Court Sides With Liverpool In Lawsuit Over Kit Supply Contract

Nike will be new kit supplier beginning with the 2020/21 season.

Liverpool join Chelsea and Tottenham as top tier EPL clubs with Nike kits

MIAMI, Fla. (October 28, 2019) —

Liverpool FC have won a legal battle with Boston (MA)-based New Balance in the London Commercial Court and are now free to sign a new deal with Nike.

Pending an appeal by New Balance, it brings to an end the ongoing dispute surrounding which apparel provider would outfit the Premier League side’s kit from the 2020/21 season, which has been unclear since the start of the year.

Liverpool home shirt | Photo: Liverpool FC

Liverpool had made clear their intentions to switch to Nike once their partnership with New Balance, which dates back to the 2015/16 season, expired and had held extensive talks with the brand. The club rejected New Balance’s offer of a matching clause proposed for the existing contract over the summer.

New Balance took the European Champions to court over their alleged refusal to honour a £45m-a-year deal (€50.9, $55.9 million), which expires in May 2020. They alleged that under the terms, the footwear firm is entitled to renew its sponsorship if it matches any competitor’s offer, and that Liverpool had breached the contract by not renewing the contract.

New Balance World Headquarters in Boston, MA

Opening the firm’s case last week, Daniel Oudkerk QC said the key issue was whether New Balance had matched “the material, measurable and matchable terms of a third-party offer.”

Liverpool countered that New Balance had not matched Nike’s offer, which includes a commitment to sell licensed products in at least “6,000 stores worldwide, 500 of which shall be Nike-owned”. Guy Morpuss QC, the lawyer representing the Premier League club, set out to show New Balance’s claim it could distribute the club’s kit to 40,000 stores was “a myth”, and that the company had “grossly overstated” the number of stores to which it could distribute. Moreover, Liverpool argued that Nike could deliver far greater total revenue than New Balance could, reflected by Nike reportedly agreeing to pay the Reds a 20 percent royalty on net sales of Liverpool products.

Nike reportedly agreed to pay the club UK£30 million (US$36 million) per year, compared to the UK£45 million (US$58 million) New Balance currently pays. However, it would also promote the team through other high-profile athletes and influencers, including tennis legend Serena Williams, basketball star LeBron James and the musician Drake. Nike would also distribute the new kit through an estimated 6,000 global stores, compared to New Balance’s 3,000.

Chris Davis, New Balance vice-president of global marketing and sports marketing, and Kenny McCallum, New Balance general manager of global football, were both cross-examined extensively during Friday’s proceedings.

Davis’ testimony Testifying in court basically admitted that the company had made “errors” on the number of retail outlets initially planned.

Liverpool’s legal team argued that this was evidence New Balance was unable to match the terms offered by Nike. New Balance would have to double their number of stores, especially in the Far East, where their actual outlets were much lower than planned. Other evidence presented by the club’s barristers was the fact that a large number of New Balance stores sold only the company’s footwear and not replica kits.

Giving his ruling in London, Mr. Justice Teare of the High Court ruled in Liverpool’s favour, finding that “the New Balance offer on marketing was less favourable to Liverpool FC than the Nike offer.” A full written statement from the judge will follow but he told the court: “For the reasons given in the judgment handed down, the claim from New Balance is dismissed.”

In his ruling, Mr Justice Teare said: “Liverpool FC is not obliged to enter into a new agreement with New Balance.”

The court also heard that Liverpool spent more than £555,000 on the case, with 20% to be paid by New Balance.

Liverpool will now move ahead to finalise a five-year deal they have agreed to in principle with Nike, who have apparently already spent nearly UK£6 million (US$7.7 million) on kit design. Liverpool and Nike have worked together for the past two months. [The Reds claim Nike’s offer to them, which they apparently had accepted in principle in August, amounted to a legally binding obligation to contract with Nike.] The two sides have already agreed on designs for the replica kits and training kits for the 2020-21 campaign, while Nike have reserved factory space to manufacture 2.9 million units over the course of next season and have already invested more than $5.8 million in fabric.

While the possibility of an appeal of the court’s dismissal is possible, the relationship between New Balance and Liverpool is irretrievably damaged, and even if New Balance won on appeal, forcing Liverpool to work with them for another five years is not going to happen. The only question would be damages owed by Liverpool for breach of contract. A New Balance spokeswoman said the firm was disappointed, adding: “We believe strongly that we matched the competing offer and would have delivered many more years of record-breaking kit sales.”

