SBJ: NBA teams could vote on jersey sponsorships in April

http://aol.sportingnews.com/nba/story/2012-03-05/sbj-nba-teams-could-vote-on-jersey-sponsorships-in-april?utm_source=dlvr.it&utm_medium=twitter

With the NBA positioning itself as the most global of leagues, will it soon join the rest of the world by selling advertising on uniforms? The sticky issue will be debated, if not voted on, at the next board of governors meeting in April.

It’s a touchy topic, one that involves balancing some of the most influential league constituencies and addressing some thorny questions: Would uniform patches be league or team inventory? Will NBA broadcasters TNT and ESPN/ABC, or even uniform rights holder Adidas, want a piece of the action? Would the league take a PR hit as the first to accept non-endemic ads on uniforms?

Of course, the most important issue is also the most basic. “The most appropriate question and the answer we’re all waiting for is, ‘What is it worth?’” said Golden State Warriors president and COO Rick Welts, who did the WNBA’s first uniform advertising deal between the Phoenix Mercury and LifeLock in 2009. “I am not suggesting this is an easy issue, but I feel like it is inevitable. We just have to agree on value and what it would look like.”

In the case of the Mercury, the biggest logo on its uniform became LifeLock’s across-the-chest jersey patch, while the team logo on the jersey shrank to about the same size as the Adidas logo. The WNBA followed suit last year, with a Boost Mobile ad patch deal on the uniforms of 10 of the league’s 12 teams.

A study released last year by Horizon Media calculated that a brand logo across the middle of an NBA team’s jersey occupying 3.5 percent of the TV screen would produce $31.18 million in exposure value.

However, the study did not factor in ancillary exposure on highlights and news shows, nor did it account for any online exposure.

“Jersey ads are one of the last pieces of inventory that club marketers haven’t been able to sell, and for a local sponsor they could be a real boon, since it would give them exposure with a team at home and away,” said Michael Neuman, managing partner of Horizon’s Scout Sports and Entertainment.

The impact on some of the NBA’s more tradition-bound logos, and the disparity between potential revenue in various markets, are other factors to consider. Still, it’s hard to imagine a club marketer voting against the proposal, especially if would be their inventory.

“Obviously, it’s a league decision, but as someone who spent seven years at NASCAR, I know the value of putting a brand on the playing field and the uniform, so it is certainly something I would support,” said New Jersey Nets CEO Brett Yormark. “You can monetize this in ways you can’t monetize any other kind of marketing inventory. And, of course, we’re in the No. 1 market in the country, so ...”

But other team executives are more hesitant about blending team marks with a company logo as they address questions such as size and placement on the uniform.

“It is something we are wrestling with,” said an NBA team executive from a large market. “There are challenges, and the question is whether there is a way to do it differently.”

From potential sponsors, there’s an appetite.

“Without a doubt, there’s already interest,” said Mark Tatum, NBA executive vice president of global marketing partnerships, outside the league’s annual All-Star Technology Summit that was held at Orlando’s Waldorf-Astoria. “It’s certainly not automatic, but if we do it, it would be a big deal, so we are spending a lot of time evaluating.”

Added Sal LaRocca, NBA executive vice president of global merchandising: “The good news is that Adidas has a lot of experience with this from their football (soccer) business. We continue to talk internally about the best way to approach the market, determining whether having sponsored logos on jerseys would be incremental or just a diversion of money that would go somewhere else. We’re trying to balance a lot of constituencies.”

The issue gets even stickier. Remember that the NBA is still the only major American sports property without any logo on its game uniform other than its own—Adidas has logos only on NBA warm-ups. One senior licensing industry source said Adidas was already in discussions with the league about moving its logo to the uniform, which might obviate the other conversations.

“We are looking at all of the different elements and stakeholders, but it is an ongoing conversation,” said Chris Granger, executive vice president of the NBA’s team marketing and business operations department.

Welts suggested one intermediate step might be an advertising patch on warm-ups. “I’m guessing that this would be a process, not a 0-to-60 rush,” Welts said.