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What do you buy for the kid who already has everything? Or, in the case of the National Football League (NFL), how do you make more money when most of your major business deals are tied up for the foreseeable future?
One answer to that question is sponsorship. The NFL’s revenue in that area has grown consistently over the past decade, reaching US$1.88 billion across the league and its 32 teams during the 2022 season, according to IEG.
Although NFL sponsorship revenue has been increasing on an annual basis, last season saw the rate of growth slow to four per cent compared to 12 per cent a year earlier. That won’t be seen as a massive issue, but the league will likely be looking at areas of growth.
Since 2017, the National Basketball Association (NBA), National Hockey League (NHL), and Major League Baseball (MLB) have all grown their sponsorship revenue pie by allowing teams to sell an advertising space on their jerseys to brands. The NFL has so far resisted the temptation and there has been little to suggest that it will be launching a jersey patch programme anytime soon.
However, the subject has been back in the news this week, which makes it worth considering what an NFL jersey patch programme might look like.
What’s the opportunity?
On 6th September, sponsorship valuation platform Turnstile released a study estimating that an NFL jersey patch programme could be worth a combined US$673 million annually, averaging out at more than US$21 million per team.
That would obviously be conditional on each franchise finding a partner and the value would vary between teams based on things like home market size, total audience and brand strength.
The total was broken down into US$458 million (US$14 million per team) in exposure, US$181 million (US$6 million per team) in intellectual property rights, and US$34 million (US$1 million per team) in benefits, such as ticketing, hospitality and activations.
What are the pros?
The most obvious advantage is the new money it would generate for NFL teams.
For context, the NBA’s jersey patch programme was projected to reach around US$225 million for the 2021/22 season and a number of teams in the league have been able to secure uplifts when renewing their original deals or negotiating new ones.
The market is less developed in the NHL and MLB, but the ice hockey league is reportedly generating around US$100 million collectively from jersey patch deals.
In baseball, which only allowed uniform sponsors from this season, some of the biggest deals so far have included the Boston Red Sox signing a ten-year, US$170 million partnership with MassMutual and the New York Yankees’ arrangement with Starr Insurance, which is reportedly paying US$25 million annually.
Those numbers are small change in comparison to Turnstile’s estimate, which reflects the dominance of the NFL in the US sports market. So it seems like a no-brainer, right?
What are the challenges?
The introduction of jersey sponsors would undoubtedly bring in more money, but at what cost?
Unlike in Europe, where brands have featured on kits for so long that they now look weirder without them, US sports apparel has long been free of company logos – with the exception of the manufacturer supplying the uniform.
The absence of advertising is even more apparent in the NFL, which has long sought to keep both the playing field and surrounding hoardings free of company logos.
So is the NFL, which is reported to be bringing in US$20 billion annually and already generates more sponsorship revenue than the other US major leagues without jersey sponsors, really in a position where it needs to abandon that tradition?
Plus, there’s no guarantee that sponsors would be easy to secure at a time when teams across three other leagues are in the market with similar propositions. NBA franchises saw strong uptake when the league introduced its jersey patch option in 2017 but there remain a large chunk of MLB and NHL clubs without a partner.
With that being said, the NFL isn’t the NHL or MLB. The American football league guarantees huge reach and exposure for brands and advertisers continue to flock to the competition.
The NFL does already allow its teams to advertise sponsors on their practice jerseys
How likely is it to happen?
Speaking to Sports Business Journal (SBJ) in May, one ‘longtime NFL team president’ suggested the league wouldn’t allow jersey patches until the departure of commissioner Roger Goodell, who is now expected to stay until at least 2027.
Things can change, of course, but the NFL has the luxury of being able to sit back and watch how jersey patch programmes unfold in other leagues before deciding whether it would be appropriate for it to enter the market. In the meantime, it will focus on growing other areas of its business, such as its international sponsorship initiative or its increased focus on gambling.
The fact there is now a figure in the ether means jersey patches might at least be discussed again this season. But one thing is for sure: the NFL won’t be in any rush.
Who’s winning the battle of the brands at the Rugby World Cup?
There’s a lot happening this week, what with the start of the NFL season and the climax of the US Open. But it’s also the beginning of the 2023 Rugby World Cup.
If I asked you (or indeed if you’d asked me a few days ago) which apparel manufacturer will have the biggest presence at the tournament, the likes of Canterbury and Adidas would probably be the first to come to mind.
As it turns out, Italian manufacturer Macron has established something of a stranglehold over international rugby and is supplying the kits for seven of the 20 teams competing at the tournament, including Wales, Scotland and Samoa. It even has a deal with World Rugby to provide the match official uniforms.
For more sharpish insights like this one, check out SportsPro’s commercial guide to the tournament.
Top dealer
This week saw Prime, the energy drink co-founded by influencers KSI and Logan Paul, name Aston Villa star Alisha Lehmann as its first female brand ambassador.
Barbie Girls Drinks Prime🎀💄 https://t.co/yuVGLsiD1h
— Alisha Lehmann (@lehmann_alisha) September 5, 2023
The Swiss international has around 15 million followers on Instagram alone and is quickly becoming one of the most marketable players in women’s soccer.
According to SponsorUnited, the 24-year-old already had 11 endorsement deals going into the recent Women’s World Cup and her engagement on social media appears to be making her a strong bet for brands.
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