European soccer clubs have sported sizable corporate logos on their uniforms for decades. Not so the teams of the North American major leagues--the NBA, MLB, the NFL and the NHL--which have long considered their jerseys too sacred to be tainted by them.
Now the NBA wants to scrap that tradition. In July deputy commissioner Adam Silver announced plans to allow 2.5-in.-by-2.5-in. ads just below the left shoulder on team jerseys. The move--which awaits formal approval in September--would create a windfall for the NBA, generating as much as $100 million in revenue per year. If the deal goes through, other American big-four sports will likely follow. But U.S. teams may have a hard time matching the size of the ad deals being made in European soccer.
Why? Because U.S. basketball, baseball, football and hockey haven't become worldwide crazes like European soccer, which is itself a global brand, big not only in Europe but also in lucrative emerging markets. The U.K.'s Premier League, for instance, by far the world's most popular soccer league, will take in about $230 million in shirt sponsorships next season. Its jersey-front sponsors include global financial giant Aon, which has a four-year, $120 million deal to advertise on Manchester United's jerseys, and Samsung, which has a $21.5 million-per-year deal with Chelsea. David Prosperi, Aon's spokesman, says that on days when Man U plays in countries like India or Japan, the company sees a boost of 150% to 200% in Web traffic, helping Aon "access those markets."
In the NBA, a few top teams like the Miami Heat and the Los Angeles Lakers could get ad revenue from global brands like AIG or Barclays, but most teams would likely tie up with less lucrative, U.S.-focused sponsors like Target or Taco Bell. Also, tighter regulations on logo placement and which types of companies could advertise could hold back ad sales in the U.S. The Premier League takes in $14 million from breweries and online-gambling sites. But NBA commissioner David Stern "wouldn't want to choose to partner with any company that would run a risk" of sullying the brand for conservative fans, says University of Oregon economist Paul Swangard.
Still, there are opportunities. In July, Chevrolet and Manchester United announced a blockbuster shirt deal for the 2014--15 season worth close to $40 million a year. Although Chevy is a global brand, it still sells more vehicles in the U.S. than in all of Europe. There's a good reason to consider cozying up to the all-American NBA.