SBD/July 20, 2012/Leagues and Governing Bodies

NBA BOG Supports Jersey Sponsorships; League Could Implement Plan By '13-14

The ad patches would be placed on the left shoulder where NBA logo is located
NBA jerseys "almost certainly will feature small sponsorship patches on the shoulder area in two years, a move that league officials estimate could generate" $100M in revenue annually, according to Ken Berger of CBSSPORTS.com. The NBA BOG discussed the issue Thursday in its annual summer meeting, and NBA Deputy Commissioner & COO Adam Silver said that "there was virtually unanimous support for adopting some form of jersey ads." Guidelines for jersey sponsorship "are expected to be approved in September -- paving the way for the money-making ads on jerseys in time" for the '13-14 season. Silver said that the patches "would be 2.5 inches-by-2.5 inches." Silver: "My sense is that every team is in favor of doing this in some form." The sponsorship patches "would be placed on the left shoulder of the jersey, where the NBA logo currently is located." Silver said that the patches would "appear on retail jerseys, as well." Berger wrote that is a "concept that could cause backlash among some fans who don't want corporate logos on the jerseys they buy in the sporting goods store or online." But Silver said that league officials "consulted with jersey manufacturer Adidas, and early indications are that sponsorship patches would not harm retail jersey sales" (CBSSPORTS.com, 7/19).

TRIAL RUN: In next week's SPORTSBUSINESS JOURNAL, John Lombardo notes a similar patch "was tested during the NBA Finals," when the Heat and Thunder "wore a league-branded patch on their uniforms during the games." NBA team execs at this week's league presidents meeting "were shown video of the uniforms." However, "no final decisions were made." Also under discussion was "whether teams should be allowed to sell the jersey sponsorships as local inventory as opposed to there being a leaguewide deal, though some of the league's larger sponsor categories likely would be protected." The NBA "would have to approve all deals, and there also is talk of adding a still-to-be-determined price floor to the deals to protect the value of the inventory." Teams "would not be able to sell different logos for home and away uniforms" (SPORTSBUSINESS JOURNAL, 7/23 issue). In Las Vegas, Taylor Bern writes, "If you've ever wondered how a Staples logo would look on a Los Angeles Lakers jersey or an American Airlines emblem on the Miami Heat's chests, you may soon find out" (LAS VEGAS SUN, 7/20).

BIGGER IS NOT BETTER: Syndicated radio host Dan Patrick said of the NBA possibly signing a jersey sponsorship, “I thought baseball was going to do this first.” Patrick noted the practice of putting sponsorship on jerseys is prevelant in soccer, but that is "different because we’ve grown up seeing that sponsorship." Patrick: "You‘re not even sure the name of the team.” The poll question on “The Dan Patrick Show” showed 70% of respondents were not in favor of a jersey sponsorship, with Patrick saying that it “depends on how intrusive it is.” Patrick: “If it’s like a soccer jersey, than I’ve got a really big problem with it because then it’s not the Yankees or it’s not the Miami Heat. It’s going to be Dunkin' Donuts.” Patrick said of these sponsorships, “It starts small and then we go, ‘Boy, that’s a great thing.’ Then you look at NASCAR and now try to find a spot that’s not sponsored on the driver” (“The Dan Patrick Show,” 7/20).

NEW CBA SHOWING EARLY RETURNS: NBA Commissioner David Stern said that Silver at Thursday's meeting “gave a ‘very optimistic’ report to the owners about the early workings” of the new CBA. CBSSPORTS.com's Berger noted the league “is projected to turn a profit next season and the season after that" after losing an average of $300M a year under the previous CBA. Stern: "We had a very happy group of owners in that room. Adam gave a report that our ratings are up 28 percent over the last decade, while [overall] television ratings are down around 30 percent over the last decade." He added that the NBA “is projecting its best year ever next season in both ticket and sponsorship revenues.” Team owners “also approved several enhancements to the instant replay rules that were recommended by the competition committee in June” (CBSSPORTS.com, 7/19). Among the enhancements is that officials will be "able to review goaltending calls in the last two minutes of regulation and all of overtime." Meanwhile, Stern said that the NBA "is on track to approve the sale of the Grizzlies to Robert Pera." Meanwhile, he said that the "harsher new luxury tax rates, set to go into effect in 2013-14, are already making teams think harder about spending -- and especially about handing out long-term contracts." Stern said that the NBA "this season is also using a new form of revenue sharing, one that will make at least 25 teams profitable within the next three years." He added that "a majority of the five unprofitable clubs will be so by choice, ... meaning they will authorize some temporary overspending in pursuit of a title." SI.com's Zach Lowe writes, "One presumes a couple of small-market clubs -- Memphis, Sacramento and New Orleans -- may struggle to turn a profit for involuntary reasons" (SI.com, 7/20).

NBA'S FUTURE IN THE OLYMPICS: In Las Vegas, Steve Carp reports the "continued use of NBA players in the Olympics" was not discussed during the meeting. Stern "has supported limiting players to age 23 and under," an idea that USA Basketball G Kobe Bryant said was "stupid." Stern said, "I don't have a position. I said that after 20 years it's time for the owners to think about what other options there might be. ... I said one option is what soccer does, which is 23 and under." He added, "There are other options as well. So based on that, I think Kobe is right. Maybe it is a stupid idea and soccer is stupid. But we should see how it works out. But I would never argue with Kobe" (LAS VEGAS REVIEW-JOURNAL, 7/20).

INTERNATIONAL INTRIGUE: The NBA Thursday announced its '12 international preseason schedule, which finds 10 teams participating in nine games. The Mavericks and Celtics will play top European teams as part of the NBA Europe Live series, while the Heat and Clippers will play two games as part of the NBA China Games. The NBA Canada Series will see the Raptors and Knicks play in Montreal, while the T'Wolves and Pistons play in Winnipeg. The Magic will take on the Hornets in Mexico City for the NBA Mexico Game (NBA).
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