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The question is how much some teams can make off these jersey sponsorship deals. The Sixers’ $5-million-per-season rate is substantial for a team that hasn’t tried to win games for three years, even if their glut of young talent suggests they could at least find their way to national TV soon. If Philadelphia can get that much, what can we expect from glamor teams like the New York Knicks and Los Angeles Lakers? Or, for that matters, from true title contenders sure to stay on television deep into the spring?
A new report suggests that the loaded Golden State Warriors could set the high mark for franchises in jersey ad negotiations. According to Darren Rovell of ESPN.com, the Warriors are asking for an annual payment that laps the Sixers’ total several times over:
The Golden State Warriors are asking for $15 million to $20 million per year for the rights for a company to put its logo on their jersey starting in the 2017-18 season, sources told ESPN.
It is believed that the Warriors, who won the NBA title in 2015 but lost in the Finals to the Cleveland Cavaliers in seven games this year, are asking for more money than any other team. […]
What companies will ultimately pay is said to be based on how much is included in the package beyond the logo on the jersey, such as whether they get sponsor category exclusivity, arena signage inventory and breadth of use to a team’s logos for marketing.
As Rovell writes elsewhere in his report, the Warriors’ case for their ability to make $15 or $20 million a season off a 2 1/2-inch square patch is fairly clear. They won a league-record 73 games in 2015-16, have four All-NBA players on the roster, boast an especially watchable superstar in Stephen Curry, just added Kevin Durant in the biggest free agent signing since LeBron James, will be on national TV many times for the foreseeable future, and now break their own local TV ratings on a regular basis. Golden State figures to be one of the NBA’s most visible teams for at least a few more seasons, and that kind of certainty means that a sponsor can be fairly sure their logo will be seen by people all over the world.
The kind of company that would choose to pay such a high fee is unclear. Rovell suggests that it would most likely be one with a fair amount of competitors, such as a tech company, which makes some sense given that a global brand with one or two major competitors — he mentions Coca-Cola and Pepsi — has no real reason to differentiate itself with such a small advertisement patch. At the same time, any tech company big enough to pay $15 or $20 million annually might not have many serious competitors, either.
It’s also possible that the Warriors (among other teams) will see the jersey patch as an opportunity to brand themselves in addition to making money. Golden State owner Joe Lacob comes from the world of venture capital and has made little secret of his desire to make the Warriors the NBA’s most tech-savvy and innovative franchise. That plan includes a planned move from Oakland to San Francisco, which could portend an agreement with a company associated more with the latter city.
Whatever the Warriors do with their advertisement patch, it’s important to remember that these sponsors won’t just occupy signage in an arena. They’re going to be associated with the most important aspect of a professional basketball team — the product that exists on the court. The financial ramifications may not be as important to these deals as what each sponsor says about the franchise, and vice-versa.
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Eric Freeman is a writer for Ball Don’t Lie on Yahoo Sports. Have a tip? Email him at [email protected] or follow him on Twitter!Follow @FreemanEric