NBA breaks the US marketing ice

I believe every American basketball fan is already aware that if they want to own their favorite team’ jersey without a sponsorship logo, they must hurry with the purchase, as the NBA’s Board of Governors announced last year, the NBA starts with a three-year sponsorship pilot program this upcoming 2017/18 season. This means that each team can sign a sponsorship contract to allow ads on players’ jerseys.

Their apparel partner’s logo, which is Adidas until the end of this season and will be Nike from the beggining of next, will appear on the right side of new jerseys and the team sponsor logo on the left side in the form of 2.5-inch square patches.
Commissioner Adam Silver did not specify potential earnings from the new sponsorship program, as he said each team would be responsible for their own sales, and some could decide not to participate in the program, but they predict it could be around $100 million annually. This sponsorship advertising system is precedent in the United States (at least in the major leagues), which immediately attracted the interest of many companies, but even though it has been a year since NBA announced this program, only 6 franchises signed a sponsorship contract so far.

million $ per year for 3 years - value of sponsorship deals signed by 76ers and Kings

New sponsorship programs bring far more opportunities for partners to get closer to our fans and our players,” says Adam Silver. Even though this program seems closer to the famous saying “money makes the world go ’round”, let’s not judge the NBA’s decision to claim even more money than they already have, especially in these financially uncertain times.

This kind of sponsorship deal is not a novelty in Europe though; such practice has been taking place for a long time here, so we can easily say there is almost no sport that is not tied to a sponsorship agreement, either by individual or a tea. On the other hand, with this sponsorship program, the NBA becomes the first US major league to approve private sponsors’ ad on players official jerseys.
They believe that this practice might be crucial to American sports marketing, because if it’s successful, other teams will probably go along the same path.

million $ per year for 3 years - value of sponsorship deals signed by Celtics and Nets

In order to remain competitive in a global market, their aim is to draw not only American but also foreign companies into sponsorship program. We have to note that the NBA claims this whole project is on ‘probation’ because, apart from the additional sales revenue, fan’s opinion is just as important because, even though some fans might dislike the idea of a sponsor logo on their team jersey, most of them will eventually accept it, especially if all of this appear as a good choice for team management and a good way to improve the game.

I think Nike is ready to take it to another level.

Adam Silver

Commissioner, NBA

Let’s go back to the exclusive apparel provider of the league. As we mentioned earlier, with the beginning of the 2017/18 season, Nike is taking over. Nike is taking up the torch from Adidas, who carried it proudly for 11 years. Last year Adidas announced that it would not seek to extend its deal with the league.

Was this change of the apparel provider motivated by dissatisfaction with the jerseys that Adidas produced for the NBA, which unlike previous ones – were short sleeved – we can’t be entirely sure, but although the NBA thanked Adidas for good cooperation over many years, they concluded that Adidas as a sports apparel manufacturers are more dedicated to football than basketball. They think football is a much better environment for Adidas. Numerous criticisms lodged against Adidas surely didn’t help.

While Adidas representatives defended their short sleeved jerseys, considering those are more wearable than sleeveless jerseys and as such could increase their sales, fans were constantly criticizing. But not just fans.

Do you remember the New York Knicks vs. Cleveland Cavaliers game in 2015, during which LeBron James ripped his jersey sleeves? King James did not like his sleeves either.

million $ per year for 3 years - value of sponsorship deals signed by Utah Jazz

Statements were also made by some college coaches who claimed that Adidas consistently produces ‘unattractive’ jerseys and generally doesn’t do a very good job, which then turns their attention to competitor producers. This is one of the reasons why Under Armour became the No.2 sports apparel manufacturer in the US, pushing adidas to No.3. Nike is, of course, still holding 1st place.

Nike has been a marketing partner of the NBA since 1992. They produced replica jerseys under the Swingman line at a NBA retail. Nike and its associated brands have control over more than 90% of the U.S. basketball shoe market at retail. The company has deals with many of the league’s biggest stars, including LeBron James ( lifetime deal), Kevin Durant, Kobe Bryant, Kyrie Irving and Russell Westbrook.

From next season, Nike will be the first official apparel provider whose logo will appear on NBA game jerseys, with the exception of Charlotte Hornet’s jerseys. This franchise will replace Nike’s recognizable logo with the logo of Nike’s Jordan Brand, which is very much understandable when we know that Hornets owner is the star of this brand himself – Mr. Michael Jordan.

Nike and NBA have signed an eight-year deal worth $1 billion. Both sides seem pleased with new cooperation.

As we can see, there are many novelties in the NBA league sponsorship market, almost as if those are the reasons enough to look forward to start of the new season. Apart from the court, it will be interesting around it too, and here’s why:

Although the NBA’s management has high hopes for the new sponsorship program, believing that the results will be positive, as new revenue will be invested into the game contributing to its improvement, and therefore marketing, many fans do not share their opinion.

While some believe that audience is already fed up with advertising and it’s very questionable how they will react to even more, others are bitter as they think the league is selling out and losing its integrity this way, whilst Brooklyn Nets fans, obviously don’t like the appearance of their team’s new jerseys.

However you look at it, we can’t deny that the economically healthy league is also a happy league, and with a minimum addition of $100 million in revenue and an astronomical contract with NIKE – NBA hits from downtown!

 

Ivan Šolić

Ivan Šolić

Overtime Sports Marketing

If you have any questions about sports marketing, feel free to contact me at aurumaureo@gmail.com

Article sources:

nba.com

espn.com

youtube.com

twitter.com

digitaltrends.com

cbssports.com

Photo source:

Opensponsorship.com

 

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