Sunday, March 23, 2014

Professional sports in the US missing out on cash

The sports business is all about money. We all know it. In most of the cases, the more money you have, the better you do in sports. Of course you have to be able to do the right things and make good decisions, but, money helps.

So how come most sports in the United States are not really making use of every possible way to maximize cashflow? And how could they do so?!

The answer is simple: Sponsoring!

Across the world and in sports other than the ones considered "American", such as american football and basketball, Managers of teams make great use of sponsoring. For the simple reason that both sides profit from it. It would be wrong to say that the NFL and NBA teams do not make use of sponsorship at all, but it seems like especially these two leagues miss out on using the jerseys, and trough the jerseys the players and the franchises as marketing tool.

Surely the arenas, domes and fields are branded most of the times and there are banner ads running up and down the court. But the center of attention is and will always be on the players and the game.

Internationally, especially in soccer in Europe, both businesses and teams are well aware of this and new million dollar deals are being signed each year for the benefit of both businesses and sports teams.

Therefore it will be inevitable to make use of "jersey-sponsorship" in the NFL, NBA, NHL and other leagues to stay competitive in the long term. While the leagues benefit as a whole, it is especially the sponsor, the economy and subsequently the consumer that would benefit from this step. Through advertising on player jerseys the consumers interaction with the brand is much more personal. Or other way round, if the consumer already identifies with the brand, he might be likely to identify more with the team, player, or another brand associated with the franchise.


From personal experience, the soccer club and Champions League (the biggest trophy in european soccer) cup winner of 2013, FC Bayern Munich is a perfect example of successful and reliable long term sponsoring. Sponsors include Adidas, Allianz insurance, Telekom (T-mobile), Audi and many more highly regarded brands. By signing contracts with these businesses over the years the soccer club not only became more prosperous but also gained international recognition for being able to tie internationally successful businesses to the franchise.

Currently the American leagues are avoiding the jersey sponsorship due to critics saying that the sport's primary goal is to commercialize, but what is wrong with that.
Society has to face the truth. Money is one of the keys to success in modern lives. And certainly the games are not going to lose any quality or seriousness because the players cars or whatever have some brand logos on them. In my opinion the extra commercial breaks that will make up for the money not being made from jersey sponsorship will destroy the games and subsequently the sport.

Who knows, in ten years we might watch a Football game for 8hrs, just because every review and timeout will be turned into a media timeout with commercials.

For more information on the topic, here an interview with the NBA commissioner Adam Silver :

http://adage.com/article/news/nba-commissioner-ads-player-jerseys-inevitable/292229/

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