Eyeballs + Ads = Sports (But Brands Could Be Even Smarter)
Eyeballs + Ads = Sports (But Brands Could Be Even Smarter)
And a bonus section on how Netflix’s hit show “Last Chance U” plays into this.
Billions of eyeballs. Up-close camera coverage. Passionate fans.
Sports are an advertiser’s heaven.
And over the last few years, North American sports leagues have caught on to one particular trend.
Jersey advertising patches.
But just how lucrative is it?
And my unique take on where it’s headed + tips for brands (even startup companies).
Let’s Dive In 👇
Jersey Ad Patches
Europe is home to some of the world's most valuable sports teams.
So, naturally, it's also home to some of the world's most valuable sports real estate: the uniforms those teams wear.
But how does it work?
Premier League teams make money from their uniforms in 3 ways:
Uniform Supplier
Main Sponsor
Sleeve Sponsor
Uniform Supplier
The four major North American sports leagues handle uniforms at the league level.
Nike is paying $1 billion over eight years to be the official apparel provider for all 30 NBA teams.
However…
Adidas is paying $919 million over 10 years to be the official supplier for Manchester United, alone.
Interesting, right?
Main Sponsor
This is the advertisement that appears across the center of the chest.
European soccer clubs stamp this right in the middle, while US leagues have the sponsor on the top right.
The NBA launched its ad program in 2017 — at the time, commissioner Adam Silver estimated it would be worth $100 million in combined revenue for all 30 teams.
In 2022, the jersey patch program’s combined value was $225M — more than double initial estimates.
Powerhouse franchises like the Warriors and Lakers lead the way by generating nearly $20 million per year on their respective patch deals with global partners Rakuten and Bibigo.
Sleeve Sponsor
In 2017, the Premier League followed the lead of other European Soccer Leagues and began allowing teams to sell the rights to their shirt sleeves.
A similar model was adopted in MLB baseball (and will debut this upcoming season).
The San Diego Padres became the first team to sign a deal — but the Red Sox have the most lucrative at $17 million a season.
Looking Forward
There’s no “right” way to do it, but I believe Europe is nailing the sponsorship angle better than North America.
Why?
Fewer commercials. More ads on jerseys.
As attention spans continue to decrease, this will become even more important for North American sports leagues to think about.
NFL jersey patches are inevitable (as they are the only major sports league without them).
And with NFL jerseys crossing over $2 billion dollars in 2022 worldwide sales — those ad patches could be quite lucrative.
One day…
College teams will have ads on their jerseys as well.
Media Value
Here’s how much value a sponsor gets:
With 82 NBA regular season games, a jersey sponsor is getting ~$2,034,912 in media value, according to this model by Nielsen.
Most sponsors are paying $3-5 million per year…
The quantitative data might say it’s not worth it, but you also have to account for all the jersey sales with your logo on them and social media posts.
For brands with big budgets, I would say it’s most definitely worth it.
Brands Could Be More Creative
Last Chance U: Basketball is a Netflix show that details the life of Junior College (JUCO) basketball players at East Los Angeles College (ELAC).
Last Chance U ranks at the 89.3th percentile in the documentary genre (meaning it has a higher demand than 89.3% of all documentaries in America).
And its popularity has an impact across sports…
Look at Season 1 star Deshaun Higher.
He went from a few thousand followers before the show to over 351,000 as of today.
And this has resulted in big bucks for Deshaun.
But just how much?
Deshaun has brand deals with ShopGLD, VKTRY Gear, and FashionNova.
And I know his agent, who told me he’s built a business well into the 6-figure range.
After ELAC, Deshaun played one season at Sacramento State before turning pro in the country of Colombia.
I bring this up for a few reasons…
1. Brands could be much smarter
A smart brand would have noticed that Netflix’s show Last Chance U was coming back to ELAC for a second season.
They would have then put themselves in a position to:
sponsor warmup shirts
provide them with headphones
make sure players are drinking their beverages
Even better…
A brand could go sign NIL deals with ALL the players at ELAC and have them promote it on their social media accounts — which would also be on the Netflix show.
It’s about growing alongside these athletes — something brands are slow to understand.
And this opportunity wouldn’t have been too expensive — startups could have capitalized on it for $15,000 or less.
2. Traditional Media + Social Media
With the legalization of NIL across all ages of sports, there’s a clear dynamic between traditional media and social media.
A sports documentary like Last Chance U, helps increase the social media following of players on the show.
But it also works in reverse…
A large social media following for players helps increase the number of viewers for a show like Last Chance U.
To me…
This is a dream scenario for everyone involved:
athletes get paid
TV shows get sold
advertisers get eyeballs
Netflix gets more subscribers
You and I get entertaining shows
For the first time in history, NIL has enabled everyone to win in sports (and at a much greater scale).
Fun times are ahead!
Podcast 🎙
I had a great conversation with Brian Fagan, he’s the founder of Oncoor Sports.
Fascinating segments on the creator economy, NIL collectives, and how he scaled his sports marketing agency to an acquisition.
You can listen to the episode here.
Thanks for reading today!
I hope you find these briefings interesting (I enjoy researching/writing them).
And I appreciate those of you that continue sharing them with others.
Peace,
AP
Sources:
https://www.espn.com/nba/story/_/id/13053413/nba-signs-8-year-apparel-deal-nike
https://www.bbc.com/news/business-28282444
https://chargedupbolts.com/blog/nfl-jerseys-sold-over-2-billion-in-2021
https://profluence.com/sports-media-publishers/
https://www.masslive.com/redsox/2022/11/red-sox-reveal-first-ever-uniform-advertisements-massmutual-patches-coming-in-2023.html
https://tv.parrotanalytics.com/US/last-chance-u-basketball-netflix