It has been an interesting week in entertainment, media, and sports. On the one hand, we saw Disney secure significant box office records, Netflix break ranks and sign a deal with SAF-AFTRA, and yours truly did a webinar on “Esports: the Differences between Entertainment and Sports dealmaking.” Plus, we learned that a professional baseball player signed a “beard” clause. We now may see baseball take on more logos for their uniforms in an effort to bring in additional dollars. These brand partnerships are likely to be small and classy to begin, but may expand in the future.
On a scale of measuring the visibility of brand partnerships on uniforms, at least in the United States, NASCAR (car racing in general), golf (PGA), and soccer (MLS) lead the way. Basketball (NBA) follows with its second team specific brand partnership beyond the Nike “swoosh”, football (NFL) and hockey (NHL) are next, with baseball (MLB) bringing up the caboose or wagon, if you will. However, Major League Baseball will be adding the Nike “swoosh” soon to their uniforms as part of a ten-year deal.
To put the uniform patch into perspective, consider that the 2.5 inch or smaller area on the uniform brings in $5-20 million in revenue per year for teams. Whether a uniform purist of not, that is significant income being left on table especially in a time where attendance is declining at MLB ballparks. That being said, where people might be attending less games in person, viewership from home, phone, or tablet is likely to increase, and of course having sponsors to help pay for team operating costs is not something to dismiss outright when looking at the bottom line.
Where do the leagues go from here? Soccer in the United States already models Europe when it comes to across the chest marketing. Will Major League Baseball follow the Korean and Japanese baseball leagues? Unlikely for now where in those markets teams are literally named after the corporate sponsors/owners. However, the question is always revenue sources.
Baseball and other sports leagues and teams in America take in significant revenue, at least currently, from television and streaming contracts, merchandise, and venue sponsorships. The professional sports franchise foray into esports teams, international development, and sports betting will only bring in additional revenue. As long as these revenues are supplying the cost, salaries, and profit of the franchises and leagues, the sponsorship avenue via the patch will be held back.
Another approach has been with international development (games being played overseas to potentially jump start an international team or league and at the very least add more exposure and revenue). What happens here is that American leagues and franchises are much more likely to utilize the more visible brand partnership model because the local populace is used to the exposure. This happened recently in the London MLB Series between the New York Yankees and Boston Red Sox. One thing is almost certain, any exploration with increased “patching” will be tested in the minor leagues first, much like time clocks, virtual umpires, and pursuits to speed up the game have been utilized.
We can also expect that there will be moral limits on sponsors. For example, alcohol and betting brands, and anything deemed to not to be kid friendly will be limited. This is a good policy for young eyes, and old ones too. Overall, the best approach may be one that keeps patch work small and classy. There are other places to sponsor, and the uniform will prove to be a testy one.
