Patches in progress for MLB
Expect advertising logos on MLB uniforms within three years. Such was the buzz among the marketing cognoscenti at last week’s MLB All-Star Game in Cleveland. A handful of MLB teams have already reached out to marketing agencies for evaluations and pricing estimates for the proposed new marketing inventory.
There’s already considerable interest across MLB, due in part to the success NBA teams have had in selling ad patches (an average of $7 million per year for each team, according to Navigate Research) to new sponsors in nontraditional categories. However, the MLB Players Association would have to approve a uniform patch as part of the next CBA, which would start in the 2022 season. It took the NBA more than three years to work through the complexities leading up to its ad patches, which debuted during the 2017-18 season.
“We’re examining the patch, but clearly we have things to work through first,” said Noah Garden, MLB executive vice president of business and sales. “I’d say it’s inevitable down the road, but certainly not immediate. This is something that requires a fairly long runway. There are lots of things to take into consideration, but I think we will get there.”
The math is intriguing, as there are 82 games in an NBA regular season compared to MLB’s 162-game schedule. Baseball also has far more static TV shots than the NBA, which should allow more “exposure opportunities.” Still, Kyle Folts, Van Wagner Sports & Entertainment’s vice president of insights, said it would be a fallacy to conclude that MLB ad patches should be worth twice as much as NBA uniform advertising. VWS&E has been assessing the potential market for a year after several MLB teams inquired.
Looking at several different positions for a patch around the same size as the NBA’s 2.5-inch-by-2.5-inch ad space, VWS&E estimated that the ideal exposure would be afforded by affixing an ad patch to the chest of a baseball jersey, rather than the sleeve. Without revealing an exact location, Folts said an optimal position on the front of the uniform could generate as much as 15 minutes of exposure per game. By VWS&E’s estimate, the average MLB team should realize $6 million to $8 million per year from ad patches, with hallowed franchises like the Yankees getting significantly more. Many NBA teams used patches as inducements for other inventory, like naming rights for practice facilities, making for a difficult comparison. Still, “we believe MLB values are going to beat the NBA,” Folts said. “These will be a great revenue source for MLB teams. It seems like three years is a ways out, but these deals took an average of 18 months for NBA teams, so having enough time beforehand is critical.”
Nike’s 10-year on-field rights deal with MLB, which begins next year, includes a contingency for advertising uniform patches, as does the eager Beaverton’s NFL contract. Still, among the complexities to be worked through are the nettlesome issues of revenue splits with both teams and players. There’s also the additional matter of which categories will be permitted to become “part of the fabric” of MLB. For the first iteration of its jersey advertising, the NBA prohibited categories including spirits, gambling, tobacco, media concerns, political ads and competitors of Nike, which also holds NBA uniform rights.
“It’s early, but we’ve already received inquiries from [MLB] teams curious about that marketplace,” said Emilio Collins, chief business officer at Excel, who helped sell NBA patch deals for the Charlotte Hornets and Chicago Bulls. Before going to Excel, Collins was the NBA’s senior vice president of marketing partnerships.
“At the NBA, the first two years were about balancing the aesthetics and economics of the patch,” he said. “The last two years were just about getting the right revenue-sharing formula.”
Some licensees believe there will be considerable resistance from MLB’s richest and most tradition-bound teams, largely on aesthetic grounds. “I’d have to see an ad patch on the uniform of the Yankees, Red Sox or Cubs before I believe any of those teams will allow it,” said a top marketer at one of MLB’s on-field licensees. However, both the Yankees and Red Sox wore Biofreeze patches on jersey sleeves during their recent two-game series in London.
While TV exposure numbers are often used as indicators of value for uniform ads, “what we’ve learned from the NBA patch is that 75% of the value comes from content shared on digital and social — most of the value is not coming from linear TV,” said Michael Neuman, managing partner at Scout Sports & Entertainment, which has already done an ad patch market evaluation for an unnamed MLB team. How the NBA fan base compares to MLB’s in terms of sharing that content will thus be another important factor determining price and value. Compare LeBron James’ 43.1 million Twitter followers to Mike Trout’s 2.6 million as one indicator.
