Advertising Patches Are A Possibility For MLB
Are advertising patches inevitable for Major League Baseball? Baseball, more so than any other North American sport, prides itself on tradition. However, it is hard to deny the benefits of allowing one 2.5-inch-by-2.5-inch patch on a player’s jersey. Simply stated, sometimes tradition can only go so far when the profits are hard to deny.
“It’s early, but we’ve already received inquiries from [MLB] teams curious about that marketplace,” stated former NBA SVP of marketing partnerships, Emilio Collins, and the current chief business officer at Excel, who assisted in selling NBA patch deals for the Charlotte Hornets and Chicago Bulls.
“At the NBA, the first two years were about balancing the aesthetics and economics of the patch. The last two years were just about getting the right revenue-sharing formula.”
According to Navigate Research, the NBA’s tiny patch reaps an average of $7 million per team. Such a profit could quickly then pay for an average player’s salary.
Additionally, because baseball is more stationary than basketball, the thought is any sponsorship patch will get more quality TV time. Furthermore, MLB plays 162 games per season as opposed to only 81 in the NBA. Therefore, there is reason to believe MLB jersey patches could bring in even more revenue than those in the NBA due to the increased amount of “exposure opportunities.”
“We believe MLB values are going to beat the NBA,” stated Kyle Folts, Van Wagner Sports & Entertainment’s vice president of insights. “These will be a great revenue source for MLB teams. It seems like three years is a ways out, but these deals took an average of 18 months for NBA teams, so having enough time beforehand is critical.”
Fans caught a glimpse of possible uniform ads during the London Series. Both the New York Yankees and the Boston Red Sox sported Biofreeze patches on their sleeves while hitters wore a Mitel logo on their helmets.
However, there is some skepticism as to whether the MLB patches will be as lucrative as those of the NBA. Michael Neuman, a managing partner at Scout Sports & Entertainment, has already done an ad patch market valuation for an unknown MLB team.
According to Neuman, “what we’ve learned from the NBA patch is that 75% of the value comes from content shared on digital and social — most of the value is not coming from linear TV.” That being said, the NBA fanbase shares content much more than MLB fans. While LA Angeles all-star centerfielder, Mike Trout has 2.6 million Twitter followers, Los Angeles Lakers forward, LeBron James has 43.1 million.
Still, many teams have already reached out to marketing agencies for both evaluations and pricing estimates for the possible new marketing inventory. The MLB Players Association will have to approve the uniform patch as a part of the next CBA (collective bargaining agreement) which would begin in 2022.
“We’re examining the patch, but clearly we have things to work through first,” stated Noah Garden, MLB executive vice president of business and sales. “I’d say it’s inevitable down the road, but certainly not immediate. This is something that requires a fairly long runway. There are lots of things to take into consideration, but I think we will get there.”
No matter the placement, it is hard to ignore the potential profits. Since the addition of the patch, the NBA has seen a nine-figure increase in its advertising revenue. According to Terry Lifton of the Sports Business Journal, we should expect the logos within three years.
