Sponsored uniforms coming to baseball
For some, it might be painful to imagine the historic Red Sox uniform being sullied with a brand name sewn across the shoulder or branded on the sleeve, but sponsored uniforms are coming to Major League Baseball.
It’s just a matter of when.
The issue was quietly inserted as a bargaining chip this week while MLB owners and players continue negotiations to settle on a financial format for a potential 2020 season.
While the players have gone from asking for a 114-game season at prorated salaries to a 70game season, the owners haven’t given much, moving from 50 games to 60 games, but only if the players give some other key trading chips.
One of them: sponsored uniforms.
And according to multiple reports, including The Athletic and the New York Post, the players agreed to move forward with selling ad space on their jerseys, which have gone over 100 years without branding.
“I talked to two teams about it today,” said Chris Allphin, senior vice president and partner at Van Wagner Sports and Entertainment, which has helped NBA and MLB teams discuss the issue. “They were completely opposed to what they thought would happen. One told me he thinks they’ll see sponsored uniforms in the 2020 season.
“I’m skeptical of that. You have to sell the deal, you might bring it to an existing partner or you have to find a new partner, and Nike (which just took over as the official MLB uniform) is not fully up to speed. You have to manufacture the art, get it right, get it sewn on, and have it ready for whenever this mysterious opening day might be.”
As likely as it is that MLB moves forward with sponsored uniforms soon, it’s a stretch to think they’ll have time to get them made for this season, if there is one.
“I don’t buy it that we’ll have them in 2020,” Allphin said. “If a
team had a great relationship with a specific partner, maybe the naming rights partner, they’re close with them, ‘OK, I’m giving you this patch to test it out,’ I could see that happen this season. But the moving pieces are so difficult.”
The Red Sox have been around since 1901, changed their name from the Red Stockings in 1908 and have largely used the same uniform since 1933. Given they’ve resisted selling naming rights to Fenway Park, one of the few MLB stadiums that has yet to do so, putting a sponsored patch on their uniforms would represent a significant change, and one that might be met by fury from baseball purists.
But it’s coming. And after the NBA approved sponsored patches on uniforms in 2017 and has seen great success doing so, it became likely that MLB would follow suit.
Noah Garden, MLB executive vice president of business and sales, told Sports Business Journal last July “I’d say it’s inevitable down the road” that MLB would do the same thing.
The expectation was that it’d be a part of the next collective bargaining agreement, which is up after the
2021 season. But with bargaining already going on for a 2020 season, these conversations have been fasttracked.
“We’ve seen it in the NBA and that’s been a very successful program for them in terms of, I don’t think they got the pushback that some may have expected from fans,” Allphin said. “It was actually hard to find those jerseys when they first came out because fans wanted the real deal and they were only sold in the team stores at the stadium. It was a commercial success.”
Because of the limited supply of official jerseys with the logo, some fans even went to Etsy to find homemade sponsorship patches they could sew onto their jerseys to make them more authentic.
Sponsored jerseys are new in the United States, but commonplace all over the world, where companies’ names are spread across soccer uniforms in Europe and baseball uniforms in Asia, among others.
In the NBA, it’s estimated that teams were making, on average, an additional $8 million per year in sponsorship from their uniforms.
There were a few problems with this, Allphin said.
“The NBA halved it twice,” he said. “So if you got $5 million for your patch, $2.5 million went to the players, then $2.5 million was kept. Of the $2.5 million you kept, the local team kept half, the other
The Celtics added a GE patch to their uniforms in 2018 and other NBA teams did the same with their own sponsors.
half went to revenue sharing. So the local team kept 25% of the deals they sold.”
But because not every team sold a jersey sponsorship right away, and some teams made significant more money off the deal than others, it was frustrating to some.
And the money was difficult to track.
“They packaged these jersey packages with a whole lot of things, like courtside seats, some LED rotation, and the Warriors got naming rights for the practice facility,” Allphin said. “So it’s very hard to extrapolate what came from the jersey patch itself.”
Baseball could be even more lucrative.
“I think baseball has a huge opportunity,” he said.
While the owners are haggling with the players over about $8 million per team (they’re roughly $250 million apart, so divide that by 30 teams), they could capitalize on more than that through jersey sponsorship.
The $8 million per year NBA teams are estimated to have received should be less than what baseball teams net.
“We’ve done a lot of work on this, so it’s not a guess,” Allphin said. “That $8 million is a little high in the NBA, a lot of other assets were packaged into the deal. The average deal was around $8 million or higher but if you just isolated the
patch, that’s closer to $5 million.
“Baseball has some big advantages over the NBA. It’s a much better game for sewing something on the uniform. There’s a lot of standing. The longest shot from baseball is from center field, over the shoulder of the pitcher, zooming in on the batter. There’s 25-30 minutes a game focused on the arm.
“In the NBA the players are moving. The only time you get them stopped it’s on a foul line. And it’s not even close. So baseball is better off for clarity but they also have double the games. You get a lot more exposure there.”
There will be questions about just how much money a jersey patch is worth, and if a new team partner should bother getting involved. Kim Skildum-Reid, who runs Power Sponsorship, a company that offers branding consulting to firms including Target and Unilever, believes it could be a waste of money for new sponsors.
“I’m not averse to a company being a big sponsor of the Red Sox and getting a lot of really interesting, creative, super leverageable benefits that’ll really move the needle on real objectives,” she said. “I’m super happy to work with them on a big sponsorship and leverage it in a big way. But I think that (a logo on a uniform) is just window dressing on the whole thing. It’s corporate ego. Or a lack of
sophistication. Just because you have a lot of money to do that doesn’t mean you’re sophisticated about this stuff.”
She pointed to the North American Study of Arena and Stadium Naming Rights Sponsors, which she said revealed market capitalization rates for companies went up 1.65% upon announcement of a new naming rights deal with a sports team. The real value then, she said, is in the change in stock price that could result in the projection of strength and confidence through the deal.
A simple sponsorship to add a logo on a uniform may not be as powerful.
Whatever money baseball teams are able to generate is still expected to be more than that generated in the NBA.
The question is, how much of that money will go directly to the players?
“The first negotiation would be, is this baseball related revenue or is it not?” Allphin said. “But the reason it’s coming up now in the CBA is they’re doing this above board and clearly planning on including the players.
“It’s proven in the NBA and in the (English Premier League) that if you look at the dollars generated in the premiership and call it international soccer, those deals are well in excess of a naming rights deal. Look at Barcelona getting $30-$40 million per year for these partnerships.”