Report: NBA’s media rights deal includes revenue from ads on jerseys

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It wasn’t hard to see this coming. NBA commissioner Adam Silver even called it “inevitable” in April that ads would eventually appear on jerseys. Now, it looks like it’s closer to becoming a reality. According to a report in the Sports Business Journal, the league’s freshly-signed media-rights agreement with ESPN and Turner includes a provision that gets the networks some advertising money when the league does decide to sell jersey sponsorships:

Early parameters indicate a distinction between whether a national brand or a local/regional brand buys a team’s jersey sponsorship. A national brand with a popular team would mean more money for the networks than a local/regional brand with a team that’s not on national TV very often.

According to sources involved in the discussions, if there’s a national brand with a jersey deal that would have bought time on ESPN or TNT’s NBA game telecasts — think Coca-Cola or Samsung — the two networks would get specific commitments from that company to also buy TV advertising during any nationally televised games featuring that sponsored team.

Sources familiar with the TV deals admit both networks pushed hard to be allowed to sell ads on team jerseys outright, but the league balked at handing over the potentially lucrative rights. Under the new TV deals, NBA teams maintain the rights to sell the jersey advertising, which has an estimated value ranging from around $800,000 for small-market teams like the Memphis Grizzlies to more than $10 million for large-market teams like the Los Angeles Lakers.

ESPN and Turner were smart to push to be included in potential future jersey sponsorships — there’s a boatload of money to be made there, whenever they decide to tap into it.

It’s unclear when the league will make the move, only that it seems like a matter of “when,” not “if.” It’s also not clear what the ads will look like, whether it will be a small patch in the front corner where the NBA’s logo used to be (the league recently moved their logo patch to the back of their jerseys) or something more similar to soccer jerseys, which often feature huge sponsor logos plastered across the front where the team’s name would be.

This is sure to be the source of some controversy among fans whenever the league decides to sell ad space, but it doesn’t offend me, and I suspect most fans will get used to it. Soccer is the most popular sport in the world and most soccer jerseys have ads all over them. It doesn’t stop people from buying them or wearing them.

The NBA just inked a $24 billion TV agreement, so clearly they believe (rightly) that the league is growing. They’re not going to pass up a source of revenue that’s available to them, and selling jersey sponsorships is potentially extremely lucrative.