SBJ/Feb. 7-13, 2011/Marketing and Sponsorship

Big 4 jersey rights value put at $370M

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The four big stick-and-ball leagues are leaving a total of more than $370 million on the table annually by not selling jersey advertising, according to new research from Horizon Media.

The NFL, with its unrivaled ratings and concomitantly higher ad rates, topped the list for jersey valuations at nearly $231 million, or 62 percent of all potential big four jersey ad sales. However, the nature of football — with players more crowded together and with less static time facing the camera — means that the NFL offers the least of what the study terms "detections" among the four leagues, with 28,560 calculated over the course of a season. Baseball, meanwhile, with its typical center-field and behind-the-catcher camera angles, scored more than 314,000 detection opportunities.

The total jersey valuation for MLB teams came in at more than $101 million. The NBA total was $31 million, and the NHL at $8 million, according to the report.

Players' amount of static time facing the camera hurt the NFL's value but helped MLB.

While NHL teams posted the lowest monetary value in the survey, the NHL's quality impact score was second only to MLB. Hockey's fast pace of play provides for fewer detection opportunities during game action, but when play is stopped in the NHL, the exposure "duration," or amount of time the jersey is visible on-screen, is higher in hockey than other sports.

Using computerized exposure evaluation techniques and assuming a brand logo across the middle of a team's jersey that would occupy 3.5 percent of the TV screen — comparable to an English Premier League kit — the study formulated media evolutions for the NBA, NFL, NHL and MLB in their top 20 markets over their most recently completed seasons.

The study did not account for logo value in print and digital media, or from being viewed on-site.

Since the study made assumptions on a team's national broadcast appearances, it's not surprising that the top five NFL teams in exposure value are Dallas, New England, the New York Giants, the New York Jets and Philadelphia — all prime targets for the NFL's national broadcast windows.

Likewise, the top three MLB teams in exposure value are the New York Yankees, Boston and the New York Mets. The NBA list is led by the Los Angeles Lakers, New York and Boston, while in the NHL, the top three are Chicago, the New York Rangers and Pittsburgh.

The research noted that the list of teams for potential ad value of jersey sponsorships parallels Forbes' list of the most valuable sports teams.

Jersey ads are a common practice in most of the world, but the big U.S. leagues have thus far resisted selling their jerseys as billboards, except to brands such as Nike, Reebok and Adidas, which hold their apparel rights.

"We don't necessarily see this happening soon in the U.S.," said Michael Neuman, Horizon Media's managing partner for sports, entertainment and events, "but until the revenue potential is clear, it certainly won't go anywhere, and clearly this shows there is significant opportunity at a time when most of the big leagues are looking for new revenue."

Consider, for example, the NHL's exposure value of $8.17 million, compared with its current NBC contract, which is a no-rights-fee, revenue-share deal. Or imagine the incremental value jersey advertising could bring if it were bundled with TV rights for rights holders to sell.

POTENTIAL JERSEY SPONSORSHIP VALUES*
LEAGUE NO.OF
DETECTIONS
DURATION
(H:MIN:SEC)
DURATIONPER
DETECTION
QUALITY
IMPACTSCORE
MONETARY
VALUE
NFL 28,560 18:26:40 2.33 0.209 $230,911,504
MLB 314,280 273:36:00 3.13 0.308 $101,052,782
NBA 127,920 94:11:10 2.65 0.238 $31,186,931
NHL 74,620 60:08:00 2.89 0.248 $8,171,211
TOTAL 545,380 446:21:50 2.94 0.278 $371,322,428
* Values based on the 20 teams in the largest markets in each league, for a full season within each league. Quality impact score: A relative measurement of performance based on the duration, size, isolation and source type. Monetary value: A dollar amount representing the exposure value of a brand/sponsor/source. Source: Horizon Media

In England, Premiership club deals range in annual price from $32 million for the Aon-Manchester United and Liverpool-Standard Chartered deals to less than $1 million for Blackpool's sponsorship deal with online loan company Wonga.

Of course, the political machinations of jersey ads for the big four leagues are probably greater than what for some is a psychological barrier of swapping an Adidas or Nike logo for Coke or McDonald's. A leading question: Who would sell the uniform ads: networks, leagues or individual teams?

"If I'm an owner, I'm saying that's my real estate. And if I'm a network with league rights and I can't sell it, then I'm paying less for those rights," said Chris Weil, CEO of marketing agency Momentum Worldwide, whose client list includes heavy sports spenders like Coca-Cola and American Express. "You also might run into a problem if you ask a player to take a pay cut, as they are in the current [NFL] labor negotiations, and then sell space on what a player might consider his jersey"

Another constituency that could insist on a piece of the action are the jersey manufacturers, who are accustomed to having their trademarks on pro uniforms. There also likely would be conflicts between individual athlete endorsement deals and the company ad that's on the jersey the player might be wearing.

"My opinion is that it's been a business barrier stopping us from doing this rather than a belief that we would be violating something sacrosanct," said Phoenix Suns President and CEO Rick Welts, formerly the NBA's chief marketing officer. "I wouldn't say the leadership in our league is against it, but certainly we're not prepared to do it until it comes with a price everybody can be comfortable with. I don't think we're anywhere close to that now."

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