NBA announces approval of official jersey sponsorships

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The National Basketball Association is the most progressive of the major North American sports leagues. For many, it was only a matter of time until this day arrived. If you followed the world of sports business, then you probably knew that the NBA would be the league to make the first move: jersey sponsorship advertisements have finally arrived.

The league’s Board of Governors approved a three-year “trial period” of jersey sponsorships, beginning with the 2017-18 season. The announcement arrived on Friday morning and includes a league press release. Advertisements must fit in a 2.5-inch-by-2.5-inch patch on the front left of the on-court jerseys, opposite the soon-to-be-arriving Nike swoosh.

Teams will be able to sell their own jersey sponsorships in their local market. That means that ads likely will have some type of regional flare, with the usual companies expected to come to mind for the Cleveland Cavaliers. This also means that sponsorship amounts will range wildly between teams, just as you might expect in the overall franchise valuation difference between the Warriors and the Bucks, or the Knicks and the Sixers. USA Today’s Jeff Zilgitt reported that these new sponsorship deals could bring in $150 million for the league, according to a rough industry estimate.

NBA fans will recall that the 2016 All-Star Game was the first true test run of a corporate advertisement on a jersey. Kia, the league’s official car sponsor, had a 3.25-inch-by-1.6 inch oval opposite the current Adidas logo. That two-year deal — including the 2017 All-Star Game currently scheduled to take place in Charlotte — was made through Turner Sports, since the league’s governing body already had given away those rights in the All-Star media rights deal.

Nike’s new eight-year $1 billion league apparel deal begins with the 2017-18 season and, for the first time ever, includes the swoosh on all on-court jerseys. The current Adidas apparel deal, valued at only $400 million over 11 years, only included the three stripes logo on jerseys sold at retail. The new corporate advertisements will not be required to be sold on the retail jersey, but that will be up to the discretion of the teams.

For as much as fans might be unhappy about today’s news, many were likely bracing for this inevitably to occur. The NBA’s strict guidelines of the 2.5-by-2.5 patch also should be considered a win for fans, as advertisements hopefully won’t go too overboard, at least not for these first three years. The NBA and the Player’s Association are expected to engage in Collective Bargaining Agreement negotiations in summer 2017, so it’s possible this new arrangement could increase the salary cap by a couple more million dollars per year.