A new marriage between the swoosh and the swish could set off a run of corporations posting up on NBA team jerseys. The NBA and Nike announced late Wednesday afternoon that the two companies had signed an eight-year marketing partnership that would make Nike the official provider of all on-court apparel for the NBA, the WNBC, the NBA Development League and USA Basketball. Financial terms were not disclosed.
“This partnership with NIKE represents a new paradigm in the structure of our global merchandising business,” NBA Commissioner Adam Silver said in a statement published Wednesday.
The partnership also ushers the NBA into a place Silver suggested it would take years for his league to get to. Starting with the 2017-18 season, Nike’s swoosh logo will appear on all NBA apparel, making it the first time a corporate logo will appear on professional basketball’s top jerseys during the regular season. Previous partner logos have appeared on jerseys during the NBA All-Star Game.
While corporate logos on professional team jerseys are a given in most of the sports world, American leagues have mostly resisted the temptation to add corporate sponsors to their jerseys. And they have done just fine; the NBA and its 30 franchises hauled in nearly $680 million in sponsorship revenue last season, according to IEG.
But the reality is that jersey sponsorships may have grown too lucrative to pass up. The automaker Chevy recently paid $560 million for the right to display its logo on Manchester United jerseys for seven years, and the Yokohama Rubber Company signed a similar five year, $330 million deal with Chelsea F.C. NBA franchises don’t yet have the global cachet of those top English Premier League teams, the game’s growing international profile suggests one day it could get there.
While executives have said that adding individual corporate logos to team jerseys would dilute the value of a leaguewide apparel partnership, even a handful of deals like the one Chevy signed could dwarf an apparel contract; The NBA’s current apparel deal with Adidas, netted some the league $400 million over 11 years.
“Nike is buying into Adam Silver's leadership and vision for the league moving forward,” said Peter Farnsworth, the founder of sports consultancy Fox Rock Partners.
It is also buying into the league’s growing popularity abroad. Both the NBA and Nike have been cultivating Chinese interest in basketball for decades, and the time may be right for a company like Nike to begin reaping serious rewards. There are now 300 million people playing basketball in China, according to the Chinese Basketball Association, and Nike routinely sends top players like Lebron James and Kobe Bryant to the country on promotional tours. “China is a huge driver of this deal,” Farnsworth said.
Adidas will be looking to leverage Chinese attention in the final year of its deal as well. A number of jerseys that will hit the court next season have an aesthetic sensibility very similar to the one found on Chinese Basketball Association jerseys, which are chock full of ads.