NBA Approves Jersey Advertisement Plan
We all knew it was coming, but we weren't sure when. However, the NBA announced that the board of governors has approved a three-year pilot program, allowing teams to sell corporate logos on their jerseys. ESPN reported that teams can start selling 2.5x2.5" space on jerseys for the 2017-18 NBA season.
That also will be the first season that Nike will make the league's uniforms, taking over for Adidas.
"It's my hope, independent of whatever additional revenues are generated through this patch program, that the greatest impact will be in this amplifying effect of companies choosing to associate directly with a team jersey, then going out and promoting that relationship to the largest market," Adam Silver, NBA commissioner, told ESPN.
Silver added that the league anticipates that the program will be worth about $100 million per year.
In addition to the new patches, the Nike swoosh also will be visible on jerseys for 29 of the league's teams. (Charlotte will use the Nike-owned Jordan logo. After all, Michael Jordan owns the team.) Current uniform-maker Adidas' logo does not appear on the jerseys.
Since the league doesn't know how fans will react initially, jerseys sold to fans will not include the sponsored patches, but teams will have the option of selling versions with the logos.
"The media landscape is changing," Silver added to ESPN. "People are watching less live television outside of sports. People are watching fewer commercials. This will become an important opportunity for companies for connecting directly with their customers."
Only two teams, including the Houston Rockets, voted against the patch program. Rockets owner Leslie Alexander didn't like the idea of this form of revenue sharing.
"We didn't think that was fair," Alexander told ESPN. "We have revenue sharing already and we think that is fair."
As we reported previously, the proposed plan allowed the teams to keep 50 percent of the jersey sale, with the other 50 percent going into a revenue-sharing pot to counteract disparity in market size for teams in larger cities.
In September 2014, we reported that the NHL also was toying with the idea of advertising on jerseys, but that it wanted another league to try it out first. With this move, we could see ads on our favorite hockey teams' jerseys sooner rather than later.