NBA owners must convince fans jersey ads not cash grab

February 7, 2013
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In the current IBJ print edition I penned a front page story about jersey ads coming to the NBA.

In the article I detail how the league’s 30 owners are leaning toward allowing a 2.5-inch by 2.5-inch ad on the upper left or right corner of the jersey. NBA owners want to have the ads in place for the 2014-15 season.

Cumulatively, team owners think they can generate $100 million annually through the sale of jersey ads. Sports marketers think large market teams like Los Angeles and New York can score $15 million a year through the ads, while small market teams like the Indiana Pacers are more likely to get between $1 million and $5 million annually.

League owners are currently working on a revenue sharing plan for the jersey ads. One proposal is that 25 percent of all revenue generated by the jersey ads be pooled and shared among teams.

Officials for one local company, The Finish Line, already said they’d be interested in buying an ad on the Pacers jerseys. The ad would appear on player-worn game jerseys and replicas sold to fans.

Marc Ganis, a Chicago-based sports business consultant who counts several NBA teams as clients, thinks the demand for such ads would be high.

“Companies will line up for these ads,” Ganis said.

While numerous types of companies from cell phone dealers to banks would be interested in the ads, some categories, such as hard liquor and possibly beer could be off limits.

NBA fans’ tolerance for such ads is a great unknown.

Pacers President Jim Morris said there’s been little fan pushback about ads on WNBA jerseys and he expects a similar reception to ads on NBA jerseys.

When I asked my twitter followers what they thought about NBA jersey ads, I was surprised at the negative response. It certainly wasn’t unanimously negative, but more than half were against the idea.

Then I recalled something Larry DeGaris, the University of Indianapolis’ director of academic sports marketing programs, told me for the article. He essentially said that before NBA owners start selling jersey ads, they need to sell NBA fans on the idea. And they need to do that by explaining how the money would be used to benefit fans.

“The [Dallas] Mavericks can’t sell a jersey sponsorship just for [team owner Mark] Cuban to put $15 million in his pocket,” DeGaris said. “If that’s what fans are thinking, the sponsorship is a disaster. NASCAR tells fans at every turn, the sponsors on the cars are what makes this sport possible. That’s the message the NBA and its teams need to send to its fans.”

Some NBA executives have said the new revenue could be used to keep ticket prices in check. That might be a tough sell.

“If anyone thinks this will keep ticket prices from rising, they are very naive about economics,” said a commenter to my article. “The only thing that will keep ticket prices from rising is less people buying tickets.”

Since the NBA has a much higher profile than the WNBA and since the NBA would be the first of the big four U.S. stick-and-ball leagues (NBA, NFL, MLB and NHL) to break from tradition of having uniforms clean of corporate clutter, I’m quite certain there’s going to be some kind of reaction.

Just how violent that reaction is will depend on how effectively NBA owners can get out in front of this issue and how much the sport's fans think they’re getting out of the deal.

  • I don't mind.......
    I don't mind the NBA wanting to put ads on the jerseys, thought I would never consider buying a replica jersey that has an ad on it. I will stick to the old jerseys on eBay if that day comes.
    • Excellent Point
      It might bring in revenue, but what about merchandise sales? I for one would not buy a jersey or anything else with an ad on the front. Tacky! Their greed will come back to bite them in the form of reduced merchandise sales.
    • I don't care either
      If the Pacers can retain their core players and contend, they might stay on the high side of that 1-5 million prediction for a while. I doubt it would change much of would pay for two decent bench players, or who knows won't stop the CIB etc., from having to subsidize from time to time to keep the team in has been well documented that even in the years the Pacers sold out every game @ Market Square with Reggie and Co, that the Pacers have lost money overall. I am surprised your readership was so negative about it, they must have checked their cynicism at the door the day you reported on is not about anything but the money, it is a cash grab, and if they were Mark Cuban or the Simon's they would do is business. That the team should do some sort of sales job on the fan base to justify it is not a bad idea at all, but whether they do that or not, they are still definitely going to sell the jersey space...the shills on TNT/ESPN have been talking about it on every recent televised game, so you know it is coming. They are just sending you the message, testing the waters early, so that when they actually do it, you have already accepted it.
      • Looks tacky, not a good idea
        Just because they can add a jersey ad doesn't mean they should. Sure, the world won't end if they start putting them in and the sport will go on either way. But the proliferation of advertising on jerseys/arenas/bowl names, etc in sports is already over the top. We don't need ads on NBA jerseys, or NFL jerseys, or MLB jerseys and so on. Have some respect for the jersey and leave it as is.
      • I don't know about that
        Two of the commenters here have mentioned they would not buy a jersey with an ad on said "tacky"...I personally don't disagree with them, but I would be willing to bet that the NBA knows who buys the most may very well be the same dude wearing a hat sideways and the sales tag still hanging off of it...a lot of the NBA's younger steetwise fans are not going to care at all about the ad on the jersey, and a jersey is their "business" suit...they are totally cynical about the fact that it is a cash grab...they think it is hilarious that a bunch of rich dudes that had the money to buy a team are paying billions to own teams, and millions to guys who grew up in the projects because they can throw a ball through a hoop...those people know it is all about the money and they don't care, they would probably want the ad on there, The people who read IBJ thinking it is a bad idea is probably representative of nothing more than a very skewed sample poll...this is not a real statistical sample.
      • NASCAR ads popular in the hood
        Remember a few years back, NASCAR gear was all the rage in the inner city for the very reason that the gear had corporate logos such as M&Ms on them. So to that point, I think Jim might have it right, that the hip-hop and urban crowd that follows the NBA won't mind one bit that the jerseys have ads on them. They in fact might make the jerseys more desirable on the street.
      • Racing is a different animal
        I don't see the racing angle making much sense. Racing is a very expensive sport (cars, engines, testing, etc.) that simply wouldn't exist without sponsorship. The ticket revenue wouldn't cover the cost of business. I think racing fans understand that and accept that for that reason. Now, there is nothing inherently expensive about basketball compared to racing. Sure, the greed of the players and owners is very high to make as much money as possible but they don't need ads on jerseys just to make basketball economically viable. You've got benchwarmers making millions a year in the NBA. That's where your economic issues come from. When will the obsession with even more ads stop? We're already having to watch them all over the court area, popping up during the action during the game, etc. I guarantee I would never spend a cent on a jersey or other team merchandise with an ad for some completely unrelated product on it. Enough is enough at some point. Anyone that really believes this additional revenue would benefit the fans is very naive. It will only increase player salaries and owner revenue. If the NBA does this and the other major team sports don't follow their lead they will look tacky and risk becoming even more of a niche league compared to the NFL.
      • NBA Jersey add
        With all the controversey in the NBA,I can't see this as a money maker. What are the patrons of the jersey getting in return for an ad on their jersey?
        • not a big deal
          To answer Lin; The 2x3 add on the jersey will be seen by the viewer watching on tv when the player is shooting free throws. That's probably the biggest exposure. But they'll put this in, and then we will become immune to it. Think about the other ads we get bombarded with: the rotating signs along the scorers table, the many many adds on every wall of BLF, and forturnatey, I've tuned out seeing Terry Lee's face on the big scoreboard in the fourth quarter. (C'mon Terry I dont want to see your mug 30 times a night - it actually makes me want to NEVER buy a car from you!) So for jersey ads: I bet after it all dies down people will have trouble remembering that they are really there and tune them out.
        • Correction
          $1-5 million would not pay for two decent bench players. Possibly not even one. Nowadays the average NBA salary is about $5 million. This is a cheap cash grab, with emphasis on "cheap."

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