NBA Clubs Hire Firms to Help Sell Patches

Is the NBA really considering this?

(from Sports Business Journal, September 24, 2012)  While the NBA struggles with dividing nearly $100 million in potential revenue from sponsors, some teams around the league have already taken the necessary steps to make those sales.  For these teams, agents have been hired with the single task of selling the uniform logo patches.

Repucom, a major player in international sports research and consulting, has said they are working hand-in-hand with many NBA teams on determining the value of jersey advertising.  The NBA will not say what other teams have signed deals with Repucom or companies.  The Orlando Magic, on the other hand, has gone public with the hiring of Repucom in hope of striking a potential jersey advertising deal.

NBA clubs across the league believe that the sale of the new uniform ad logo will be among their largest financial gain, therefore teams are preparing for a rather lengthy negotiation period with the league before it is even clear who will be controlling this inventory. The sale of the uniform ad will not appear any earlier than the 2013-14 season.

Next month at the board of governors meeting in New York, League officials will take the next steps in addressing this matter.  For larger market teams such as the Los Angeles Lakers, projections are to be more than $5 million annually for the jersey ad patches. David Stern, the NBA league commissioner, believes that these ads have the potential to bring in as much as $100 million in annual revenue for the league, which is on average $3 million per team.

Any club within the league has the option to pursue deals with Repucom or any other brand analysis agency. “We are trying to do our due diligence now, and when the approval comes, we will be ready,” Magic CEO Alex Martins said, “nothing has been determined, but my sense is that it will be part of the board meeting [next month].”