Jordan Henderson and Mo Salah celebrate in Liverpool’s 2-1 victory over Tottenham at Anfield on Sat. Oct 26, 2019.

Inter Miami CF Select Heineken As Top Draught Pick; Announce Multiyear Sponsorship

Dutch brewing giant continues to invest in soccer and now has sponsorship agreements with 11 MLS clubs in addition to league-wide deal.

Club Internacional de Fútbol is positioned to become the first global team of Major League Soccer.


“We are proud to welcome Heineken as the founding partner of our growing Inter Miami CF family and look forward to making history together as we kick off our first season in MLS.”

Jurgen Mainka, Chief Business Officer, Inter Miami CF

Miami, Fla. (Monday, August 5, 2019) – Kenneth Russo

The teaser ad went live on last Friday on Inter Miami CF’s Instagram and Facebook accounts, complete with announcers speaking in a distinct Miami accent, asking the question, “What will Inter Miami CF do with their first “draught” pick?”

The promo was filmed last month right here in Miami, and, the theme was a nod to fans of more traditional “American” sports like American football and basketball, where there is always a buzz around what player gets selected with the first draft pick.

“The answer is that this pick might just be the best in the world and it’s used to doing well under the sun, which is so key here in Miami.” The ‘sportscasters’ also predicted that this pick was going to be European.

Who will be quenching our thirst for goals?

Who will play con el sabor this city deserves?

And correct they were.

Today, the club announced that Heineken will be the official beer of Inter Miami CF. The multi-year deal establishes Heineken as the first Founding Partner and Official Beer of Inter Miami CF, granting them signage, intellectual property rights, and retail activations. The brand will work closely with Inter Miami to continuosly elevate the fan experience in South Florida. The deal comes after Inter Miami appointed London-based KIN Partners in February as their exclusive sponsorship sales representation agency. As is the custom, no financial details about the partnership were made public. However deals like this customarily represent a multi-million dollar investment by the sponsor in the club over the term of the agreement.

At the announcement yesterday, at El Tucán in downtown Miami, the official commercial was shown for the first time. The is available on Inter Miami’s official website (www.intermiamicf.com) and on social media channels. It was filmed in July, 2019 at Toe Jam Backlot in Wynwood (Miami) and feature the club’s three official supporters groups, Southern Legion, Vice City 1896 and The Siege Supporters Club.

Present at yesterday’s announcement was Heineken’s Chief Marketing Officer, Jonnie Cahill, who said that Heieneken “could not wait” for Miami to join Major League Soccer. “After much anticipation and excitement around the return of MLS to South Florida, we are thrilled to play a role as Inter Miami CF’s first official partner, and look forward to celebrating many future firsts together,” Cahill said. “We are known worldwide as a devoted soccer brand, and through this partnership, we can’t wait to provide soccer fans across South Florida with the premium experience—and beer—they have come to expect from Heineken for years to come.” He went on to say that Heineken will be with the club every step of the way to make Inter Miami CF the most iconic club in MLS.

Inter Miami CF have established the Founding Partner level of partnership for partners who seek the highest levels of visibility, access to the team and experiences that can be customized to forge an unprecedented connection with Inter Miami CF fans throughout South Florida and beyond.

“Our goal at Inter Miami CF is to provide the best possible experience to our fans. With Heineken we have an excellent partner who not only shares our vision and passion for the sport but also understands the importance of being a community-first organization who engages directly with our core audience.”

“We have an excellent partner who not only shares our vision and passion for the sport but also understands the importance of being a community-first organisation who engages directly with our core audience.”

Jurgen Mainka, Chief Business Officer, Inter Miami CF

“Since 2014, Heineken has been an invaluable supporter of Major League Soccer and our clubs, so it is with great pride that we congratulate Heineken and Inter Miami CF on the announcement of their partnership,” said MLS Deputy Commissioner and President of MLS Business Ventures, Gary Stevenson. “Heineken has a deep history of forging authentic relationships with fans across the league through celebratory moments and numerous club partnerships. We look forward to working with both brands to engage fans in Southern Florida in innovative ways for many years to come.”

The agreement mark’s Heineken’s 14th club sponsorship in MLS, in addition to it’s league-wide partnership which is in the second year of a five-year extension signed in March 2018.

The Heineken’s Brouwery, Amsterdam, Netherlands
The Inter Miami supporters groups were featured in the creation of the commercial. Photo: Heineken
ReLATED

Real Madrid CF Will Not Seek Naming Rights For Estadio Bernabéu

Club will not seek naming rights partner for the revitalization of the Bernabéu Stadium; Has “great opportunities” in business without changing the name of the stadium.

