Will Shirt Sponsorship Be Good For The NBA’s Business Model?

In the 2017/18 season, for the first time in its history, the NBA will allow its teams to have sponsors on their jerseys. Unlike the Premier League teams and other football clubs, the large American sports leagues have been slow to adopt the practice of shirt sponsorship – it’s nearly 40 years since football teams began being sponsored in the UK. But now it looks certain that kit sponsorship will become commonplace.

The vast majority of fans are on the fence about it. Of course, corporate logos will damage the aesthetic of the jerseys, but many people see it as a necessary sacrifice, understanding that money is important in providing the high quality product that they like to see. So let’s have a look at whether shirt sponsorship is good for sport, using football and basketball as our guide.

 

More money in the game

It’s not hard to see the value of sponsorship to any sporting team. Any money that they receive from sponsors can go into new players, improved facilities and other improvements that simply make the team better. Additional money in the game allows for a more polished product to be available, which makes it more entertaining for the fans. Ultimately this is a repeating circle, where the money put in by sponsors allows clubs to improve; this brings in extra fans which increases revenue even further.

However, it’s worth pointing out that the idea of a team getting more money from sponsors is a little problematic. In the example of the NBA, if only one team had the option to get sponsors on their jerseys this financial injection might be enough to propel them to further success. But as all the teams can be sponsored, it simply means the playing field with be level. All will have a cash injection which will mean all will have extra money to spend, so no team will especially benefit. That means that effectively the sponsorship adds money but doesn’t really add any value to any team.

 

Unfairly compensating larger teams

It should also be noted that this move could have the effect of strengthening the teams that are already the strongest. Take the example of a huge and successful team like the Chicago Bulls – they will likely be able to attract a larger sponsorship than less glamorous franchises like New Orleans Pelicans or Sacramento Kings. This means that if the sponsorship is likely to make a difference, the only teams it will truly benefit will be the larger clubs.

This culture of larger teams being able to attract bigger sponsorships is certainly part of what has contributed to the same teams dominating the Premier League every year. So far this hasn’t necessarily been a problem for the NBA with a variety of different teams having success across the history of the league. So there is a danger that sponsorship could consolidate the size and power of more popular teams.

 

Teams are commercialised

Another issue with sponsorship is the fact it could further commercialisation of teams. Of course, part of this is an inevitable reality of modern sport but how long will it be before powerful corporate sponsors start making demands of the teams that they pump money into? This increases the potential for corruption and could ultimately lose the team respect in the eyes of the fans. However, football is a sport that has suffered a great deal from corruption claims in recent years without suffering any noticeable decline in popularity.

 

Disreputable companies

Over the years, some football clubs have signed sponsorship deals with less-than-reputable firms. Newcastle United were sponsored by controversial payday loan company Wonga and Atletico Madrid had the country of Azerbaijan as their main shirt sponsor, despite its terrible record on human rights abuses. Teams are forever associated with these sponsors and it can tarnish brands and the sport itself.

 

Shirt sales

As mentioned before, one of the downsides in shirt sponsorship is that the club’s kit or jersey will have a large corporate logo on it, damaging the commercial appeal. However, it should also be noted that football shirt sales are very high despite the use of sponsorship. It may well be the case that fans don’t actually mind too much about the logo and shirt sales should not suffer. But this is a huge source of revenue for NBA teams – if the NBA does see a slowdown in jersey sales, it’s not inconceivable they would look to reverse the decision.

Written by Lloyd Wells, a freelance writer working with kit, jersey and football shirt specialist Soccerbox.