The much-debated league effort to sell corporate logos on NBA jerseys is moving toward a vote among owners after the league’s planning committee, chaired by Philadelphia 76ers owner Josh Harris, revisited the issue starting last July.
League sponsor Kia had its brand on this year’s All-Star Game jerseys. Its mark was also on the jerseys that were sold at retail. Sponsors of the various skills competitions on Saturday night also had their logos on competitors.
A vote to bring that relatively small patch — 2.5 inches by 2.5 inches — to jerseys for the 2017-18 NBA regular-season could occur in April, at the owners’ meeting in New York.
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Kia had its brand on All-Star Game jerseys.
Photo by: GETTY IMAGES
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A number of sources throughout All-Star Weekend said a proposed 50-50 revenue split from logo sales between teams and the league was a fair resolution after years of working on a solution. The concern among teams has been balancing what large-market teams potentially could bring in for revenue from deals they sign compared to smaller-dollar deals for teams in smaller markets. In this scenario, if a team sold a jersey sponsorship for $10 million, it would keep $5 million, with the remaining $5 million going to the league and then shared equally among teams.
“It’s been really hard to come up with a balance that works for the league and big- and small-market teams,” said Golden State Warriors President and COO Rick Welts. “It’s a big step, but I think the league has struck a good balance between caution and recognizing we can’t ignore the inevitability of this.”
Sponsor conflicts between the league and teams remain inevitable, though.
If approved, the logos will begin to appear on NBA game jerseys in fall 2017, when Nike replaces Adidas as the league’s uniform outfitter. Of course, that timing means the new ads will have to compete for attention on the uniforms with the Nike swoosh, which will debut on the new jerseys as part of the new outfitting agreement.
■ NEW HOUSE: The National Basketball Players Association took over the Thompson Hotel in Toronto during All-Star weekend to promote its own One Court brand. The union sold sponsorships to 15 brands, including Warner Bros., Armani, Monster and Remy Martin.
The end of a 21-year arrangement that has seen the union selling and assigning its group licensing and marketing rights to the league seems inevitable — and we’re not saying that simply because two senior executives from Fanatics also visited what was called the Players House for the weekend in Toronto. Part of a union meeting attracting 65 players to the House was dedicated to talk of taking back group licensing and marketing rights. Also discussed was the value of group sponsorship and logo rights.
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The NBPA took over the Thompson Hotel to promote its One Court brand.
Photo by: TERRY LEFTON / STAFF
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The union will receive $38 million for group licensing/marketing rights this season, a new high. But is that sufficient at a time of record revenue for the league?
“NBA franchise evaluations, TV rights and ticket money have never been higher, yet over the years we’re basically behind everyone, including at times the NHL, when it comes to licensing and marketing revenues distributed to players,” said NBPA Chief Marketing Officer Jordan Schlachter inside the hotel’s rooftop bar, dubbed the Monster Lounge for All-Star weekend.
Schlachter presented three likely outcomes: the status quo, which seems improbable; the union taking back all of its licensing and marketing rights; or a hybrid model, which seems the most likely, especially with the growing thirst by marketers for off-court content from NBA athletes.
A union decision on ending the licensing agreement would likely have to come this year. This year also brings the time, in December, when players or owners would have to announce their intention to opt out of the current collective-bargaining agreement, which otherwise is set to run till 2021.
Player-centric licensed products requiring longer lead times, like video games and trading cards, will be paying close attention.
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NBA International’s Brooks Meek and Yao Ming at the Basketball without Borders Global Camp.
Photo by: NBAE / GETTY IMAGES
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“We don’t want to disrupt the marketplace,” Schlachter said, “but at the same time, we want to maximize the value of our players.”
At a minimum, expect the Players House to be part of every big NBA event going forward. Sneaker companies are already asking how they can fit into next year’s house.
■ ROLL IT OVER: Last year, the Cleveland Cavaliers became the first NBA team requiring season-ticket holders to agree to an automatic
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Retired Gen. Martin Dempsey, chairman of the Jr. NBA Leadership Council, poses for a photo with local youth following the inaugural Jr. NBA Day at Air Canada Centre.
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renewal policy. Since then, the idea has caught fire around the league.
At least 16 teams now offer the auto renewal policy to season-ticket holders, including the Charlotte Hornets and the Philadelphia 76ers.
“We are seeing a lot of traction on the concept of the ‘continual season ticket,’” said Amy Brooks, the league’s executive vice president of team marketing and business operations. “It’s an opportunity for our fans to engage with the team over time.”
As was the case with the Cavs, teams
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The Thunder’s Kevin Durant poses for a photo taken by chef Guy Fieri during the All-Star Game.
