Despite the last place performance of the Philadelphia 76ers, the NBA team became the first North American professional sports team to sign a sponsorship for their jerseys. On Monday, May 17, 2016, the team announced that StubHub will become the first sponsor to advertise on a team jersey in the four major US sports. The deal, worth an estimated $5 million per year for three years, grants StubHub the rights to a 2.5-by-2.5 inch logo patch on the front left side of the jerseys.
The deal comes after the NBA agreed to a three-year pilot program beginning in the 2017-18 season. NBA Commissioner Adam Silver commented, “Jersey sponsorships provide deeper engagement with partners looking to build a unique association with our teams. We’re always thinking about innovative ways the NBA can remain competitive in a global marketplace, and we are excited to see the results of this three-year trial.” Under the agreement, teams will keep half of the revenues, with the remaining revenue stream going to a revenue sharing pool. According to those familiar with the league and team operations, advertising will generate about $150 million in total revenue.
Teams may sell the rights to any company that does not sponsor gambling, alcohol, or politics. Additionally, the NBA has granted protected status to most national partners, including media partners (ESPN, ABC, Turner), the apparel partner (Nike), and on-court partners – the official timekeeper, Tissot, and the official ball producer, Spalding. Protected status prevents competitors from purchasing advertisements on team jerseys.
The league’s move is unsurprising, as teams in the Women’s National Basketball Association (WNBA) and Major League Soccer (MLS) already allow advertising on their jerseys, while Major League Baseball (MLB) and the National Football League (NFL) allow advertising on practice jerseys and for special events. Recently, the NBA allowed Kia to sponsor the 2016 All-Star game jerseys. As for the relationship between the two parties, StubHub purchased the rights to the 76ers’ D-League team, the Delaware 87ers, for this season, as well as launched a recent partnership with the team as a sports start-up incubator and primary ticket sales merchant.
Fan responses have been mixed. Boston Globe sports columnist Christopher Gaspar commented, “There must be some safe space in sports where you’re not being pitched, prodded, or implored to buy something every second–a place where you can, you know, just enjoy the game. The NBA is not stopping with patches.” The league, however, has taken precautions to protect the fan experience. Jersey sales at home stores will include patches, while nationwide sales will be shipped without advertising.
Just as the 76ers have the best odds to win the NBA draft lottery this season, the odds are in the favor of the jersey sponsorship trend continuing to spread. Once the NBA realizes the additional revenue stream, it is unlikely they will choose not to extend and enhance the program – consider the opportunities when compared with Manchester United’s seven-year, $559 million deal with Chevrolet. Other US leagues have already decided to stay out of the business of jersey sponsorship, the NHL based its decision on jersey expectations in a recent merchandise contract with Adidas.