SBJ/September 24-30, 2012/Marketing and Sponsorship

NBA clubs’ revenue thirst may make for crowded stanchions

Terry Lefton
Call it a sign of the times. At every league, there’s a continuing demand for new team revenue in local markets. Considering how soft the economy is and the maturity of the ticketing, suites and sponsorship businesses, that need is now at record levels.

Over the years, we’ve become accustomed to the NBA waiting for others to pioneer ventures and then coming in after mistakes have been made and applying the lessons learned. It’s a considered approach we’ve learned to expect from the NBA, which we have long maintained with tongue only partly in cheek really stands for Nothing But Attorneys.

Static signs will share some NBA stanchions with LED signs, rather than be replaced by them.
Photo by: HUNTLEY PATON
Things at the NBA have changed as local team revenue imperatives have become more, um, imperative. The most recent manifestation of this comes in the form of the NBA looking to be the first of the big four stick-and-ball properties to accept non-endemic advertising on its uniforms. An even more timely example will be seen imminently in the somewhat arcane world of NBA stanchion signage, the most camera-visible signs on NBA courts. ANC pioneered NBA static stanchion signage in 2007, with State Farm taking most of the positions in the 21 NBA arenas where it has been installed.

Competitor Van Wagner is launching Daktronics’ digital LED stanchion sign this year (SportsBusiness Journal, May 14-20). So naturally, we assumed it would be a zero-sum game: NBA teams would opt for either static or electronic signage. That’s where we miscalculated the demand for incremental team revenue. Sources in which we have absolute confidence tell us as many as 15 NBA teams will begin this season with both electronic and static signage on their NBA stanchions. The additional LED stanchion signage will be near the basket support that holds the static signage, but farther back, and facing the corner of the court.

We’re fairly certain that the LED signs will not read Geico while the permanent sign touts State Farm. Keep in mind, however, that the NBA also allows an ad “wrap” around the basket support, and there is team branding on the top of the backboard and the league’s logo on the backboard. Call it “stanchion and backboard clutter.”

“Generally, the league and teams have held off on new [marketing/advertising] inventory, but we all see salaries and other expenses going up every year — it’s tough to say no anymore,” said Lara Price, Philadelphia 76ers senior vice president of business operations.

But there is more to the story.

ANC has developed its own digital stanchion signage, which was tested before a New York Liberty game in September. It has yet to be approved for NBA use, but we expect that will happen before the start of the coming season. So not only do we have clutter in stanchion signage, we have a cluttered market among stanchion signage providers. Of course, one man’s clutter is another man’s opportunity.

“What you are seeing is that teams and league over the course of a couple of years have realized that the stanchion advertising position has been undermonetized,” said Van Wagner Sports President Cliff Kaplan.
Lesson learned here: Never underestimate a mature industry’s interest in new revenue.

> SPONSOR FRIENDLY: Early on, licensees and sponsors are giving the NHL high marks for transparency in a lockout that few on the business side believe will end before the holidays.

Sponsors tell us transparency is there via highly secure conference calls with top league officials, including Commissioner Gary Bettman.

“They are being open, saying, ‘Ask me anything,’ and so sponsors are in the loop, even when there is not a lot of news,” said Kern Egan, who heads Haymaker, the sports agency for NHL Winter Classic title sponsor Bridgestone. Since many believe that the next NHL season will begin with the annual Jan. 1 outdoor game (if at all), the next big question from every NHL business partner is what the drop-dead date is for canceling the Winter Classic. Thanksgiving? Or is missing the Classic a sign that the season is dead. There are no answers, but these are just the leading questions among league business partners.

“The problems are so fundamental, it is hard to believe missing any particular time period will have any greater impact,” said Ed Horne, COO of Madison Avenue Sports and Entertainment and former NHL Enterprises president.

> COSTUME BALL: In a search for new categories, team marketers have ignored costume jewelry, but not the Boston Celtics. The team has signed Cranston, R.I.-based bangle, beads and bracelet maker Alex and Ani to a team sponsorship that Ted Dalton, Celtics vice president of corporate partnerships and business development, tells us is as significant as many of the team’s other partnerships. Alex and Ani, which is a licensee of the U.S. Olympic Committee, MLB and the Collegiate Licensing Co., but not the NBA (at least not yet), becomes the first presenting sponsor of the Celtics’ dance team and will get exposure on their uniforms, along with digital inventory, team social media inclusion and product exposure in the Celtics Dancers Calendar. Alex and Ani did a playoff deal with the Celtics last spring, a relationship that started when the jewelry maker leased retail space from a Celtics owner.

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

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