This is a Rookie Contract piece. Rookie Contract is a column here on The Sideline Sports. It provides analysis on business deals and decisions in the world of sports, as well as reports on revenues, endorsements, and contracts. Read more here.
Advertising is present everywhere. It is an essential part of the international culture, and it transcends language, location, and income barriers. One of the more prevalent and recognizable forms — television commercials and product placement — have long taken advantage of the American obsession with cable television.
While a steadily increasing number of customers are now cutting the cord, the contract exclusivity of sports is keeping large demographic around. Every nook and cranny of a professional sports broadcast is stuffed with advertising; a home run is brought to you by Pepsi, while a field goal is kicked into a net emblazoned with the Allstate logo. It is utterly inescapable. The NBA advertises during games as much or more than the NFL and MLB. However, owners decided in April that advertisements will be on player jerseys beginning in the 2017-18 season. This is an unnecessary change with only a revenue jump as motivation, and it endangers the sanctity and simplicity of current jerseys as well as fan, brand, and team loyalty.
The NBA and its teams are a brand. The average franchise is now worth a record $1.25 billion, a 13% increase over 2015. The top three teams in value (New York Knicks, Los Angeles Lakers, and Chicago Bulls) are worth a combined $8 billion. The value is tied to the size of the individual market and television deals, the latter a huge piece of the value pie.
The league as a whole extended its TV deals with ESPN/ABC and TNT two years ago; the networks will pay up to the tune of $24 billion over the next nine years. This huge deal, combined with the steadily rising value of franchises, has attracted other products to NBA sponsorships.
Pepsi took over as the league’s official beverage partner, Anheuser-Busch signed on for another four years last December, and Tissot followed as the official timekeeper last October for $200 million over six years. It didn’t end there: Verizon replaced Sprint in November for more than $400 million over three years.
The majority of this rise in income is funneled to the players. The 2016-17 salary cap will jump to $94.1 million. The luxury tax line will increase to $113.3 million and the salary cap floor will be set at $84.7 million. The floor alone is $14.7 million more than last season’s regular salary cap. In reaction to this, contract totals passed $2 billion after less than 48 hours into the free agency period.
It’s clear that the NBA isn’t lacking in income. In fact, quite the opposite. So why are advertisements needed on jerseys, the one thing that has stood the test of time? While court dimensions and designs, arenas, and team play styles have all changed over the 67 year history of the NBA, the top portion of the uniform has stayed consistently simple and unobtrusive.
It’s something small that separates the league from its European counterpart; across the Atlantic, the team logo is the smallest element of the jersey, and is dwarfed by the multiple ad logos that surround it. In International soccer, clubs are directly associated with a brand, and the jersey is dominated by an enlarged logo of that brand. It has come to the point where it’s taboo for a high-profile player to seek endorsement deals outside of his club’s sponsorships companies.
That’s a worst case scenario, but one that is in the realm of possibility for the NBA. The ad patches were announced to be just 2.5 by 2.5 inches and stashed in the upper right corner of jerseys, but as more businesses see the advantages and overlap with team’s already with a sponsorship, there will be more logos and they will get bigger.
After all, the WNBA has been using ads on jerseys since 2011 and recently increased the size. While their attendance is consistently half that of men’s games and ads were an almost essential addition to help the league, the quick switch to a bigger size is a clue into the future agenda of the NBA.
Brand loyalty is a well-documented and powerful phenomenon. As is fan loyalty. What happens when those two are combined? A messy and dangerous situation for brands and teams. Paul Lukas, a contributing writer for ESPN.com and “UniWatch” blog owner, explained the possibilities best:
“Think about how brand loyalty usually works. Let’s say you like Cheerios…Your loyalty is ultimately based on how much you like the cereal. If they tinker with the product, all that internalized goodwill toward the box and the logo won’t be enough to keep you coming back. Brand loyalty is really product loyalty…[But] In sports, the product is changing all the time; players are traded, they retire, they move via free agency, and so on. As a result, the quality of the product is constantly changing as well. And yet we still keep rooting for those colors, that logo and that uniform, no matter who’s wearing it. It’s a remarkably powerful form of brand loyalty.”
This example seeks to quantify the strong bond fans have with their teams and what the inclusion of brands into that equation might tinker with. For example, say McDonald’s, Pepsi, and Chevrolet are the three official sponsors of the Washington Wizards. In an offseason shakeup the two fan-favorite players leave for another team. Previously, the fan may have liked the team less, but now a negative connotation is likely put into the fans’ mind with the brands as well.
It won’t stop them from rooting for the team, but it doesn’t reflect well on either party. What if that fan despises one of these brands but loves another? Should he have to “root” for that despised brand? Maybe players are associated with a brand their contracts or shoe deals compete with?
At the end of the day, fans and players shouldn’t have to deal with brands mingled with the team identities that have been left un-tinkered with for so long.
Advertising isn’t all bad. It’s the main contributor to the historical spending jump the NBA recently enjoyed, and we wouldn’t be having this discussion without it. However, there should be some areas of sports that are free from its clutches. The NBA is not in a situation where they need something more, definitely not enough to invade the jerseys with brands. This is a slippery slope the NBA needs to avoid. We’ve seen the disappointing results in European basketball and International soccer.
Let’s respect the fan and team bond and keep the uniforms as clear and undisturbed reminder of which team is wearing them. It doesn’t hurt either side and leaves the fans — the most important responsibility of the league — happy.
18 year old Washington sports fan and Penn State freshman. I'll cover the MLB, NFL, and NBA.