MLB Sponsor Revenue Hits $1.2B Ahead of Jersey Patch Boom

Major League Baseball and its 30 teams generated an estimated $1.19 billion in sponsorship revenue during the 2022 season, according to consultancy IEG and its Sponsorship Intelligence Database. The tally is up 6% from last year, but a major spike is coming with the introduction of sponsor logos on jerseys next season.

“The jersey patch is going to take baseball to a new level of sponsorship,” Peter Laatz, IEG’s global managing director, said in a video interview. “The best way to increase revenue is to define a new asset, find new real estate.”

More from Sportico.com

In March, MLB and the players association approved jersey advertising while renegotiating the collective bargaining agreement. The patches can be up to four-by-four inches and will appear on the uniform sleeve.

The San Diego Padres were the first team to pull the trigger, signing Motorola to a multiyear deal worth up to $10 million annually. The Boston Red Sox and Mass Mutual reached a 10-year agreement that could be worth twice as much per year. Expect a flurry of deals to be announced ahead of the 2023 season. Legends is shopping what is expected to be the most lucrative club asset: the iconic uniform of the New York Yankees.

A smaller Nike Swoosh was added to uniforms in 2020, but the 118th World Series—starting Friday—will likely be the last Fall Classic without any larger logos on jerseys.

Ballpark naming rights have traditionally been the biggest sponsorship asset for MLB teams. They are cumulatively worth more than $100 million a year, but the jersey deals will top those in many cases, particularly if big-market clubs playing in non-branded stadiums, like the Yankees, Los Angeles Dodgers and Chicago Cubs, join the Red Sox with jersey deals. “Player branding is usually recalled better in any kind of environment when you query consumers,” Laatz said. “It is thought to be more authentic and memorable.”

The NBA had a 30% jump in annual sponsorship revenue when it introduced its patch program for the 2017-18 season, and the Golden State Warriors and Los Angeles Lakers have inked deals worth at least $20 million annually. Laatz thinks MLB patches offer more impact for sponsors, beyond just a season that is twice as long. “Baseball’s pace of play creates longer focus on players,” Laatz said. “How the game is shot is going to guarantee those sponsors more visibility than the NBA.”

IEG uncovered 950 brands that contributed to MLB’s $1.19 billion in sponsorship revenue. That dollar total ranks third behind the NFL’s $1.8 billion and $1.64 billion for the NBA. These estimates are for sponsorship rights fees for the leagues, teams and venues. They do not include spending on activation or media, and player endorsements are also excluded. IEG says its numbers represent the low end of the possible range, and, in fact, MLB contents that sponsorship revenue for its teams, stadiums and the league is $1.6 billion.

Banks, beer and insurance continue to be the three largest categories for MLB sponsorships, and brands in those industries spent nearly $300 million combined this season. Anheuser-Busch InBev, T-Mobile, Nike, Coca-Cola and PepsiCo spent the most in 2022 among individual companies. IEG estimates that crypto brands spent $22 million on their MLB rights fees in 2022, but that market has cooled dramatically.

Pep Boys jumped into baseball this year and partnered with nine teams for the 2022 season. Amtrak, Craftsman Tools, John Deere and Pennington Seed also signed deals with at least four clubs starting this season.

MLB added league-level partnerships this year with Adobe, Capital One, Corona, Cue Health, Dairy Queen, Distill Brands and Mattress Firm, but the agreement that garnered the most attention popped up this month when Charlotte’s Web became baseball’s official CBD partner for the 2022 playoffs and the next three seasons overall. It was the first deal by one of the five major US sports leagues with a CBD company.

Best of Sportico.com

Click here to read the full article.

Leave a Comment

Your email address will not be published.