While there was much wailing and gnashing of teeth when it began, the reaction of NBA fans to the small ad patch on the shoulder of uniforms has been mostly a shrug. It didn’t change anything.
Teams and advertisers have loved it, however. Which means it’s here to stay. Not yet officially, but just wait.
Terry Lefton and John Lombardo at the Sports Business Journal have the details.
As the league continues to search for new revenue, the patch program has delivered, generating more than $150 million. And 20 of the 29 team patch sponsors, including Harley-Davidson and Rakuten, are doing business with NBA teams for the first time…
Team, league and brand executives all feel the program has been an overwhelming success, with exposure numbers easily exceeding projections. Clubs expect new deals and renewals will be for more money and longer terms. One top team executive predicts a 20 percent to 30 percent price increase for Patch 2.0.
The NBA has not made public how much companies are paying per year for the jersey patches, but the rumored low end is north of $3 million annually and SBJ says the high end could be up around $20 million. The patches have value to advertisers because it’s estimated they get their logo exposed on broadcasts for 10-15 minutes every game. Picture LeBron James or James Harden stepping up to the line to take a free throw, the close up on them shows the WISH logo on the Laker jersey or the ROCKiT logo on the Rockets’ jersey. That is advertising gold.
What the league is not going to do is expand the size of the ad patch, the NBA isn’t interested in a NASCAR or Premiere League look. What they do want is to maximize the money they can get from the existing system. That means getting the logos on replica jersey sales (Nike, less thrilled about that, although their swoosh is on every jersey on the opposite corner).
All but one NBA team (Oklahoma City) has an ad patch on their jersey now.