The Indiana Pacers have brokered a deal with an unusual sponsor—the Indiana Economic Development Corp.—to become the first of 30 National Basketball Association teams to sell courtside ads emblazoned on the hardwood.
With the exception of companies like Banker’s Life, which have bought venue naming rights, IEDC will be the first corporate entity with a presence on an NBA court. But instead of advertising its own name, IEDC will market its efforts to draw business to the state with the slogan, “A State that Works.”
For that right, sources close to the league said, IEDC—which previously had no in-venue signage deals with the Pacers—will pay a low-seven-figure sum over two years. The floor signage, along with other fieldhouse advertising IEDC bought, will debut at the Oct. 16 preseason game against the Dallas Mavericks.
In June, NBA owners voted to allow corporate sponsors’ names to be placed on what is being called the “apron,” the area just out of bounds in front of the home and visitors benches. Before this year, teams were allowed to put only their own website or Twitter handle there.
The NBA is allowing only one floor sponsorship, with the company’s name placed in two locations—one in front of the home bench and one in front of the visiting bench.
The area is seen as lucrative because it is highly visible not just by fans at the game but also by television viewers. With all NBA teams having a regional television broadcasting deal, IEDC will have its ad piped into markets coast-to-coast throughout the NBA season. The ad spot is also likely to be photographed during games by a bevy of local, regional and national publications.
“That’s a piece of real estate a lot of companies would like to get a piece of,” said David Morton, president of Sunrise Sports Group, an Indianapolis-based sports marketing firm. “It would cost a whole lot of money to get your message out into that many markets.”
The NBA reserves the right to remove the ad during nationally broadcast games on TNT and ESPN.
The Pacers wasted little time pitching the space, beginning talks last summer with a number of potential sponsors, including the state’s economic development engine, IEDC.
Talks with IEDC, led by Pacers sales executive Brad Carlson, heated up in August and led to the signing of a two-year deal in late September.
“During brainstorming, when we were talking about who this [floor ad] would make sense for, [Carlson] brought up IEDC,” said Todd Taylor, Pacers senior vice president and chief sales and marketing officer. “It’s not the type of deal most [NBA] teams are proposing. It was forward-thinking.”
The benefit goes beyond the immediate monetary bounce, something Carlson, who formerly worked for the Indiana Sports Corp. and 2012 Super Bowl Host Committee, immediately grasped, Taylor said.
“If this campaign increases the state’s brand and helps draw more business here, that gives us more potential clients to sell sponsorships, suites and club seats to,” Taylor said.
Bending the rules
As part of the deal, the Pacers brokered an agreement with league officials for IEDC to put a slogan on the floor, something team owners have forbidden with most commercial sponsors.
For instance, a company like AT&T couldn’t use its slogan, “Your world. Delivered.”
“The IEDC and this deal are tied to the community,” Taylor said. “So the NBA agreed to modify its regulations for us.”
Taylor thinks IEDC’s slogan plays well with the Pacers’ “Indiana’s Game, Indiana’s Team” slogan.
“This deal reinforces our brand and their brand,” Taylor said.
The Pacers packaged the deal with advertising time on the digital sideboard between the two benches, the digital ribbon board that encircles the middle level of the fieldhouse, goal post pads, and logos on the backdrop for Pacers players’ and coaches’ interviews at the fieldhouse.
“When you put all that together, that’s what really makes it work,” Taylor said. “It’s a comprehensive retail and branding message.”
On the video boards, IEDC will have various messages, including a logo of a gear cog turning and the slogans “Thank you, Indiana, for being not only a work force, but a force that works” and “Indiana—A state of thinkers, innovators and makers.” The digital signage also will broadcast the website AStateThatWorks.com. The ads on the sideboard and ribbon board will be synchronized to run at the same time.
This deal is as unusual for IEDC as it is for the Pacers and NBA.
“While the IEDC has occasionally advertised with sports teams, this is the first time the IEDC has partnered with a team in this capacity with the goal of increasing exposure and brand lift for the state,” said IEDC spokeswoman Katelyn Hancock.
Pacers and IEDC officials declined to divulge the financial details of the agreement, but one league executive not associated with the Pacers said he expects such deals to fetch from $500,000 to more than $2 million annually, depending on the quality of the team involved and the size of the market it plays in.
While the Pacers play in one of the smallest NBA markets, the team is one of the best in the league, last season losing in the Eastern Conference Finals in seven games to the Miami Heat, the eventual NBA champions.
“Since this is a mutually beneficial partnership, the Pacers offered a custom, comprehensive package to the IEDC well below market value,” Hancock said.
Still, league marketing sources said the deal was not cheap. This summer, there was much debate over allowing teams to sell ad patches on their game jerseys as well as the floor ads. In the end, the floor ads were allowed and the jersey ads were scrapped—for now.
At one point, NBA Deputy Commissioner Adam Silver said he believed giving teams the rights to sell a company’s patch on jerseys would generate $100 million annually across all teams.
Chris Granger, Sacramento Kings president and former NBA executive vice president of team marketing and business operations, said he expects the apron advertising to be worth more than the jerseys because the television exposure will be so much higher for the floor space.
The timing for the Pacers—and for IEDC—is perfect. Just as the Pacers were selling the space, the team was expecting a significant increase in its TV ratings.
“Last year finished on a very high note and we expect that to carry over to this year,” said Jack Donovan, general manager of Fox Sports Indiana, the cable TV channel that will carry Pacers home and away games. “We expect ratings to be 10 [percent] to 20 percent higher this November than they were last November. … And we expect them to build from there.”
The 78 Pacers games broadcast last season on Fox Sports Indiana scored an average 2.1 rating, according to New York-based Nielsen Media Research. That equates to about 22,600 households.
Ad sales for Pacers broadcasts are a double-digit percentage increase over this time last year, Donovan said, adding that Fox Sports “has added many new advertisers” for Pacers telecasts.
“I think the Pacers’ [TV] ratings are not only going to be up in their home market, but also in other markets, too,” Donovan said. “This team has a roster of players that has really connected with the Indiana market and made an impression with the overall NBA fan base. They’ve got some guys who are emerging superstars.”
Overall this season, the Pacers have added nine sponsors, Taylor said, with sponsorship revenue up 10 percent over this time last year. Ticket sales are up 30 percent over last year, he added.•