The Brooklyn Nets have been in the news for reasons they’d rather avoid recently, but aside from the antics of their conspiracy theorist All-Star guard, things are going well for the organization. They remain one of the favorites for the championship, and they now have a new stream of revenue via their jersey patch.
The deal set a record for the amount of money involved, eclipsing what more established franchises hope to attain. But as teams continue to push for more money from prospective companies, it remains to be seen if these deals are worth the trouble for the sponsors.
The Brooklyn Nets’ jersey deal sets a new standard
Last month, Brooklyn and New York-based brokerage platform Webull agreed to a deal for the latter to sponsor a patch on the Nets’ jerseys. The terms of the agreement have not been announced. But CNBC reports that it’s a multi-year contract that will pay the Nets about $30 million per year.
Webull replaces the jersey sponsor Motorola, which appeared on the jersey for the 2020-21 season. The deal covers more ground than just a small piece of Kevin Durant’s uniform. The electronic trading platform’s logo will also appear on the jerseys of the WNBA’s New York Liberty, the NBA G League’s Long Island Nets, and their NBA 2K esports team.
Webull also obtained the local and international rights to leverage the Nets’ intellectual property outside of North America. The company will have digital advertisements at the Barclays Center and work with the Nets to enhance STEM programs for underserved communities throughout the city.
Other franchises have brokered big patch contracts, but nothing like the Brooklyn Nets’ jersey deal
Brooklyn’s deal with Webull easily eclipses the previous record for the most expensive jersey patch, as CNBC reports. There was previously a tie for the biggest deal between the Los Angeles Lakers and Golden State Warriors.
The Lakers partnered with South Korean food maker Bibigo for a patch sponsorship reportedly worth $20 million a year. This was a significant increase over the $12 million their previous sponsor, Wish, was paying during their three-year deal. The Warriors’ deal is with Japanese retailer Rakuten.
It’s impressive that the Nets were able to get a contract this big. This speaks to the networking power of Joe Tsai and the global wattage of their superstars. The Webull deal is worth three times more than the naming rights to the entire arena.
It’s clear to see why companies would pay this much to be a tangential part of the NBA. The league is viewed by a global audience, and the players have the type of dedicated fanbases that will celebrate anything they even tacitly endorse.
Jersey ads are nothing new, but are they a good investment?
Patches on the jerseys are normal in other sports. Sponsorships are rife in the soccer industry — Manchester United has a “global lubricant” partnership with Gulf Oil — and the WNBA has had them since 2009. The NBA became the first of the four major U.S. professional sports leagues to add sponsors to jerseys in 2017.
Of course, people complained about the changes before quieting down once they became a normalized part of the jersey. The NBA found another way to make money without directly impacting the on-court product. Even a deal worth something as relatively small as $10 million could represent a 5% increase in total annual revenue for a franchise.
To make the asset more attractive, the NBA increased the size of patches and permitted teams to leverage global rights. But Huddle Up explains that many companies that initially partnered a few years ago are not extending sponsorship contracts. This could be a sign that these deals are not bringing in the sort of profit that was expected.
Not that that’s stopping anyone from chasing the clout of a jersey patch. The Portland Trail Blazers landed the NBA’s first cryptocurrency jersey patch via crypto platform StormX prior to this season.