NBA owners are reportedly expected to approve the placement of ads on team jerseys, a move that could open a whole new revenue stream for major U.S. sports.
Owners will vote on the proposal this week, and the measure should pass, sources told ESPN. If so, ads could appear on basketball jerseys at the start of the 2017-2018 season.
The ads, according to ESPN, would be located in a 2.5-by-2.5-inch patch on the left shoulder of jerseys. Half the revenues generated from the sponsorship money made from jersey ads would go to the team, while the other half would be added to the league’s revenue-sharing pool for all teams.
The approval of putting corporate logos on NBA jerseys has been pushed by none other than NBA commissioner Adam Silver himself. At this year’s All-Star Game, Kia sponsored a similar patch with its logo on player jerseys, and is set to repeat that in next year’s game, according to the Wall Street Journal.
“It’s manifest destiny,” Silver told ESPN. “One of the reasons we want to do it is that it creates an additional investment in those companies in the league.”
While a common occurrence in European major league sports like soccer, the NBA was the first of the four major professional sport leagues—Major League Baseball, the National Hockey League and the National Football League included—to put ads on its jerseys.
Adopting such a move would open the door to a huge boost in sponsorship money for the NBA, and possibly sports in general. In PricewaterhouseCooper’s look at the current professional sports market, revenues from sponsorship was expected to grow at a compounded annual rate of nearly 5% from 2014 to 2018, which would exceed the growth pace from gate revenues, the traditional revenue stream for sports teams.