Report: NBA included jersey advertising in new TV deal negotiations, but ads not yet imminent
NBA Commissioner Adam Silver this spring called the sale of advertising space on NBA jerseys “an idea whose time has come,” and said that the introduction of ads on uniforms within the next five years is “inevitable,” given widespread interest among the league’s corporate sponsors. There’s no locked-and-loaded deal done at the moment, but Silver and the NBA’s partners at ESPN and Turner have begun preparing for how jersey ads might impact the league’s new multibillion-dollar broadcast rights agreement — and, of course, who gets paid what, and by whom — according to John Ourand and John Lombardo of Sports Business Daily:
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If the NBA sells corporate advertising on game jerseys, which many believe is inevitable, network partners Turner and ESPN will get certain spending guarantees related to those contracts — a development that was negotiated as part of the league’s massive nine-year, $24 billion media deals. […]
Early parameters indicate a distinction between whether a national brand or a local/regional brand buys a team’s jersey sponsorship. A national brand with a popular team would mean more money for the networks than a local/regional brand with a team that’s not on national TV very often.
According to sources involved in the discussions, if there’s a national brand with a jersey deal that would have bought time on ESPN or TNT’s NBA game telecasts — think Coca-Cola or Samsung — the two networks would get specific commitments from that company to also buy TV advertising during any nationally televised games featuring that sponsored team.
Sources familiar with the TV deals admit both networks pushed hard to be allowed to sell ads on team jerseys outright, but the league balked at handing over the potentially lucrative rights. Under the new TV deals, NBA teams maintain the rights to sell the jersey advertising, which has an estimated value ranging from around $800,000 for small-market teams like the Memphis Grizzlies to more than $10 million for large-market teams like the Los Angeles Lakers.
Specifics of the TV buy component have not been hammered out, but the level of spending required by a company sponsoring the jersey would depend on how much exposure the team has on national broadcasts.
Now, for all Silver’s talk of inevitability, it’s worth noting — as Paul Lukas of UniWatch highlights — the number of qualifiers in the SBD report, and the absence of any concrete plan or timeline for the advent of ads:
In short: Yes, the league and its broadcast partners have created a mechanism that accounts for the possibility of uniform ads. But they haven’t yet sorted out the details of that mechanism, much less activated it. Or to put it another way, the league is preparing for the possibility of uniform advertising. Thanks for the news flash, but we already knew that. […]
Several people I spoke to last week indicated to me that the league’s new TV deal actually makes uniform ads less likely, because the NBA’s TV partners wouldn’t want their commercials to be competing with uniform ads. This newly reported provision is clearly an attempt to account for that, because the uni advertiser would also have to become a TV advertiser, so that should mollify the networks. But think about it from an advertiser’s perspective: If you’re already a uni advertiser, do you want to be forced to run TV commercials as well? Maybe you do — it would create a multi-faceted branding blitz, after all. Then again, maybe you don’t want to be locked into a “Buy one, you must buy two” system. Faced with that requirement, maybe you just skip the uniform ads altogether.
Maybe you do if you are, relatively speaking, a smaller brand. The big fish, though — the Cokes and Samsungs referenced by Ourand and Lombardo — probably won’t blanch at the prospect of upping their buy for greater visibility. Either way, though, Lukas is right to suggest that those opposed to jersey ads not start rending their logo-free garments just yet; the dystopian future might be visible on the horizon, but it’s not quite here just yet.
Discussion about turning jerseys into billboards has been going on for years, but it started gaining serious momentum back in 2009, when the WNBA’s Phoenix Mercury and Los Angeles Sparks reached agreements to promote sponsors on their game uniforms. The NBA then opened the door to teams selling ad space on their practice jerseys. In the spring of 2010, jersey ads came to the D-League; the following year, the big league started more seriously considering adopting ads.
The NBA’s Board of Governors remained divided on the ads, but some individual teams were intrigued by the prospect of tapping into new revenue stream that, according to some estimates, might be worth more than $100 million. Even longtime opponents like former Commissioner David Stern would have to stand up and take notice at that price point, making the coming of the ads perhaps more a question of style than anything else.
The NBA has ramped up its stage-setting in recent years, floating test balloons like the BBVA logos in place of players’ names on the backs of D-League playoff uniforms in 2012, and the chest patches and lower-back patches worn by rookies and sophomores during the Rising Stars Challenge at All-Star Weekend back in February. The SBD’s report notes that “Turner will be able to sell corporate advertising specifically for All-Star Game jerseys starting with the 2017 game,” and you’d suspect that the corporate ads will show up in the same spots as those “Team Webber” and “Rising Stars” logos.
Proposed designs reportedly feature 2-1/2-inch by 2-1/2-inch patches that would appear on the chest of new uniforms like those introduced this summer by the Charlotte Hornets; while Silver said last fall that the NBA is “nowhere near the point where we’d eliminate team names” from jerseys, the WNBA’s Minnesota Lynx in March agreed to display “MAYO CLINIC” on the fronts of their jerseys this summer, suggesting that such an arrangement could be possible, if not probable, at the NBA level.
The possibility remains that we’re starting too hard at the tea leaves here, and that the myriad questions left unanswered — the specifics of the TV buy, what the revenue split would look like, how much each network partner would stand to make, who would pay them, whether multiple patches would be allowable or just the one, etc. — will keep the appearance of jersey ads from becoming imminent. There’s no question that Silver and the league’s partners are thinking and long and hard about how to most effectively milk this particular cash cow, though, which means the issue — like an eyesore of a Paunch Burger patch on a small forward’s shoulder — will continue to be something to keep an eye on.
Hat-tip to Barry Petchesky at Deadspin.
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Dan Devine is an editor for Ball Don’t Lie on Yahoo Sports. Have a tip? Email him at [email protected] or follow him on Twitter!
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