Saturday, April 16, 2016

The Yormark-ization of the NBA: uniform ads coming (and a line has been crossed)

I wrote in July 2012 about the Yormark-ization of the NBA, with ads on  NBA uniforms coming in a year, and how Nets CEO Brett Yormark, citing his NASCAR experience, had said, “You can monetize this in ways you can’t monetize any other kind of marketing inventory."

It didn't happen on that schedule, but Bloomberg reported 4/15/16, NBA Owners Approve Ad Patches on Jerseys for First Time:
A three-year pilot program for the ads, in the form of 2.5-by-2.5-inch patches, will begin in the 2017-18 season, which coincides with Nike replacing Adidas as the league’s official uniform supplier.
“Jersey sponsorships provide deeper engagement with partners looking to build a unique association with our teams,” NBA Commissioner Adam Silver said in a statement. “The additional investment will help grow the game in exciting new ways,”
The ads should produce about $150 million, which will be split among teams and a revenue-sharing pool. 

It's part of a slippery slope, in which less prominent professional leagues--the WNBA, Major League Soccer--have already embraced logos.

A line has been crossed

Uni-Watch maven Paul Lukas wrote, on ESPN, Ads on NBA uniforms chip away at fan-team bond:
The debate on this issue usually boils down to some variation of, "The owners are driven by shameless greed," versus, "You can't stop free enterprise, especially when there's that much money on the table." I've staked out my own turf in that debate (hint: I came up with the hashtag #NoUniAds), but we've all heard those arguments many times before and there's little need to rehash them now.
Instead, I want to talk about brand loyalty, because there's a sad irony at work here. The NBA, by adding corporate brands to its uniforms, runs the risk of ruining one of the most audacious examples of brand loyalty the world has ever seen.
Lukas points out that, even though players move around--remember that Jerry Seinfeld line about how fans are only cheering for the clothes--people stick with teams, and it's "one of the really special things about sports." 

Lukas warns that there will be more ads, and NBA uniforms might wind up like logo-crammed European soccer uniforms. He thinks fans will approach sports "with a more jaundiced eye... that the bond they once enjoyed with their team has been sullied."

I think that happened a long time ago.

Who'll be advertising?

Phil Hecken, a contributor to Lukas's Uni_Watch blog, added, in 'And So It Begins', some questions:
Will teams seek ‘local’ businesses (like, will Coca Cola sponsor the Hawks?) or will they simply open the process to the highest bidder? What kinds of ads will be acceptable (like, can Porn Hub or the Pot Growers Association of Denver buy ads?)? Is this really going to be a “three year trial” or is that just to give us a faint glimmer of hope that the ads aren’t permanent — initially the ads are going to be small box-sized (2 1/2 by 2 1/2 inches), but who is to say these won’t morph into giant WNBA-sized ads or soccer-style ads? 
He also warns that ads will likely be coming to the NHL.

Update: $4-$6 million

NetsDaily reports 4/25/16 (via SportsBusiness Daily):
But Brett Yormark believes the Nets could rake in between $4 million and $6 million a year from what he calls "naming rights for your team."
"We’re looking at it as something that will allow us to target companies which otherwise wouldn’t buy us," said Brett Yormark, CEO of the Nets parent company, Brooklyn Sports & Entertainment, "The uniform patch gives us a position that is local, national and global — all in one."
The league believes the sponsorship could result in $100 million annually...The Knicks could get as much as $10 million, SBJ predicts.
The Nets have long supported the idea and were the first team to sell a piece of practice jerseys, starting with a 2009 deal with PNY Technologies. Yormark says the opportunity will let the Nets sell not just the team but "Brand Brooklyn" as well.

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