Miami, Fla. (Thursday, July 25, 2019) – Kenneth Russo

What’s in a name? In the case of a famous one, a reason not to alter it.

One of the world’s most iconic football stadiums will not be adopting a corporate name. This news came from Real Madrid Club de Fútbol’s Global Head of Partnerships, David Hopkinson.

As reported in Spanish publication ReasonWby.Es, Hopkinson had been interviewed and asked about this ahead of the World Football Summit 2019. It was believed that Real Madrid would seek a stadium naming rights partner. He commented, “Anything is possible, but to put a corporate name on the stadium probably would be incorrect. There are places around the world that are iconic and must be respected.” (“Hay lugares en todo el mundo que son icónicos y deben respetarse”) He also added that Real Madrid enjoys an extraordinary assortment of income-generating opportunities that do not involve adopting a corporate name for the home of Los Blancos.

“Hay lugares en todo el mundo que son icónicos y deben respetarse”

While the stadium’s name is not changing, many aspects of the stadium will be. The club is planning a complete transformation of the Estadio Santiago Bernabéu, which is expected to take until 2023 to finish.

Madrid’s ambitious plans for a “digital stadium of the future,” were made possible after securing loans totalling €575 million (£497 million/$641 million USD) in April, 2018 from two US-based financial institutions: Bank of America Merrill Lynch and JP Morgan. They will start repaying the loans in 2023 at a fixed 2.5 percent interest rate through 2049. The club will service an annual debt of €29.5 million per year on the project throughout the period.

Hopkinson, a Canadian, (and graduate of McGill University) was hired in summer of 2018, after having worked with Maple Leaf Sports and Entertainment (MLSE), where he was the Chief Commercial Officer. MLSE is the parent company of Toronto Football Club (MLS), the Toronto Maple Leafs (NHL) and Toronto Raptors (NBA). Explaining the overall business strategy of Real Madrid, Hopkinson said that Real Madrid believes the more it is able to internationalise its business, reputation, and fan base, in the process making the club a global enterprise, the more opportunities the club will have with sponsors around the world.

“Cuanto más podamos internacionalizar nuestro negocio, nuestra reputación, nuestra base de fans, para globalizar este negocio, más oportunidades tendremos con patrocinios en todo el mundo”, detalló.

La renovación incluirá un techo retráctil, nuevos servicios y experiencias diseñadas para los fanáticos, que aprovecharán las posibilidades de lo digital.

The renovation will include a retractable roof, new services and experiences designed for fans, taking advantage of the latest in digital stadium technology.

While a football club can expect millions of dollars to have a corporate name on its stadium, in the case of Real Madrid CF, Hopkinson believes the benefit of not changing outweighs the increased revenue. Reaching that conclusion was probably also made easier by the fact that Real Madrid was looking for a naming rights sponsor but actually had difficulty attracting one. Potential sponsors were cautious to invest given the status of the stadium as one of the most famous in the world. It was thought, and altogether realistic to believe, that people would still refer to the stadium as the Estadio Santiago Bernabéu no matter what corporation sponsored the venue.

Video: Real Madrid CF

ReasonWhy.es: El Real Madrid no busca un nombre comercial para el estadio Santiago Bernabéu

Sports Pro Media: Oct. 2018: Réal Madrid Struggle For Naming Rights Deal


Photo Gallery (credit: Real Madrid CF)

Major League Soccer Enacts Changes To Sponsorship Guidelines To Allow Gaming And Alcohol Sponsors.

By Kenneth Russo, June 26, 2019 –

In a major policy shift, Major League Soccer enacted changes to its commercial sponsorship guidelines. Under the changes adopted, the 26 clubs will be allowed to contract for shirt and stadium naming rights sponsorships with sports betting and liquor companies. Both of these types of entities can now be prominently displayed on the shirts of MLS clubs and also be considered as potential stadium naming rights sponsors. The sponsorship policy changes take effect immediately.

It is customary across the globe to have shirts and kits (uniforms) with corporate sponsors. In North America, the only sport outside of soccer to have any form of corporate uniform sponsorship is the NBA. The basketball league began sponsorship patches on the front of its teams’ uniforms in 2017, and the program has been regarded as a success for the teams.

Up until this past Wednesday, MLS Clubs were prohibited from doing business with gambling and spirits brands. However, beer and wine companies were not on the list of prohibited sponsors, and from a policy standpoint, the arbitrary line drawn on alcohol-related sponsors was likely hard to rationalise. However, allowing sponsorships from gambling companies represents a major policy shift, and a position very different from the other North American Professional sports leagues, who have gone out of their way over the years to disassociate themselves from sports wagering. (For years Las Vegas was even off limits as a potential home to a professional sports franchise due to its connections with legalised gambling.)

