NBA tables jersey ad talk
The momentum for a new revenue stream seemed to be there, but NBA owners put off talk of putting corporate logos on jerseys while at Thursday's board of governors meeting in New York.
Instead, they discussed David Stern's retirement and the plan for his successor, current deputy commissioner Adam Silver.
The idea was to have a company pay to have its logo on a 2½-inch-by 2½-inch patch on the jersey front. But sources say the parties found that selling space on jerseys is quite complicated, and they needed more time to study it before the NBA becomes the first major sports league in the U.S. to sell an ad on its jerseys.
Complications could include issues of exclusivity and conflicts with player endorsements. Do NBA teams have to eliminate competitors of official sponsors in every category? What happens if a team sells a sponsorship to a company that competes with a company that the star player is endorsing?
The New York Giants wear ads on their practice jerseys. The only major conflict is with New York Giants quarterback Eli Manning, who is sponsored by Citizen Watch and wears the Giants practice jersey with a patch of competitor Timex. Due to the relatively small exposure of a practice jersey, Manning didn't make a big deal about it. It would get more complicated if Gatorade, for example, bought the Miami Heat patch and LeBron James, a Powerade endorser, was forced to wear it. James frequently covers up the logo on the Gatorade bottle or rips off the labels so as not to compromise his lucrative relationship.
It might have been insulting if owners unanimously approved putting ads on jerseys on the day Stern's retirement was announced because Stern has been opposed to the idea. In fact, he hasn't let official apparel maker Adidas put its logo on game jerseys.
The NBA has been weighing the idea of putting ads on its jerseys since 2009, which was the same year the WNBA approved the concept long practiced in soccer and NASCAR. The Phoenix Mercury sold their spot first to identity-theft-protection company LifeLock.
Last year, Silver said he anticipated the opportunity was worth $100 million per year conservativelyfor the league's teams.
But sponsorship-evaluation company Joyce Julius & Associates pinned the actual value of the advertising at $157.5 million collectively per season.
"The patch is relatively small," said Eric Wright, president of Joyce Julius & Associates. "That means that a lot of the value a company gets might depend on how clear its logo is -- whether it's cluttered with cursive writing or simple like Target or Gatorade."
Wright's company estimates that the ads on the jerseys collectively would be seen in clear view for nearly 500 hours in a season.
"You wouldn't see it when guys are dribbling down the court," Wright said. "You would see it when there are close-up situations like free throws, timeouts and interviews."
In its initial discussions, the league had talked about putting the logos on the jerseys sold at retail as well.