Photo by: NBAE / GETTY IMAGES
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typically structure these auto renewal policies by contacting their season-ticket holders via email with a dues notification form that outlines terms for the coming season. The benefit of these plans for the ticket holders is a wider range of payment options: annual, quarterly or monthly plans, in which they are automatically renewed, unless they opt out.
“It makes sense for the fan to pay over the course of a year,” Brooks said. “It is also more efficient for our teams. They can spend more time on those who have indicated that they may not want to renew.”
Automatic renewal can be a key factor
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Retired Gen. Martin Dempsey huddles with Jr. NBA Day participants.
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driving season-ticket sales. More than half of the NBA’s 30 teams have at least 10,000 full-season ticket sales this season, and the NBA is on pace to break last year’s record of 700 sellouts.
“Our fans have embraced it,” Brooks said. “It’s definitely a trend.”
■ SPONSOR WRAP: Crossing national borders was difficult for some NBA corporate sponsors — like Verizon, which seemed invisible outside of TV ads and its sponsorship of the best dunk competition in years. Pepsi’s Mountain Dew, however, had an
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The Raptors’ DeMar DeRozan and his daughter and Kyle Lowry and his son fill food hampers for NBA Cares Day of Service.
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impressive out-of-home campaign in Toronto, featuring an All-Star DJ platform, a 3-D virtual reality art demonstration, retail packaging with
Russell Westbrook and a dedicated TV ad that drove home its message of lifestyle/off-court integration with the NBA players and fans.
“Mountain Dew set the benchmark for activation here, and it’s their first year,” said Emilio Collins, NBA executive vice president of global marketing partnerships, referencing that this is the first season for Mountain Dew parent PepsiCo as an NBA sponsor.
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Milwaukee Bucks owner Marc
Lasry dribbles during the NBA All-Star
Celebrity Game Presented by Mountain Dew.
Photo by: NBAE / GETTY IMAGES
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At a rather desultory NBA fan fest, dubbed Centre Court this year and located more than two miles from the Air Canada Centre, Samsung’s activation was the lone standout in an ocean of sameness due to its virtual reality product demos.
Tissot, another new league sponsor this season, has five team affiliations and is poised to expand its selection of identified watches from six to 12. However, integration within the NBA’s timing system and clock branding won’t happen until next season.
“The notion of a [branded] 24-second clock got a lot of attention [when the company signed its NBA deal in October], but we’re working toward an integrated scoring, timing and statistical system,” Collins said. “That’s something we’ve never had before, and all that integration has to be tested thoroughly.”
On the sales front, the NBA is pursuing opportunities in the travel, personal care and packaged goods categories, but Collins said, “It’s more about finding the right integration story and platform, like Tissot for timing or Mountain Dew for lifestyle, or it won’t make a whole lot of sense.”
Upcoming renewals for the NBA include Taco Bell, a league partner since 2009, along with Diageo, Samsung, Kumho Tire and Foot Locker.
■ NEW SHOES: Whatever direction Adidas basketball is headed, it will be without NBA marks. Nike takes over those rights after next season, so Adidas will have to establish an identity sans NBA rights for the first time since 2006.
Marquee endorser James Harden showcased the Crazylight Boost 2.5 shoes during All-Star weekend. Chris Grancio, general manager of global basketball at Adidas, said to look for other signs of an entirely different look and feel going forward.
“Historically, we’ve been safe. Now, we want to be polarizing,” Grancio said, speaking from the brand’s All-Star suite in a downtown Toronto office building. “We want to have products people are arguing about. We’re also changing the way we connect with high-school kids. It isn’t about the 30-second TV commercial anymore, though we may still do some. It’s about engaging those kids every day on digital and social, and making that ongoing relationship pay off, because they will probably be shopping and paying for our products from a mobile platform.”
■ HIVE TALKIN’: A contingent of about 50 people from the city of Charlotte and the Hornets organization traveled to Toronto over All-Star weekend as they get set to host next year’s event.
With the exception of the frigid weather, Charlotte organizers would do well to duplicate Toronto’s approach to the NBA’s jewel event.
“I will go on record that we will have better weather,” joked Hornets chief sales and marketing officer Pete Guelli of the sub-zero temperatures in Toronto.
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The torch was passed to the Charlotte Hornets, who will host next year’s event.
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Hornets and Charlotte officials were all business as they conducted walk-throughs of the various events in Toronto while addressing arena operations and safety matters. Atop the Hornets’ agenda is finishing the $40 million renovation of Time Warner Cable Arena in time for next February. The team will contribute around $6 million to the renovation project, which will include a new $8 million scoreboard and the completion of upgrades to the arena’s 60 suites.
