USA Today recently reported that the NBA and NHL were both looking into allowing some form of advertisement directly on game (practice) uniforms – see below the post for examples and the various league’s stances

Although this practice has been around for many years in European sports and many sports purists will make their argument from a sports perspective, I thought I would try to give a more economic look at the same issue. I think the thinking behind advertisements on jerseys as a revenue generator is pretty straightforward but I really think that by not having a league-wide policy or making this a league-wide initiative there is a major potential pitfall with respect to corporate naming rights and conflicting jersey advertisements  for all the major sports. Please allow me to explain…

Naming Rights & Brands Collide

The idea of putting your corporate name on the outside of a stadium or theatre is not new, but the money that has been spent on these naming deals over the past decade is staggering.  I believe that a significant amount of the money currently being spent to purchase the naming rights (see ESPN’s list of naming right deals) will either be cannibalized by this way of affiliating with sports or that more likely the owners of the naming rights will want to start imposing restrictions on who can or cannot be a jersey advertiser. Let’s take that last point a little bit further.

I do not want to debate the branding merits of attaching a corporation’s (or product’s) name to a building that most people will associate with the team(s) that play in. However what I do want to point out is that a major problem is brewing if leagues start allowing advertising on jerseys and those advertisements start to become a part of the way people recognize that team. Then you are faced with a situation where a company has poured millions of dollars into an affiliation that they really thought would be with the team that played in their stadium only to now really only have the affiliation with the stadium. No company really cares about people driving by the stadium who take note of their brand name. They care about the millions of people who come in person or watch on television and hear their brand name repeated over and over againg in the same breath as the team name. Just think about every sports broadcast and the opening that goes roughly “live from Company Name Field, today’s game features the Insert Team against the Insert Team.” Now fast forward a few years when teams have been wearing advertisements on their jerseys for a few years and people start to recognize a team’s jersey based partly on the branding on it (are Air Emirates and Arsenal Football (see jersey here) not intrinsically linked?) and tell me that problems will not arise if the stadium naming rights owner does not purchase the jersey advertising space. Do you think Coca-Cola wants to see the Houston Astros running out onto the field at  Minute Maid Park (naming rights that cost $6 million a year and $170 million over the life of the deal) with Tropicana advertisements on the jersey? What happens when Coca-Cola  says to the Denver Nuggets that they are willing to pay Carmelo Anthony’s entire contract (over $15 million a season based on 2009) for the right to brand their jerseys? Will that mean Melo suits up sporting a Coke Zero patch while running out the tunnel in the Pepsi  (a name that cost over $3.4 million a year) Center?

Even if teams are going to give current naming rights owners the first opportunity to advertise on jerseys there is a potential major issue on the horizon and not having a concrete league-wide (see below) policy is going to come back to bite one of the majors (NFL, NHL or NBA) right in the arse.

Of course while this purely a revenue play and I’ve tried to look at it as such there are still times where a sports league needs to think about its fan base rather than its corporate customers and need for a boost to the bottom line so I’ll conclude this way – I get that sports teams and leagues are looking for revenue. I get that as a sports team owner you need to constantly be looking for revenue sources and ways to generate the humongous payrolls that star players demand. I get that iff you are an athlete you are already throwing on a jersey where you generally care more about the name on the back (your own) than the team name on the front (Hockey Canada excluded) and as such what do you care if there is advertising patched on your shoulder. Most star athletes already have endorsement deals and so the fact that their employer signs a few shouldn’t bother them…BUT if you are a fan and purist you certainly won’t love the idea of jersey’s being covered in advertising and (at least IMO) may feel that the leagues are really doing themselves a disservice by cheapening their sport with gimmicks that do nothing to improve the game or the fan experience.

Bottom line is that whether advertisements and naming rights collide or fans are just turned off there is potential for a major pitfall here and the revenue earned from additional advertising might be wiped out in the lessening of naming right values and a decrease viewership and replica jersey sales.

As always I would love your comments and feedback…Retweets are greatly appreciated

The NBA & Advertising on Jerseys

Beginning this season the NBA will let teams sell ads on their practice jerseys, says deputy commissioner Adam Silver, who adds the league is continuing to explore the issue of ads on game jerseys. “We are operating a diverse business all around the world,” Silver says. “(The sponsored game jersey) is a well-established practice in other countries. Ultimately, I think our fans will come to accept it.” WNBA teams were allowed to sell ads on game jerseys this season and two teams took advantage. The WNBA’s Phoenix Mercury and Los Angeles Sparks featured LifeLock and Farmer’s Insurance, respectively, prominently featured on the front.

The NHL & Advertising on Jerseys

The NHL which pushed the envelope 30 years ago by allowing teams to sell advertising on the boards — is going high-tech to attract corporate dollars by offering marketers the chance to insert so-called “virtual” ads inside national game telecasts on NBC and Versus. These computer-generated signs, typically superimposed on the crowd, are only visible to TV viewers. and not to fans at the game.

“As with anything new, you weigh tradition with the commercialization of sports,” NHL deputy commissioner Bill Daly says. “Obviously, sports are becoming more commercialized each and every year. We have that debate internally all the time. Where do you draw the line? How much is too much? You have to protect the look and feel of the game. You look at professional hockey played in Europe and there’s advertising on jerseys and on the ice. You can have so much advertising on the ice that it can be distracting to players. There’s a balance there.”

The NFL & Advertising on Jerseys

The Tennessee Titans have had a small patch for a local hospital on their practice jerseys since relocating from Houston more than a decade ago, and the league put rules in place last spring to permit the activity league-wide. Five teams — the New York Jets, New York Giants, Indianapolis Colts, St. Louis Rams and Chicago Bears — have taken advantage, NFL spokesman Brian McCarthy says. The Jets will get more than $2 million a year from a deal with Atlantic Health that includes practice uniform patches and its name on the team’s training facility, says Matthew Higgins, the team’s executive vice president of business operations.

MLB & Advertising on Jerseys

Major League Baseball has no plans to add such advertising, says MLB president Bob DuPuy.


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