Yet another hurdle to overcome is whether MLB jerseys with ad logos will be the ones available for purchase by fans. That has not been the case in the NBA, where jerseys with ad patches have only been sold through team-controlled retail.
SPONSOR WRAP: While the unusually temperate weather and low humidity helped Cleveland shine as a host, holding the All-Star Game in a city where everything was within walking distance and there was plenty of commercial canvas on which sponsors could paint made for good activation. Play Ball Park, the new indoor/outdoor, paid/free version of the All-Star fan fest, attracted more than 149,000 fans and had 20 sponsors activating against it. Consequently, it’s something MLB will continue.
“This indoor/outdoor model is the one we intend to move forward with,” Garden said. “It’s more emblematic of who we are and the time of year we hold this event.”
T-Mobile stood out, as did its branded zipline towers. It was also the title sponsor of the Home Run Derby and debuted a TV ad within that event, which featured epic performances by Blue Jays rookie Vladimir Guerrero Jr. and eventual winner Pete Alonso of the Mets.
“Baseball has driven brand consideration for us against the general market very well, and when you combine that with the power of big events like this one, it really helps us break through the clutter,” said Mike Belcher, T-Mobile vice president of marketing business development and partnerships, noting that while he did not take a zipline ride, model Kate Upton (wife of Astros pitcher Justin Verlander, who started the game for the winning AL team) was among those who did.
Elsewhere, MLB official hairstylists Supercuts was offering free haircuts and MLB team logo hair painting on Gateway Plaza, located between the ballpark and the Cleveland Cavaliers’ Rocket Mortgage FieldHouse. Supercuts also used the All-Star Game to debut its initial creative work from TBWA\Chiat\Day LA, featuring actor Michael Kelly. Supercuts is now in the second of a three-year MLB sponsorship deal. Melissa Amponsah, director of brand marketing and communication, said brand consideration has increased with the help of MLB rights, but delivering a message balancing price and value, and one that leverages baseball without unintentionally sending potential customers to rival Sport Clips, is challenging.
Inside Progressive Field, MLB national sponsors were afforded a considerable amount of static and digital inventory, along with some branded social media photo-op displays. While that produced some unprecedented moments, like Geico signage atop one for Progressive, we recall many All-Star Games where the only thing conflicting national sponsors received inside the host venue were tickets and suites. Anheuser-Busch InBev even got temporary incremental pouring rights at Progressive Field, a venue where Miller rules. “In a market where we don’t have every relationship, we were very happy,” said Nick Kelly, ABI U.S. sports marketing head.
“We’ve gone from 10 national partners to 50 paying rights fees of some kind, and we send parts of that business out to our clubs,” Garden explained. “There’s more collaboration now with us and teams on sponsorship matters.”
HOUSE PARTY: Instead of the standard grandiose late-night soiree, the MLBPA Players House offered the union’s members and business partners three days of food, drink, entertainment and meeting spaces, and its location at the end of trendy Euclid Avenue made it a popular stop for industry types. Evan Kaplan, MLBPA executive vice president of licensing and sponsorship, admitted to borrowing the idea from the NFL House that league stages annually at the Super Bowl.
“Seemed like a better way to entertain and do business,” said Kaplan, adding that the Players House concept will be repeated at next year’s All-Star Game, which will be held at Dodger Stadium in Los Angeles.
REALLY A FOOTBALL TOWN?: The rebuilt Cleveland Browns now have better odds (16-1) than all but nine teams to win next year’s Super Bowl and the city will host the 2021 NFL draft, so it seemed appropriate that there was a quartet of NFL league staffers in Cleveland last week to check out the city’s event capabilities, even during what amounted to a baseball festival. Eric Finkelstein, senior director, events; Aubrey Walton, director, event strategy; Katie Keenan, director, event operations; and Nicki Ewell, director, fan experiences, were on the NFL’s advance scouting team in Cleveland.