NHL jersey patch, NBA digital promoting will overload sports activities sponsorship in 2023
The Montreal Canadiens compete against the Tampa Bay Lightning in the NHL game at the Bell Center in Montreal, Quebec, Canada.
Francois Lacasse | National Hockey League | Getty Images
From the NBA to the NHL, the leading US sports leagues are creating more space for advertisers to gain visibility and help networks recover from the losses caused by Covid-19.
The national basketball association wants to expand its sponsorship with virtual advertising on the field. After the Major League Baseball placed ads near the circles on the deck and behind the pitcher’s mound, it joined the patch party with logos on officials’ uniforms. And the National Hockey League put in helmet ads to offset corporate partners’ pandemic losses. The NHL jumped on the jersey patch trend of other sports.
According to the Associated Press, the NHL plans to add the kit patch from the 2022-23 season. By then, the sports sponsorship market could become overloaded, especially at the team level.
“It feels like we’re selling the little things now,” said Peter Laatz, global managing director at sponsorship rating company IEG. “Everyone is trying to fill in holes that arose last year.”
NBA uses the basketball court
Jersey patches are nothing new. The NBA began its program of uniforms in 2017, and Laatz said the concept was “something that has been practiced at European football clubs for years”.
MLB has been using virtual ads that appear behind home plate since the 2001 World Series. The premium property is only available to national partners, including Fox Sports, which owns the rights to the championship games. MLB is working with advertising technology firm Brand Brigade to create the signage and attracting eight characters for the slots, which are of value because of their placement in the main setting of a game’s broadcast.
Last year, during its Orlando bubble, the NBA launched their version of virtual ads or logos that are interchangeable in the square for the television audience. League officials gave guidelines on avoiding colors, the size of logos, and ad placement. The NBA used the ads again for the 2020/21 season and allowed regional sports networks to access the asset.
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Networks are allowed two sponsors per game. In order to preserve the national TV real estate, companies must sign major media deals with the NBA and its partners. At the regional level, industry insiders suggest the ads cost around $ 15,000 per quarter.
Laatz called the NBA virtual advertisements “disruptive in a good way” because they have the potential to grab viewers’ attention. Jeff Marks, the CEO of Innovative Partnership Group, a sports business company that helps negotiate agreements for teams, described the NBA advertising as a “high quality asset” because of its location on the pitch. Brands can also enter into deals that include virtual ads and allow rotation on NBA side boards under the scorer table.
“It’s probably the most valuable inventory of naming rights we see for NBA teams,” Marks said of the in-game TV signage. “In terms of the number of impressions you get, these are significant assets.”
The NBA has made over $ 150 million since launching its jersey patch program, but its patch money appears to be stagnating. So the league improved visibility (increased logo sizes) to add value and created options for training jerseys.
The NBA’s record $ 1.46 billion in sponsorship revenue should only reach new heights if the virtual ads create good media value.
The NHL will face challenges with its kit plans
The NHL is no stranger to virtual ads either, and plans to release jersey patches soon. The league is now taking advantage of the additional TV presence as ESPN and WarnerMedia are media partners.
Teams like the Detroit Red Wings and Dallas Stars are already taking full advantage of the helmet sponsorship. A study by research firm Morning Consult suggested consumers approve of the ads, which the NHL has secured $ 676 million in sponsorship money for the 2020-21 season, according to the IEG.
“But a large part of the helmet sponsorship was not new money,” said Laatz. “It was inventory of merchandise. That’s maybe what you’re seeing here (with the NHL patch) – trying to find more real estate to put logos on.”
The thing is, the NHL’s newest asset isn’t as shiny as the other leagues.
The speed of the game in hockey doesn’t offer great visibility like the NBA does, which allows brands to take advantage of close-up shots of the free-throw line. And while it’s accepted in sports, the violence associated with the NHL is risky for corporate partners.
“Buyers of the patch would be wise to speed up the game talk,” said Laatz.
In addition, the NHL already has a plethora of ads appearing on its broadcast. The spots on the dashboard are most effective as these ads give consumers “good contrast” of ads and offer “good returns for sponsors,” noted Laatz.
When Laatz debated estimates of what the NHL could bring in from the new patch, Laatz predicted that the NHL would not ask as much of the NBA. “People don’t follow individual NHL players the way they follow NBA stars,” he said. “The star power piece is different.”
Los Angeles Angels manager Joe Maddon # 70 speaks to the umpires about fan interference during the seventh innings of the game against the Detroit Tigers at Comerica Park on August 17, 2021 in Detroit, Michigan.
Leon Halip | Getty Images
Jersey jumble is coming
The NHL’s introduction of jersey patches will result in a crowded sponsorship space by 2023.
There are arena naming rights, sports drinks rights and now an overload of jersey patches. Also keep in mind that Major League Soccer has patch deals and international soccer clubs like PSG are slowly creeping into the US landscape.
“That’s a fair assessment,” said Laatz of an overcrowded sponsorship market on the horizon. “It doesn’t necessarily devalue something. It just makes the conversation about what already existed – is more or less worth it.”
However, Laatz cautioned that brands should be associated with new sports sponsorships unless they offer accurate returns once the games are over on TV.
“Consumer sentiment is different from media exposure, which is very binary,” he said. “The eyeballs were there or not. Consumer sentiment is turning [discussing the product after the ad]. “
But with the NHL’s move, multi-team ownership groups could benefit.
Monumental Sports and Entertainment takes the lead here. The group owns the NHL Washington Capitals franchises, NBAs Wizards, and WNBAs Mystics franchises. MSE has combined its jersey patches and the group is seeking $ 12 million for its patch to help spread the fortune across four teams including Esports and the NBA G League.
Laatz praised the creative combination and called it a “miniature naming right”. The Capitals could be part of the package in the future, which only increases the patch value of the MSE.
“It’s great,” said Laatz of MSE’s move. “Brands can conduct a transaction, contract, and kit patch asset across multiple clubs. Sometimes multiple entry points across multiple contract terms can become complex for buyers, so this is a benefit. When the rules are the same, marketing, merchandising – when I’m a buyer, I look at this combination. “