NBA Takes Step Towards New Advertising Opportunities

 Joseph Thiry

Sports and advertising have become integrated to a point that consumers and viewers are accustomed to. An extremely beneficial symbiotic relationship has been developed between sports and advertising due to the revenue sports accrues from ad spots and the ability a corporation has to increase brand image, brand identity and gain reach towards their target demographic. Advertising consumes almost the entirety of every sport. From the “official car of the NBA” to the “official soft drink of the NFL” the scope of advertisement on professional sports is almost unfathomable.

During the 2016 NBA All-star weekend the NBA experimented with uniform advertisement for the first time. Along with the standard Adidas manufacturer logo, a logo for the official car of the NBA, KIA also appeared on jersey near the left shoulder. This concept is not necessarily new and has been implemented internationally and also through a few U.S professional sports such as soccer and NASCAR, but avoided by professional sports such as the NFL, MBL and NBA for a long time. However, it seems that the NBA is going to venture into that realm of advertising this upcoming 2017-2018 season. NBA Commissioner Adam Silver has publicly discussed the profitability and benefits of implementing ads on jerseys can bring. “It creates an additional investment in those companies in the league,” Silver said. “There’s no sponsor that’s only decision is going to be to manifest its brand just on that small patch on the uniform. Once they put their name on the jerseys that they’ll then use their media to promote the NBA extensively” (CNN). This provides an excellent economic opportunity for both the NBA and corporations that could benefit from being affiliated with the NBA. The teams are receiving 50% of the net income due to sponsorship money from jersey ads and the other 50% will go to the league’s revenue-sharing pool. This provides a huge financial opportunity to everyone involved in the corporate advertising on NBA jerseys. Well, almost everyone.

Since each individual NBA team is responsible for their sponsors, it provides unique advantages to every team due to the marketability of their players (AdWeek). Take a player like James Harden for example, a player who is notorious for his beard. If a company such as Dollar Beard Club decides to purchase an ad slot on the Houston Rocket’s jersey and outbids another individual for the ad slot due to James Harden and his beard, the Houston Rockets would profit from James Harden’s likelihood and marketability. Different players will uniquely contribute to the companies that are attracted and interested in partnerships with certain organizations. So in essence, a player can that can sell an ad spot due to their personality can actually make their franchise profit without said player playing a single minute. So that raises the question, will these players receive additional pay or receive any compensation for their likelihood? Or will the player’s value go up due to their marketability? Previously, a player’s worth or amount they receive through a contract surrounded primarily around skill level and the ability to perform in the game. This new ad stream will do one of two things. Either the NBA player’s worth with raise correspondingly to their popularity and skill levels or the player should receive some sort of compensation for the high levels of advertising dollars they attract. It will be extremely interesting to see the reactions of players along with how player’s worth is fluctuated when jersey ads are active.

All the revenue generated by these advertisement slots seems extremely appealing and is the best interest for both the NBA and corporate entities that wish to purchase publications. However, how will these effect public perceptions for beloved NBA teams impact existing memorabilia and jersey sales? Franchises that will endorse and represent particular corporations can either draw attention or become an eyesore on an individual’s favorite team depending on the corporation. It has been stated that the individual franchise will possess the power to sell their branded jerseys along with the standard jerseys. However, these advertisement jerseys will only be available through the franchise store, retail distribution will remain ineligible to sell advertisement jerseys (CNN). This can drastically alter the jersey market by emphasizing and pushing consumers to purchase jerseys directly from the franchise store instead of retail stores. Certain brands have such a strong brand image and following, it can ultimately alter the way franchise swag is distributed and sold as we know it. Exclusive jersey sales that aren’t available in retailers can catalyze cannibalism within retail and continue to shift the entire venue of market from in store to online cutting out distributors. This will also increase profitability for each individual franchise adding to the reasons for advertising jersey integration.

The continuation and implementation of selling these advertisement slots on jerseys and making these jerseys readily available purchase, poses an opportunity for exponential amounts of change within the economic structure of the NBA. It will be extremely interesting to see how popular these jerseys will be. Since the official manufacturer contract for the NBA will change from Adidas to Nike, it will be interesting to see the artistic style Nike will use to make these advertisements sexy and aesthetically appealing. The upcoming 2017-2018 season will be a test run and example that will be examined extremely close by the other national sport leagues that do not capitalize on the empty space available on their player’s jerseys. I argue that this is not the last time you will see jersey advertising integration and this will be the footprint and catalyst that other professional leagues will begin applying. However, the NBA is in the early stages of implementation and will have plenty of details to iron out. As time continues I would not be surprised if the distribution of wealth amongst the league, franchise and team players will vary several times due to the variance of revenue certain players can provide due to their marketability exploits different corporations can utilize. As an advertising major, it is exciting to see the new avenues and streams becoming readily available In the field of advertising. However, although this idea is not a new concept it is new to the NBA and needs to be assessed and fine tuned delicately, taking all the corporate, league, franchise and NBA players into consideration.

 

 

 

Resources:

 

Season, During The 2017-2018. “NBA Becomes First Major US Sports League to Allow Ads on Jerseys.” CNNMoney. Cable News Network, 15 Apr. 2016. Web. 18 Apr. 2016.

 

Birkner, Christine. “Brands Can Sponsor NBA Jerseys Starting Next Season.” AdWeek. 15 Apr. 2016. Web. 18 Apr. 2016.

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