What is behind these changes? MLS views itself as an innovative, creative league. “We want to be viewed as a progressive league, and provide our clubs with an appropriate level of flexibility,” Carter Ladd, the league’s senior Vice President of Business Development, was quoted as saying. “We don’t want to be restrictive; we want to enable them in a positive way, and that’s why we’re taking this action… We strongly believe this is going to help drive new revenues.”

Activating sponsorship agreements with gambling and alcohol companies does have it challenges and sensitive points, in particular, marketing such products to children or the perception of same. For that reason, the revised guidelines have certain restrictions. MLS is taking steps to ensure all advertising by such sponsors is directed toward an “age-appropriate audience,” it said. For example, youth-sized replica shirts will not be allowed to have such sponsors; neither will the shirts of uniforms worn by clubs’ academy and youth players. Additionally, MLS will also restrict players under the age of 21 from appearing in any alcohol-related advertising or digital content, and no players are allowed to appear in sports betting-related marketing.

Ladd told Fortune Magazine recently that the league feels it is “uniquely positioned in the North American sports landscape” to benefit from changing attitudes – particularly toward sports gambling, which he noted has long “been embraced as part of the fabric of the game” in other countries.

Furthermore in May 2018, the United States Supreme Court in Murphy v. National Collegiate Athletic Association, 584 U.S. ____ (2018) overturned the federal ban on sports betting. Since then, 15 states and the District of Columbia have now authorised betting in some form, according to the American Gaming Association.

The sports betting market represents a two-pronged opportunity for MLS: as a revenue generator and as a fan engagement tool. The sports betting market is really in its infancy in the U.S., and MLS wants to be on the forefront of the potential creates. In March 2019, the league announced a multi-year deal with MGM Resorts that made MGM its first “official gaming partner,” The new MLS regulations make it easier for its teams to reach similar deals of their own.

It should be noted that MLS clubs will still be subject to their own states’ laws governing sports gambling. Another issue is the fact that sports betting is not legal in Canada, and this potentially complicates matters for the three Canada-based MLS clubs, including raising the question of whether a Canadian MLS team could have an American-based gambling sponsor.

For a list of the permissible types of activities the league’s new rules will allow, please link to: russo law and soccer: mls-sponsorship-guidelines/

One of the most distinctive activities that will be allowed by these rules changes is that MLS clubs are now allowed to establish in-stadium sports betting facilities, in connection with licensed gambling operators, in jurisdictions that permit such establishments. Washington, D.C. is one such place. Ted Leonsis, who owns the NBA’s Washington Wizards and the NHL’s Washington Capitals, plans to open such a facility within Capital One Arena, the downtown venue shared by both of his teams.

“Right now, we want to take advantage of the widespread legalization of sports betting in the U.S.,” Ladd said, adding that the league will “pursue best practices to protect the integrity of the game.”

Asked about MLS’s more accommodating stance toward spirits, Ladd pointed to data indicating that Americans’ tastes are drifting more toward liquor, which has steadily been taking market share from beer and wine. “Part of what drove our thinking is the research we did on where the [alcohol] industry is going,” he said. “As social mores change, there’s less of a line between beer and wine, and spirits.

MLS already has a league-wide sponsorship agreement in place with Heineken Beer. Ladd opined he anticipates the league’s new guidelines to “double, if not triple our revenues” from spirits sponsors, which he currently placed in the “seven-figure range.”

We should expect MLS clubs to start announcing new sports betting and liquor sponsorships before the end of this year.

Inter Miami CF Enters Into Agreement with KIN

KIN Partners will be the exclusive sponsorship sales representation agency.

Miami, FL (Tuesday, February 5, 2019) by Kenneth Russo –

Club Internacional de Fútbol Miami (“Inter Miami CF”) continues to make impressive steps in its development, now with slightly more than one year before it kicks off play in North America’s Major League Soccer.

The club announced on February 1, 2019, that it has entered into a contract with the London-based firm, which is headed up by industry veterans Simon Oliveira and Matthew Kay, KIN recently expanded into Miami and Oliveira, the Managing Director of KIN, has previously worked on Beckham’s other business projects. Among KIN’s roster of international clients is Neymar, Jr.

KIN’s role will be to identify and develop sponsorship opportunities for the expansion club.

