Two down and 28 more to go. On Monday, the Philadelphia 76ers revealed ticket company StubHub as their corporate logo sponsor, making it the first team in the four major U.S. sports to sell an ad on a jersey.
Starting in the 2017-2018 season, the NBA will experiment with a 3-year pilot program that includes selling jersey ad space to corporations. The controversial decision to feature sponsor logos on jerseys was announced by Commissioner Adam Silver at the annual NBA Board of Governor’s meeting on April 15th, 2016. With fans having more control over their exposure to commercials and ads today, Silver made a case for corporations adapting to the rapidly changing media landscape.
“The media landscape is changing,” Silver said. “People are watching less live television outside of sports. People are watching fewer commercials. This will become an important opportunity for companies for connecting directly with their consumers.”
The 3-year pilot program will allow the NBA and its future corporate sponsors to test the waters and gauge its success and receptivity. Fans have already voiced their opinions, especially on Twitter and the response hasn’t been so positive. But, after a few weeks into the 2017-2018 season, it’s unlikely that fans will still be opposed to seeing the ad logos on players’ jerseys. Not everyone is upset over the decision though. Upon announcing their partnership with StubHub, 76ers CEO Scott O’Neil was eager to voice his excitement over the future of the NBA’s relationship with corporate sponsorship.
“We are about being first, being different, being innovative and getting to the market as quickly as we can,” O’Neil said. “We’re thrilled that the NBA has decided to be an innovator among the major sports leagues in this country, we’re happy that we will be the beneficiaries, and we know that being first here will drive value for our partner.”
So how will the ad revenue be distributed? The 76ers and StubHub agreed on a reported $5 million per year, with the option to extend their contract after the 3-year pilot program. With an additional $15 million being made from just one team, the NBA has a lot of revenue to look forward to.
Half of the money generated from the ads will go directly to the teams. That half will then be divided in two, with one portion going to the respective team and the other portion going to a revenue-sharing pool, which will contribute to the ever-growing salary cap.
On October 10th, the Sacramento Kings announced Blue Diamond Almonds as their corporate sponsor, making it only the second team to reach an ad deal since the plan was announced in April.
Which professional league do you think will be next to sell ad logos to corporate sponsors? Comment down below with your thoughts.
