Update: To clarify, the parity concern is most likely one of many hurdles to getting advertising on NBA jerseys. Just because that’s the only issue Adam Silver spoke about here doesn’t make it the primary issue.
In fact, the other hurdles could be more substantial. Who buys the advertising and for how much? Is it sold league-wide or team-by-team? How does the NBA ensure jersey ads generate new revenue as opposed to just diverting existing advertising dollars already spent on theleague? How does the uniform maker play into this? How does the shift from Adidas to Nike next year affect decisions? How do TV contracts factor (though there’s reportedly at least some resolution nationally)?
I’m still intrigued by parity and revenue-sharing elements, but it’s important to keep this discussion in the proper scope. If parity is only one hurdle of many, concerns about parity are just part of a bigger picture.
So, keep that in mind when reading below. I’ve added a couple notes of clarification.
NBA commissioner Adam Silver has been calling advertising on jerseys inevitable since at least 2014, and the league’s popularity continues to rise.
So, why hasn’t any team put an ad on its uniform?
Silver, via The Lowe Post podcast:
Part of the reason we haven’t moved forward is complications over our revenue-sharing system, that if certain markets did exponentially better than other markets, then it gets complicated.
But the way our revenue-sharing system works, it would be a net reduction in revenue for other clubs. And your listeners could say: “Why does that matter?” And the issue is, end of the day, most importantly, we’re trying to create parity in this league. And we don’t want a system where some teams can afford much higher payrolls than other teams.
And that’s the biggest concern, that there are a group of teams that feel they will somehow be left behind, that certain markets – and presumably some of the larger markets – will be much more successful in selling – we’re calling it a patch, a logo on a jersey, not the full-out control of the jerseys that you see in European soccer. But they’d be more successful in selling a patch. They would generate more revenue.
Those lower-revenue-generating teams would not get a substantial enough increase in revenue sharing, and therefore, they would not be able to spend as much on players, on practice facilities, on all the other enhancements necessary to compete for championship teams.
And that’s going to be my biggest concern as we continue to address it, ensuring that it doesn’t have any effect whatsoever on teams’ ability to compete.
Why sell local TV contracts? Big markets can generate more revenue there than small markets.
Why sell merchandise? Big markets can generate more revenue there than small markets.
Why sell tickets? Big markets can generate more revenue there than small markets.
Jersey ads seem like a relatively arbitrary place to draw the line.
Large markets have advantages. That’s just how it is. The league must find a suitable revenue-sharing formula, but large markets will have always have some advantage. It’s just a matter of how much, and it seems small markets are hijacking the process to stake a bigger claim. Any dollar a big-market team generates through jersey-ad sales that is shared with a a small-market team is a money that small-market team wouldn’t otherwise receive.
The players union should take exception to the league (clarification: by the league, I mean an NBA driven by a bloc of small of small-market teams) voluntarily rejecting available revenue – about half of which would go to the players. It’s not their problem that the owners can’t agree how to share their slice of the pie.
This could also explain why the league could get ads on All-Star jerseys but not regular-season jerseys. That doesn’t directly affect any group of teams over others.
Knowing (this is one of the reasons) why team jerseys don’t have ads makes me only more convinced Silver is correct about their inevitability. I expect this to get sorted out for the next Collective Bargaining Agreement.
Refusing to accept money just because someone else might get more is not a sustainable stance – especially when your business partners, the players, want that revenue coming in.