Acceptance of jersey sponsorships may boost naming rights deals

05Oct10

The jersey sponsorship debate isn’t new to the U.S.’s major sports leagues, but the recent disclosure that 20 English Premier League teams made $155 million by selling ad space on uniforms may have some leagues inching closer to placing that first brand’s logo on what has been sacred territory in the sports marketing space.

Dallas Mavericks’ owner Mark Cuban even went as far as to say that it is not a matter of “if” it will happen, but of “how much.” But will placing a logo on a jersey really be as valuable as some are projecting the costs?

Looking at a similar progression of stadium naming rights, the once hot new advertising space has been devalued and is now almost considered passé, as some of the U.S.’s finest new stadiums are having trouble placing a partner’s name on the building.

If a sponsor were to shift its sports spending from a naming rights deal to a jersey sponsorship, the only real benefit would be the increased visibility. Unless the sponsor also bought the rights to the team name, which is highly unlikely considering the already high barriers to increased sponsor exposure in certain areas, such as when the MLB tried to place “Spider-Man 2” promotions on the bases, it may not be as valuable as it is made to seem.

When a brand is affixed to a stadium, much like the Staples Center, the brand’s equity is increased due to the constant visibility and word of mouth benefits associated with going to an event at the facility as opposed to the game only visibility and deterioration of established sporting traditions that jersey sponsorships offer.

While jersey sponsorships may become the hot new way to advertise in sports, it is missing pieces to become truly valuable to a brand at the price it will command. It may make more sense for some brands to look towards naming rights deals as a comeback trend if many others rush to jersey sponsorships if and when a major North American league starts to offer it.