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NBA set to cash in with sponsorship patches on jerseys

LAS VEGAS -- NBA jerseys almost certainly will feature small sponsorship patches on the shoulder area in two years, a move that league officials estimate could generate $100 million in revenues per season.

So it really won't be the name on the back, as the saying goes, but the name on the front that will matter.

The NBA Board of Governors discussed the matter Thursday in its annual summer meeting, and deputy commissioner Adam Silver said there was virtually unanimous support for adopting some form of jersey ads. The matter was referred to the owners' planning committee, chaired by Celtics owner Wyc Grousbeck, and guidelines are expected to be approved in September -- paving the way for the money-making ads on jerseys in time for the 2013-14 season.

"I think it's fair to say that our teams were excited about the opportunity and think there is potentially a big opportunity in the marketplace to put a two by two patch on the shoulder of our jerseys," Silver said.

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Silver later corrected himself, saying the patches would be 2.5 inches-by-2.5 inches. They would feature the names of companies -- think McDonald's, Coca-Cola, Kia, Apple -- and would put the NBA in lock step with international sports leagues whose player uniforms routinely are adorned with ads. WNBA teams already have sponsorship logos on their jerseys, but the NBA would be the first of the four major American pro sports leagues to take the plunge.

"My sense is that every team is in favor of doing this in some form," Silver said.

And every team in every sport will do it, too. Tru$t me.

The sponsorship patches would be placed on the left shoulder of the jersey, where the NBA logo currently is located. They would appear on retail jerseys, as well, Silver said -- a concept that could cause backlash among some fans who don't want corporate logos on the jerseys they buy in the sporting goods store or online. But Silver said league officials consulted with jersey manufacturer Adidas, and early indications are that sponsorship patches would not harm retail jersey sales.

"We've been studying this fairly intensively over the past year," Silver said. "It would be something new in the states, so we want to make sure we approach this as a very methodical and deliberate process."

The league's estimate that the patches could generate $100 million a year is in line with a recent study by Horizon Media published by Forbes Magazine that stated ads on game-day jerseys in American sports could generate upwards of $370 million total among the major sports leagues. The study estimated that the Lakers could bring in more than $4 million a year from such ads, while the Knicks and Celtics would generate nearly $3 million each.

The additional revenue would go into the overall pool of basketball-related income (BRI), 50 percent of which NBA players receive as their salaries.

Speaking of which, commissioner David Stern said Silver gave a "very optimistic" report to the owners about the state of the business after the first year of the new collective bargaining agreement. The league is projected to turn a profit next season and the season after that after losing an average of $300 million a year under the previous CBA.

According to CBSSports.com estimates, overall revenue declined about $400 million last season, from $3.8 billion in the final year of the old CBA to about $3.4 billion in the lockout-shortened 66-game season. However, that 10 percent decline was viewed as a success, considering the league lost 20 percent of the season to the work stoppage.

"We had a very happy group of owners in that room," Stern said. "Adam gave a report that our ratings are up 28 percent over the last decade, while [overall] television ratings are down around 30 percent over the last decade."

The league is projecting its best year ever next season in both ticket and sponsorship revenues, Stern said.

The owners also approved several enhancements to the instant replay rules that were recommended by the competition committee in June. Starting next season, officials will be able to use replay to review each flagrant foul to determine whether it is a category one, two or a common foul. Previously, replay was only permitted to review the more serious penalty-two flagrants.

In the last two minutes of regulation and all of overtime, replay may now be used to determine whether a defender was positioned in the restricted area under the basket for the purposes of block-charge calls. Also, in the last two minutes of regulation and all of overtime, replay may be used to determine the accuracy of goaltending calls. Replay will not be permitted for non-calls, only for goaltending offenses whistled by the officials.

 
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