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What Is The Value Of Jersey Sponsorship?

The NBA’s move to allow jersey sponsorship brings up questions

21Jun

Anyone who knows anything about sport will be aware of just how staggering a financial machine it is. Inflated transfer fees, ludicrous wages paid out to athletes, mega sponsorship deals - it’s all there. Sport’s reach, coupled with the emotional response it inspires in its fans, is a quite unique proposition for brands looking to associate themselves with something so overwhelmingly popular, and deals can be eye-watering.

No sporting competition sees deals quite like the English Premier League, sponsored by Barclays. The bank paid £120 million for three years of title sponsorship and piled further cash into exploiting the rights that came with it. German sportswear giant Adidas has paid £750 million for the privilege of designing and producing Manchester United’s jerseys, while Chevrolet signed a deal worth £51 million a year to have their logo on the front of those jerseys, AON has even paid $30m per year to sponsor their training kit. The Manchester club is a special case, but brands will put up mouth-watering sums to appear on club soccer jerseys due to the wide international reach, particularly in otherwise difficult to reach areas in Asia.

A good illustration of how far jersey sponsorship has come in being almost a financial necessity in soccer is FC Barcelona. The world’s second richest club shunned jersey sponsorship for the first 111 years of its existence, before agreeing a deal with charity UNICEF in 2006 in which the team actually donated $1.5 million annually while featuring the sponsor. As this deal ended and financial pressures mounted, Barcelona set a record when it announced its deal with the Qatar Foundation in 2010. Many Italian and Spanish first division teams are still without a jersey sponsor, but the unadorned kits do stand out as anomalies among Europe’s top clubs, which are as much focussed on their top lines as they are the aesthetics of their kits.

There is no one reason why these clubs shun jersey sponsors, particularly those that are playing in European competitions and thus have reach well beyond the confines of their national borders. The principle theory is that their valuation of the jersey space doesn’t match what brands are willing to pay them, particularly in two economies that have had a difficult few years (with GDP only set to return to 2008 levels this year). Another is that fans appreciate a sponsor-free jersey, but money speaks louder than fans in a sport that global so the former is more likely the case.

Next season, NBA fans will be waving goodbye to jerseys as they know them. In what is quite a tentative change - designed, in all likelihood, to upset fans as little as possible - the NBA will allow for 2.5 square inch patches to sit above the team name, opposite from the kit manufacturer, a sort of reverse of the current situation with soccer jerseys. All deals will have to be structured as three-year trial periods, according to Forbes, and so far six teams have confirmed that they will take advantage of the new revenue stream. Of the six currently confirmed, the price tag is anywhere from $4 million to $8 million per year.

So it’s clear what jersey sponsorship offers clubs and sporting bodies - incredible sums of money - but what it offers the brand is far less tangible.

Companies like IdenTV are changing the way brands measure their sponsorship efforts by assessing video and their brand’s position within it. Drawing video from sources like TV, live streams, and online archives, the company’s technology uses automated content recognition (ACR) to build a big data index around the video. The ACR system is capable of facial and object recognition, and is able to track in-video movement of people, brands, logos, or targets. It is technology like this that is giving marketers a new depth of insight into their campaigns. Quantifying how many times a brand logo appears over a season’s worth of NBA footage, for example, would take far too long if done manually, and having hours of video analyzed in real-time can be invaluable.

There’s a lot of value to be gained on both sides of any jersey sponsorship deal. For the brand, the exposure can be vast and is becoming more quantifiable as technology develops, while for the team the financial benefits can be too persuasive to ignore. Basketball fans will soon get used to branded badges on their jerseys, and expect to see the rest of the NBA follow suit. 

Sources

Image: Shutterstock.com

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