Miami, FL (Thursday, January 24, 2019) Kenneth Russo –
Beginning in 2014, Major League Soccer began allowing clubs to sell a separate sponsorship for their training gear. Beginning with the Portland Timbers, followed by the New York Red Bulls, as of 2018, five MLS clubs out of the then 23 (Cincinnati is the 24th club and will enter the league in 2019) had negotiated and signed separate training gear sponsorship agreements.
Traditionally, teams in Major League Soccer and other football leagues around the world signed a kit sponsorship deal with one primary partner. Training kit sponsorships separate out the primary kit sponsor from apparel such as training and warm up gear. The practice has become widespread in European leagues, and the leagues executives noticed.
This separation of sponsorships represents a significant source of revenue for MLS clubs. Though financial details of such deals are not released by the league, it is estimated that a training gear sponsorship can fall into the high six-figure to low seven-figure of revenue annually.
The Portland Timbers were the first MLS club to sign a training kit sponsor, partnering with a local bank named Simple in December, 2014. In 2018, the club entered into a multiyear training kit sponsorship deal with Portland-based contact lens subscription service Sightbox. As part of the agreement, The Timbers and Sightbox will collaborate on a number of community outreach activities. Sightbox will also be prominently displayed at Providence Park, and serve as the presenting partner of the player, coach and staff game day entrance, the Providence Park box office and each individual MLS season.
The Timbers’ new training kit deal followed the club’s signing of a multiyear extension with kit sponsor Alaska Airlines, which has been with the team since it moved up to MLS in 2011. As part of the terms of the extension, Alaska Airlines agreed to permit the Timbers to carve out the training kit rights from its deal. Indeed, it is the ability to unbundle these assets that makes it attractive to clubs.
“Each team has their own situation. If a club is able to bundle everything together and maximize it that way and feels that’s the best approach — great,” said Mike Golub, Timbers President of Business. “For us, this gives us a way to maximize the value of the assets, but also extend our family of partners and increase activation.”
While Golub declined to comment on the financial value of the training kit deal, he did say that combined, they rank in the top tier of revenue deals across the league when compared to other teams. For a smaller market like Portland that matters. “It is material, and while I don’t think anyone will make the case they’re worth as much as the [game] kit sponsorship, there is a high level of value with the amount of exposure you’re able to get in practice every day,” he added.
The New York Red Bulls, who became the second team in MLS to sign a training kit sponsor in 2015, have already renewed the club’s deal with Japanese heavy equipment manufacturer Yanmar. The Japanese company is also a main partner company of J. League’s Cerezo Osaka Football Club. https://www.yanmar.com/global/about/sports/soccer/sponsored/redbull/
The new multiyear deal constitutes’s the Red Bulls largest sponsorship. Yanmar is provided with branding on both sleeves of the club’s training and warmup gear. It is estimated by industry sources that the previous deal stood at more than seven figures annually, and Red Bulls general manager Marc De Grandpre said the sponsorship renewal with Yanmar is an increase over the previous one.
For clubs like the Red Bulls who do not have a stadium naming-rights partner, gaining the most from all marketable assets is critical. In addition to not haveing a stadium naming rights deal in place, the club is owned by Red Bull, who has its corporate logo on the front of the game kits. De Grandpre added that “between coverage of training, the pregame and interviews that are done for national television, it might be our number one earned media driver — it’s a tremendous asset for the club to leverage.”
Their rival in the actual city, New York City Football Club, is among the teams with separate game-day jersey and training kit sponsors, having inked a multiyear deal with New York Presbyterian Hospital in 2015.
In 2017, the Houston Dynamo carved out its training kit sponsorship from its deal with natural resource company BHP Billiton, and signed a multiyear deal with gasoline company 76. That sponsorship with BHP Billiton later ended, leaving Dynamo without a jersey sponsor during the 2018 season, up until this past November, when the club signed with MD Anderson Cancer Center in a multiyear partnership. Chief Revenue Officer Steven Powell said Houston intends to keep the sponsorships separate going forward. In addition to the training gear sponsorship, 76 is also the season presenting sponsor of the club and has entitlement of one of the stadium’s gates.
“The training kit sponsorship is a high-profile asset that has a really impactful brand integration and brand association,” Powell said. “With the right partner who builds a platform around the assets, I don’t think it dilutes the value of a jersey or naming-rights partner.”
Columbus Crew joined the list of teams with a training kit sponsor in 2018. The original club in MLS signed a deal with Ohio Health. https://www.massivereport.com/2018/1/24/16928038/columbus-crew-sc-reveal-new-training-kit-sponsor-mls-2018
What does the future hold for training gear sponsorships in MLS? The Red Bulls’ De Grandpre believes that in the next few years the bulk of MLS clubs will find a partner in the training kit category. “There’s tremendous value for all the clubs here, both in terms of activation and significant dollars where the sum of the parts can be greater if the club manages it properly,” he said.
Given the numbers involved, there’s certainly no reason to think that prognostication is incorrect. For more on these sponsorships, follow here: https://kennethrusso.com/training-gear-sponsorships/