The arena will be shuttered for eight weeks this summer to complete the renovations.
Meanwhile, Guelli and Hornets President and COO Fred Whitfield are working to secure additional sponsors for Charlotte’s All-Star host committee, which needs to raise $1.5 million to offset operating costs of the league-run event. Novant is title sponsor of the host committee; more partners are expected soon.
■ SATURDAY NIGHT’S ALL RIGHT: This year’s All-Star Game was one week removed from another jewel sports event: Super Bowl 50. For Golden State’s Welts, thoughts on that past weekend in California were still fresh in mind while focusing on All-Star in Toronto.
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The Warriors-Thunder game the night before the Super Bowl proved to be a big hit.
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Welts said he’d been lobbying for a home court Super Bowl-eve matchup for the Warriors against a premier opponent almost since he knew Super Bowl 50 was headed to the San Francisco market. The Warriors drew Oklahoma City for that Feb. 6 tilt, and it was one of the glam events of Super Bowl Week in the Bay Area, attracting celebrities including Beyoncé, Jay Z, Kate Hudson, Jim Harbaugh, assorted NFL players, owners, and, not coincidentally, an average of 3.2 million television viewers on ABC — making it the most-watched regular season NBA game since 2014.
There have always been NBA games played the day before the Super Bowl in the host city, but Welts now is lobbying for similar top-tier matchups every year.
“Now that we have a Saturday night TV package, it’s essential,” Welts said, speaking outside the annual NBA Tech Summit. “We can own the night before the Super Bowl, which is no small thing. We need this to be a front-and-center, high-profile event every year.
■ PARTY ON: The All-Star Game is a league-run event, creating a chore for host teams to meet ticket demands from season-ticket holders while also satisfying team sponsors. But the Toronto Raptors and parent Maple Leaf Sports and Entertainment created a new All-Star hospitality event that offered season-ticket holders and sponsors entertainment options apart from the league-controlled events.
Reminiscent of GMR Marketing’s NFL House at the Super Bowl, MLSE erected a 30,000-square-foot tent, aptly named True North, near the Rogers Centre in downtown Toronto that hosted parties and entertainment from Friday night through Sunday. A full weekend pass for the ticketed event cost $3,000 (Canadian), and True North was sold out at its 3,000 maximum capacity.
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Gwen Stefani performed on Friday night under a tent set up for entertainment.
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Gwen Stefani and Usher performed Friday night. Flo Rida performed Sunday night after the game, with Snoop Dogg serving as DJ at that Sunday postgame party, as well.
Some tickets were bundled with All-Star hospitality packages, while others were sold as part of sponsorship packages. The venue opened with the NBA’s ownership dinner from 8 to 10 p.m. on Friday and closed in the wee hours of Monday morning following the All-Star Game after-party, which began at midnight.
Dave Hopkinson, MLSE chief commercial officer, said it cost about $2 million to operate the True North space, with MLSE expected to break even on the investment. After having to deal with the endless ticket demands surrounding All-Star weekend, Hopkinson sees the event as another way to entertain — and placate — sponsors and loyal season-ticket holders.
“We see it as the future model,” Hopkinson said. “It is about the party.”
■ POST MOVES: The NBA announced during its Friday Tech Summit that it has surpassed 1 billion followers on social media, with more than 12.7 million following the league on Instagram. That number figures to grow considering Facebook-owned Instagram said that over All-Star weekend, video from the league’s Instagram account (@NBA) racked up more than 60 million views. The most popular video was one of Aaron Gordon’s dunks during the Slam Dunk contest on All-Star Saturday Night, generating more than 1.3 million views on its own.
Instagram’s demographic reach from NBA players’ posts and league highlights is a key area of growth. The company works with teams to help players use Instagram, with executives from the company attending the NBA Rookie Symposium each year to educate and assist players in using the service.
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During the Tech Summit, NBA Commissioner Adam Silver had a conversation with a hologram of James Naismith.
Photo by: JOE MURPHY / NBAE
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Expect to see a more aggressive focus from Instagram around the league.
“There will be a lot of improvements on the video side,” said Brandon Gayle, head of global sports partnerships at Instagram, stressing longer video and a more immersive video experience surrounding the league’s big events, like All-Star Saturday Night.
■ STAR SIGHTINGS: James Naismith died in 1939, but the man who invented basketball was brought to life at the Tech Summit thanks to a hologram conversation with NBA Commissioner Adam Silver created by Digital Domain, based in Los Angeles. … The NBA’s team marketing and business operations division is looking to replace former vice president Jordan Solomon, who earlier this month was named executive vice president of MSG Sports. Solomon had worked for the NBA since 2014.
