The NBA announced Friday that the board of governors has approved a three-year pilot program to allow teams to sell a corporate logo on their jerseys.
Teams can now start pitching companies on buying a 2.5-inch-by-2.5-inch space as the NBA becomes the first of the four major U.S. sports leagues to put ads on regular game-day jerseys.
The first season of the program will be in 2017-18, which will also be the first season that Nike makes the NBA’s uniforms after taking over from Adidas. The Adidas logo is not currently on game jerseys.
“It’s my hope, independent of whatever additional revenues are generated through this patch program, that the greatest impact will be in this amplifying effect of companies choosing to associate directly with a team jersey, then going out and promoting that relationship to the largest market,” NBA commissioner Adam Silver said.
Silver said the league had calculated that the program will be worth about $100 million a year. It’s a small opportunity relative to the league’s overall revenues, which Silver said are projected to be $7 billion in the 2017-18 season.
Silver said Friday that the Nike swoosh will appear on every jersey for 29 of the league’s teams, but that the Charlotte Hornets will likely have the logo of the Nike-owned subsidiary Brand Jordan because the team is owned by Michael Jordan.
The money will be counted as basketball-related income and, therefore, split with the players. What isn’t yet clear is how a team will resolve a conflict if a company buying a patch is a competitor of a company that endorses that team’s star player.
Silver said that the NBA must also have conversations with its TV partners, ESPN and Turner, as well as the league’s top sponsors, based on who the jersey ad sponsors turn out to be.
Silver said there is “enormous uncertainty” around the patch program, which is one reason the initial idea is to restrict sales to a three-year period. The plan is also facing some backlash from fans who want to see the jerseys remain commercial-free.
“There’s a reason this is a pilot program,” Silver said. “We listen very closely to our fans.”
As a compromise, jerseys sold to fans will not include the corporate logo, although teams will have the option of selling a version that includes the logo.
Silver does, however, say he believes that having logos on jerseys makes more sense today than it did even five years ago, when the idea of selling the spot was broached.
“The media landscape is changing,” Silver said. “People are watching less live television outside of sports. People are watching fewer commercials. This will become an important opportunity for companies for connecting directly with their consumers.”