The next big thing in sports might be closer than imagined. The tough economic times have affected the entire country – including sports. And advertising logos on jerseys may be on the horizon for the future of sports. At the end of the day, teams and leagues are a money-making business. Advertising and branding is paramount.
There are various delivery systems for advertising in the world of sports. Broadcast TV ads, Cable ads, overlay ads, signage, and product placement are all ways in which advertising thrives.
For businesses, advertising in sports can be advantageous since sports programming tends to provide advertisers with a loyal, core audience that is DVR-proof. The majority of sports are viewed live.
And, really, TV is the most exciting and persuasive advertising medium, more than half of all advertising dollars are spent on television.
But TV isn’t the future.
It’s already started
The first U.S. sport that comes to mind with regard to ad placement and logos seen on the players and equipment is NASCAR. The logo on the hood of a car driven in NASCAR belongs to the primary sponsor who also gets to choose the paint scheme and team colors. For example, Tony Stewart drives the number 20, black and orange, Home Depot car. Associate sponsors are responsible for the bevy of stickers that sprawl across the fender, back bumper, and windows.
Advertising on the car itself does not come cheap. Size and placement of brands/logos influence cost, with the quarter panels being the most expensive place to add a logo. Buying that spot, for an entire season costs upwards of $1.5 million. The next most expensive location for logo placement is an area called the C-pillar, next to the rear window on both sides of the car, costing around $500,000 a season. There are limitations that NASCAR has implemented when it comes to ads and logo placements which include, size and location. Similar limitations would certainly be considered by the major sports if they were to allow logos or signage on team jerseys.
Every time a NASCAR race car is on camera or the sponsor’s name is mentioned, it is assigned “exposure value” by Joyce Julius & Associates. According to Joyce Julius & Associates, Lowe’s Home Improvement Centers, sponsor the 2009 Sprint Cup champion Jimmie Johnson, benefited from nearly $200 million in exposure value in 2008. Exposure value equates to the amount of money a sponsor would have spent on commercial advertising time compared to the amount of time the logo appeared during the allotted programming slot. Although, in the end, the question comes down to whether or not exposure value is worth as much as purchased television advertising with scripted content that includes a call to action. While the return on investment isn’t lucrative, it is a substantial alternative to sports advertising on television. NASCAR has a fan base of over 50 million viewers and is growing. Advertisers can calculate their return based on the number of seconds their logo is clearly visible on television and multiply that by the average rate of a TV commercial to see how far their logo investment in NASCAR is going.
Across the Pond
According to the New York Times, in 2006, “In Europe, advertising on team jerseys, in soccer and other sports, has been around for more than 30 years.” In 2005, Manchester United of England signed a four-year shirt sponsorship deal for $106 million with the insurance company, American International Group (AIG). The soccer club Chelsea was receiving $18.7 million a season from a five-year deal with Samsung. The logos and brands of companies has made its way into the states and on the field of the MLS. The Chicago Fire is sponsored by Best Buy, D.C. United made a deal with Volkswagen, and the New York Red Bulls made a deal with Red Bull energy drink. The placement of ads and brands on jerseys seen on the field of play by sports fans has money-making potential for investors.
Slowly turning around
The move to place logos on jerseys in major U.S. sports such as the NFL, NBA, and NHL has already begun. According to Sporting News this past September, the New Jersey Nets are the first NBA team to sell a practice jersey sponsorship, which put the logo of PNY Technologies on their practice uniforms. Like the NFL, the NBA this year allowed teams to sell practice jersey sponsorship deals as leagues continue to search for additional revenue streams for its clubs. There is no way to calculate the value of the company logo placed on a practice jersey since this move is the first of its kind for the NBA. However if the placement proves profitable, then it could become a trend.
The slow encroachment of commercial space on practice jerseys in the NBA and NFL is a current reality. Due to dire economic circumstances and struggling ratings the WNBA has already made the decision to allow sponsorship logos on game jerseys as of the 2010 season. In addition to the NBA one day placing logos and slogans from sponsors on its uniforms, the NHL could also be making a move to place logos on its jerseys. NHL chief operating officer John Collins says the league might put ads on game jerseys for the right price. Again, there are many reasons why people tune into sports on television, but at the end of the day it’s a business. The NHL over the years has placed advertising on everything from the arena, to the ice, to the boards players get checked into. However, due to the money making potential advertisements pose for struggling sports like hockey or baseball, the idea may not be far-fetched.
From a monetary stand-point, advertising on game and practice jerseys in professional sports makes sense. However, from a tradition standpoint, there are some league and team owners who would never welcome ads and logos on team jerseys. At a sports industry conference in New York in 2006, NFL commissioner Roger Goodell said the current model of sponsors’ buying advertising time on TV was enough for now. MLB commissioner Bud Selig told Reuters that the game was held to a different standard, and that “part of the lure of our game is the history and tradition.” Keeping tradition in mind, can you imagine the MLB placing ads on the jerseys of a team like the New York Yankees? It’s understandable that some league and team owners don’t want to pollute tradition for the sake of making money.
Maybe later…
Personally, the prevalence of advertisements and company logos in a sport such as NASCAR doesn’t bother me. But, when it comes to the major sports, in leagues like the MLB, NFL, and NBA, the thought of advertising and logos on jerseys feels unsettling. There is a tradition that comes to mind: The New York Yankees, the L.A. Lakers, the Dallas Cowboys, and the Detroit Red Wings. Those team jerseys have had a distinct look and created a tradition that paints a vivid picture in the minds of sports fans across the country. If the placement of ads and logos on jerseys isn’t done in a tasteful manner, could potentially turn many fans off to watching the sport or team they love. Today teams in the major professional sports are turning to ad/logo placement on practice jerseys, but in the near future, the world of sports television may see a decline in commercial TV ads in place of advertisements on team jerseys.
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