Sports Business Journal reports that if the NBA sells advertising on its jerseys, it will share the revenue and sponsorship agreements with its TV media partners under the new agreements signed this month.
According to sources involved in the discussions, if there’s a national brand with a jersey deal that would have bought time on ESPN or TNT’s NBA game telecasts — think Coca-Cola orSamsung — the two networks would get specific commitments from that company to also buy TV advertising during any nationally televised games featuring that sponsored team.
Sources familiar with the TV deals admit both networks pushed hard to be allowed to sell ads on team jerseys outright, but the league balked at handing over the potentially lucrative rights. Under the new TV deals, NBA teams maintain the rights to sell the jersey advertising, which has an estimated value ranging from around $800,000 for small-market teams like the Memphis Grizzlies to more than $10 million for large-market teams like the Los Angeles Lakers.
Specifics of the TV buy component have not been hammered out, but the level of spending required by a company sponsoring the jersey would depend on how much exposure the team has on national broadcasts.
“The conversations will start as soon as someone buys a jersey,” said one network executive, discussing how the networks would be paid. “Until then, we don’t know exactly what it will look like.”
As part of its overall media deal, Turner will be able to sell corporate advertising specifically for All-Star Game jerseys starting with the 2017 game, which will be the first season of the new deal. TNT network will continue to broadcast the event exclusively through the nine-year deal. A sponsorship of the all-star jersey should result in a solid payout, as it’s one of the most-watched games of the year for the league.
The NBA and ESPN had discussed selling jersey advertising specifically for the NBA Finals, which airs exclusively on ABC, but those talks did not lead to a deal.
The NBA has made noise about putting ads on jerseys for years. In March, Commissioner Adam Silver said the ads are "inevitable." But the deals will be complicated enough, and that's before the involvement of the media companies. Furthermore, you have to assume that revenue will be included in Basketball-Related Income, which is how the salary cap is set.
Is it crazy to think the cap could be even higher in 2016 under the new media deal than it's already projected to be, which reaches as high as $94 million?
Either way, the money keeps going up, but if the NBA wants to reel in a few more dollars, they have to make good with their TV partners on this front. The league already has made the move to transfer their logo to the back of the jersey to make more room.