“Miami is recognised as a global city with a mix of wonderful cultures and we cannot wait to start working with both the vastly impressive ownership group and one of the most exciting properties in world sports today,” said Matthew Kay.

The announcement comes within days after Inter Miami put forward plans to build a training facility, including a multi-purpose stadium, on the site of the Lockhart Stadium, previously used by the now defunct North American Soccer League’s (NASL) Fort Lauderdale Strikers.

Given the transformational aspect of Miami Freedom Park, partnering with an international agency appears to be a smart move. Interest in Inter Miami CF has been high, and the home of the team, in addition to a 25,000 seat stadium, a public park and public soccer fields, will feature hotel, entertainment and retail space as well as a technology hub. It is a US$1 billion complex that will create thousands of jobs and generate millions of dollars in tax revenue to the city, county, state and school board.

© 2019 Russo Law & Soccer

Training Gear Sponsorships Working Out for MLS

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.

New York City Football Club training kit sponsor New York Presbyterian Hospital

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.

76 is also the presenting partner of the Houston Dynamo.

“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/

See Also – https://www.sportsbusinessdaily.com/Journal/Issues/2018/03/05/Marketing-and-Sponsorship/MLS-kit-deals.aspx


© 2019 Russo Law & Soccer

New Source of Revenue Coming to MLS in 2020

MLS mirroring the trend in other leagues around the world.


Miami, FL (Wednesday, January 23, 2019) by Kenneth Russo –

Major European leagues have it. The trend has been adopted in North America by the NBA. And now, your local Major League Soccer club will have a new look with the 2020 season.

In an announcement last October 23, 2018, the league approved clubs to add a sponsored sleeve patch on team uniforms. In addition to the sponsor on the front of a kit (jersey), clubs will be able to place a second sponsor on the right sleeve of the game shirt. The league’s badge will remain on the left sleeve, tailored to match the club colours.

The size of the sponsored sleeve patch will replace and be roughly the same size as the existing MLS logo on the right jersey sleeve, which is roughly 2.5 by 2.5 inches (6.35 x 6.35 cm).

The league badge will remain on the left side.

The league will allow clubs to create their own sales strategies. Clubs can also decide whether the sleeve sponsor patch will be sold on shirts sold at retail. There are currently restrictions on some categories, such as alcohol and gambling, but those are under review by the league. There are also restrictions aimed at providing protection for some current league partners. For example, Nike cannot negotiate a sleeve sponsor deal, as the league has an apparel supplier contract with Adidas to supply all uniforms. (see Official Apparel Supplier) Securing a sleeve sponsor is also only available to those clubs that have already secured a primary kit sponsor.

The sleeve sponsor initiative will be for a four-year term to begin with, though given the additional revenue it will generate (Sleeve Sponsorships), I foresee the program being extended.

“The sleeve patch is a premium opportunity for brands to be connected with our League and clubs in mutually beneficial ways,” said Gary Stevenson, president and managing director, MLS Business Ventures. “As our League continues to expand, and with more fans in the U.S. and Canada viewing our matches, attending our games, and engaging on social media, the visibility of the sleeve patches will be substantial.”

Creating space for additional corporate sponsors is a growing trend that has only recently been embraced by some North American sports leagues.

Last season (2017-18), the NBA allowed jersey ads for the first time, and now all but three of the league’s 30 teams have sold the space, driving a wide range of revenue. The defending champion Golden State Warriors have a three-year, $60 million USD deal with Japanese e-commerce giant Rakuten, Inc., also the kit sponsors of FC Barcelona, while the Utah Jazz have a deal with Qualtrics LLC’s cancer charity for $4 million USD per year. The Miami Heat have a sponsor patch deal with Weston, FL based Ultimate Software. Heat partner with Ultimate Software

The basketball league’s 21 patch deals in place last season generated $493 million worth of media awareness, according to valuation firm GumGum Sports. According to Forbes and GumGum Sports, the 2.5 by 2.5-inch patches are generating over $350 million worth of value just through exposure on social media (75 percent of the value), with 25 percent of value coming from TV broadcasts.. The only other signage in the NBA that generates that much revenue is the Nike logo stitched on NBA jerseys.

Many sponsorship deals for the NBA patches started as low as $5 million over three years, yielding a return on investment of 70 percent for the sponsors. Others have paid between $20–60 million for these sponsorship spaces and still see an ROI of over 5 percent. In contrast, the NFL, NHL, and MLB have all resisted the trend, thus far.


Related:

Bloomberg article – 2018-10-24/major-league-soccer-lets-teams-sell-more-ad-space-on-jerseys