Training kit deals bring new revenue to MLS clubs
Major League Soccer clubs are beginning to make inroads into selling separate sponsorships for their training kit, a category league executives say is becoming one of their most valued properties.
Five of MLS’s 23 clubs have separate jersey and training gear sponsors. Jersey sponsorship has the brand name on the front of the game jersey, while a training kit sponsorship appears on the warmup jersey and non-game-day training apparel.
MLS began allowing clubs to have jersey sponsors in 2007 and, traditionally, the assets have been bundled. However, in 2014, the league began to allow teams to separate the two deals, and the result has teams bringing in an extra high six-figure to low seven-figure of revenue annually for the new inventory.
The Portland Timbers were the first MLS club to sign a training kit sponsor, linking with local bank Simple in December, 2014. Last week, the Timbers signed a multiyear deal with a new partner — Portland-based contact lens subscription service Sightbox. This came after the team signed a multiyear extension with jersey sponsor Alaska Airlines, which has been with the team since it entered the league in 2011 and allowed the Timbers to carve out the training kit rights from its deal.
Mike Golub, Timbers president of business, said the flexibility to unbundle the assets has been a boon for the club.
“Each team has their own situation. If a club is able to bundle everything together and maximize it that way and feels that’s the best approach — great,” he said. “For us, this gives us a way to maximize the value of the assets, but also extend our family of partners and increase activation.”
Golub declined to comment on the financial terms of the training kit deal but said that when the two deals are combined, they rank in the top tier of revenue deals across the league when compared to other teams — a big piece of inventory for a club in a market like Portland. “It is material, and while I don’t think anyone will make the case they’re worth as much as the [game] kit sponsorship, there is a high level of value with the amount of exposure you’re able to get in practice every day.”
The New York Red Bulls, who became the second team in MLS to sign a training kit sponsor in 2015, just renewed the club’s deal with Japanese heavy equipment manufacturer Yanmar. The new multiyear deal, which provides Yanmar with branding on both sleeves of the club’s training and warmup gear, is the Red Bulls’ largest partnership. Industry sources pegged the previous deal at more than seven figures annually, and Red Bulls general manager Marc De Grandpre said the new deal is an increase over the previous one, but declined to comment further.
For the Red Bulls, who do not have a stadium naming-rights partner and have parent company Red Bull on the front of the club’s jerseys, the deal is even more important. De Grandpre noted that “between coverage of training, the pregame and interviews that are done for national television, it might be our number one earned media driver — it’s a tremendous asset for the club to leverage.”
Last season, the Houston Dynamo carved out its training kit sponsorship from its deal with natural resource company BHP Billiton, and signed a multiyear deal with gasoline company 76. While the club’s deal with BHP Billiton has lapsed, leaving it without a jersey sponsor, Chief Revenue Officer Steven Powell said it aims to keep the deals separate going forward.
“The training kit sponsorship is a high-profile asset that has a really impactful brand integration and brand association,” Powell said, adding that 76 is also the season presenting sponsor and has entitlement of one of the stadium’s gates. “With the right partner who builds a platform around the assets, I don’t think it dilutes the value of a jersey or naming-rights partner.”
De Grandpre believes that in the next few years the bulk of MLS clubs will have a partner in the training kit category.
“There’s tremendous value for all the clubs here, both in terms of activation and significant dollars where the sum of the parts can be greater if the club manages it properly,” he said.