The value of ever-changing jersey patch deals
Because I’m from Philadelphia, where the Phillies were the first North American sports franchise to “achieve” 10,000 losses, the current success of the MLB club and the undefeated Eagles makes me more neurotic — as well as joyful.
“The purpose of art is to wash the dust of everyday life from our souls.” –Picasso
When the Knicks wrap up their season tonight in Memphis, the game against the Grizzlies will provide a stark portrait of jersey patch sales across all sports. While the game features one team representing the NBA’s most marketable and another featuring young star Ja Morant, neither the Knicks nor the Grizzlies will speak with an advertising crest affixed to their jerseys.
Ever since the NBA launched uniform advertising among America’s top sports properties for the 2017-18 season, both teams have had patch sponsors. But the Knicks’ deal with Squarespace expired after last season, and the Grizzlies’ deal with FedEx ended after the 2020-21 season.
Now with over 140 uniform ad positions available in MLB, MLS, NBA and NHL, and a recession lurking like a black cat in the way of an economy still not fully recovered of the pandemic, there is a glut of supply and a decrease in demand. Budget season is upon us and marketing spend is always the first to be cut. Depending on who you ask, the recession has already started.
“There are a lot of headwinds,” acknowledged Adam Davis, North America general manager of marketing firm Two Circles, which sells publicity patches for the Phillies and Sharks. “I have a client who is looking at a $30 million shift in their marketing budget in terms of what gets approved; that’s the difference between making a fix and not making one.”
Excel Sports Management was instrumental in securing over a dozen uniform ad patch deals and is now in the market with uni patches for the Angels and Hawks, while consulting on activation for sponsorships of Celtics/VistaPrint and Mavericks/Chime fixes. “In this economic climate, with so much inventory available, teams have to be very intentional and pricing is starting to look a lot more realistic,” said Emilio Collins, Excel Partner and Chief Commercial Officer. “It can easily be an 18 month process. Brands want to see a more holistic story, combined with lots of additional assets that make it work. »
Does this mean the Knicks will go the entire season without an ad patch? Are the Trail Blazers, Grizzlies and Wizards also destined for the same fate? Seems likely. “Too much inventory and too much uncertainty,” said a senior sales executive at one of those patchless NBA teams. “It’s not a healthy combination. So, of course, it’s a buyer’s market.
|NBA Team Jersey Patch Deals|
|Mowers||Honey||Pistons||United Wholesale Mortgage|
|falcons||Sharecare||Rockets||Money Karma Credit|
|Heat||Kronos Ultimate Group||Spurs||Self-financing|
|Jazz||Qualtrics||Thunder||Stops on the journey of love|
|kings||Numeric keypad||Trail Blazers||nothing|
Difficult times foster innovation. In this melee between Ilitch Sports & Entertainment, which quietly tried to build a double patch deal by combining its two greatest assets: the Red Wings and the Tigers.
Back in the days of my father and grandfather’s advertising agency, long before “differentiation” was firmly established within the lingua franca of marketing, they would have called it a USP – Unique Selling Proposition .
“We also featured them separately, but together it’s an intriguing sales story, especially for a partner who wants to do something all year round,” said Chris Coffman, Senior Vice President/Partnerships company of Ilitch Sports. “Demographically and year-round, it has a wide range and works for both indoor and outdoor activations. For the right customer, this could be a real value proposition.”
MLB’s 4×4-inch ad patches are set to debut next season. But fewer than a handful of deals are closed, and asking prices have generally started out more than teams received for naming rights. For MLB teams without rights, these could be legitimate replacements.
“Wrigley, Yankee Stadium and the Dodgers should be able to preserve the nostalgia of their buildings while adding revenue,” said Basia Wojcik, vice president/sports at The Marketing Arm. “MLB has the advantages of more plays, static shots and longer plays But they will have to find marks on the inside to stand out [during a recession].”
Nielsen data (see below) estimates that the MLB patch will generate approximately 13.8 minutes of exposure next season, more than twice as much as an NBA patch. Nielsen’s estimate of the value of this exposure is $76,234 per game, compared to $24,816 for the NBA. “Big brands probably won’t do deals like this to gain exposure, but the unique opportunity to be the sole business partner on the Yankees or Dodgers uniform may outweigh that,” said Andrew Lafiosca, Senior Vice President of Nielsen/Teams.
A few unanswered questions: How will the planned 20-30 minutes that MLB hopes to cut its games next year with a pitch clock and other rule changes impact the value of ad patches? What about switch hitters? And will the 3x or more exposure benefit for MLB patches mean his teams can charge 3x for that asset?
“The MLB jersey patch will appear on screen more times than all the others combined,” Davis said, hoping to match or surpass the low ten-figure-per-year contract he has for the Phillies. obtained from Crypto.com for the 76ers jersey when he was CCO at Harris Blitzer Sports & Entertainment. “There’s nothing like crypto to push the market now, but all eight major media markets (MLBs) should have deals by Spring Training.”
Oak View Group sells the Mets jersey patch, and Global Partnerships President Dan Griffis said “brand fit” is as integral to those first MLB patch deals as they are to the first. sponsorship of a site’s naming rights.
“For the Mets, ideally, it should be a challenger brand, maybe with a chip on their shoulder, who wants to be seen as fighting the big guy every day,” he said. To add utility and value, Griffis advocates an interactive/scannable patch, which could tie into an ever-changing menu of marketing programs. But are fans ready for a QR code on their player’s sleeve? Favorite MLB?
“The novelty of the patches is fading, but there can still be tremendous value,” said Michael Neuman, managing partner at Horizon Media’s Scout Sports and Entertainment. “To judge this, we are looking for a minimum ROI of 3:1 on media value. But brands need to consider these offerings and their value in full across their various lines of business and with additional assets at the beyond the simple patch. These can potentially offer more value than naming rights for a team that goes deep into the playoffs, like the Padres. But they will be a liability if not fully supported. .”
- Gatorade has signed Pistons guard Jaden Ivey to an endorsement deal, and he will join other NBA players such as Zion Williamson, Jayson Tatum, Damian Lillard, Paul George and Karl-Anthony Towns as ambassadors of the brand, notes SBJ’s Austin Karp.
- Stacy McWilliams, the NBA’s senior vice president/marketing and business operations team, told my colleague Eric Prisbell that “well over half” of the league’s 30 teams have international marketing deals, and most of those teams have multiple agreements. McWilliams added that the NBA does not prohibit teams from doing business in any country.
- Esports outfit Gen.G has tapped marketing agency Sportfive for a multi-year global strategic alliance, notes SBJ’s Hunter Cooke.
- Japan-based Kubota has entered into a sponsorship deal with Trackhouse Racing, aligning its tractor company subsidiary with Ross Chastain, an eighth-generation watermelon grower turned NASCAR Cup Series driver, SBJ’s Adam Stern reports.
- American Express is now the official payments sponsor of Climate Pledge Arena and UBS Arena, SBJ’s Bret McCormick reports. Sources told SBJ that the deal is in line with other major deals at AmEx sites where brands spend around seven figures over terms typically three to six years.