 30 teams sell the space in the $2-$4 million annual range.
A report earlier this month from Canadian media company TSN, anticipating the move by the NBA, said that Maple Leaf Sports and Entertainment, which owns the Raptors, "have suggested to potential advertisers that the on-jersey ads are worth between $4-$5 million per season."
"We still don't know how much money this will generate," Silver said during a media conference call Friday (April 15) in New York following the NBA Board of Governors meeting.
"The NBA’s 30 teams will be responsible for selling their own jersey sponsorships. Teams will be in control of the asset, and can decide whether or not they want a logo," said Silver. "It is their decision on if they want it connected to a current team partner, or a new partner. We have heard from some owners that they may want to use the space for a not-for-profit group."
Nike, taking over from rival adidas, will have it's "Swoosh" logo, on the front right of game jerseys — also a first for the league — on all teams except for the Charlotte Hornets.
The Hornets are majority owned by Michael Jordan, and the NBA said it is "in discussions" to have the team place a Jordan Brand patch in the spot where the Nike logo would go. Jordan Brand is a division of Nike, taking in more than $2.5 billion billion annually.
Despite the news, not all of the parameters have been established.
"This is a bit of an experiment," Silver said, "There will be unintended consequences. We don't how it will impact the larger marketplace," referring to the new logos potentially encroaching into territory intended exclusively for league marketing partners.
Silver, however, did state, "There will be some protection for national partners," to avoid such conflicts. "We want an opportunity to look at all of that information once they begin selling.
"Hopefully they will be new companies coming into the NBA. Companies that want to connect with consumers," said Silver. "Some of these companies may be based outside the U.S. We want to help generate growth of game through this arrangement."
There has been some talk about the NHL adding sponsor logos to its jerseys, which are now supplied by Reebok but beginning in 2017-17 will be provided by parent company adidas.
When that new deal was signed late last year, NHL commissioner Gary Bettman said, "There has been speculation that this deal will inevitably lead to ads on jerseys. That is absolutely not true. The fact of the matter is, we are not currently considering putting advertising on NHL jerseys. There have been no discussions formally or informally with anyone about doing that."
Nascar has long had company logos on its driver's uniforms and cars, and global soccer leagues are well-known for their jersey-front sponsorships.
Manchester United of the English Premier League is in the midst of a seven-year, $560 million jersey sponsorship pact with Chevrolet.
Barcelona FC, led by Lionel Messi, was taking in about $33 million annually from Qatar Airways for top-tier sponsorship, including jersey-front placement. The club is seeking a new partner, with the value expected to increase in value. Nike is the kit outfitter for the club.
In the U.S. MLS and NASL each have numerous jersey-front sponsors, including Emirates with the latter's New York Cosmos.
Jersey ads are not new to the NBA. The league signed a deal with partner Kia to have the car company place a logo on the front left of the 2016 All-Star Game jerseys, as well as an adidas logo, which took place in Toronto.
Both the WNBA and NBA D-League have numerous teams with jersey sponsorships.
The sponsor patch will not appear on the retail versions of the Nike player jerseys, but teams will have the option to sell the jerseys with sponsor patches in their own retail outlets, according to the NBA.
Even with the potential new revenue stream, SIlver said he was aware that there would be detractors, among them people who see players as walking billboards.
"I understand that some fans want jerseys commercial-free," he said. "This is part of building the league. Over our history, many sponsorship revenues have been added and they've initially been met with mixed reviews. I think the results will be positive. But there is a reason this is a pilot program. I want to hear what our fans have to say."
Nike Deal Puts The 'N' Into NBA
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