NBA looking to raise $150M annually with ads on uniforms
Shortly before legendary Boston Celtics executive Red Auerbach died in 2006, he OK'd the addition of a dance squad, making his team the last in the league to do so. "You've got to pay the bills," he told Celtics owner Wyc Grousbeck.
A decade later, the team has gone from holdout to innovator, becoming just the third franchise (along with the Sacramento Kings and Philadelphia 76ers) to agree to add a small 2.5-by-2.5-inch advertising patch to its uniform as part of a three-year trial beginning next season.
The NBA is the first of the big four professional leagues to allow ads on uni- forms. NBA commissioner Adam Silver has compared the move to the settling of the American West, calling it "manifest destiny" at 2016's All-Star Game.
Financial terms weren't disclosed, but reports put Boston's fee at about $7 mil- lion per season, near the upper end of the estimated $2 million to $10 million per- team range. Overall, the league hopes to raise $100 million to $150 million a year with jersey ads, split 50-50 between individual teams and a league-wide revenue-sharing pool. European soccer, where uniform ads are well established, dwarfs the NBA fees; Manchester United gets $80 million a year for the Chevrolet logo on its jersey.
USC professor David Carter, who heads the university's Sports Business Institute, predicts the other leagues will be watching the experiment closely and that in a few years the practice will be commonplace. The real dispute, he says, will be between leagues and their star players: "One of the areas of pushback may be from players promoting competing brands. You've got to make sure the players and the union realize that they are going to share in the revenue, and it's not going to be a drag on individual players' opportunity to make money from endorsements."