Using a computer formula, Horizon Media concluded that, based on “detection opportunities,” the big four American sports leagues surrender $370 million per year by not selling the ad space available on the front of their jerseys. That may be what it’s worth, but not what it’s selling for. Viewing the market in sports that do sell that space, I would suspect it’s substantially more.
The formula places the NHL’s annual exposure value at $8.17 million. It’s probably less, but, for the sake of the argument, let’s say MLS is around $8 million. The market pays significantly more than that.
Here are the lowball figures for MLS jersey front sponsorships. There are 12 teams that have deals in place. The figures are per year.
D.C. United (Volkswagen – $3.1 million)
Houston Dynamo (Amigo Energy – $2.5 million)
Los Angeles Galaxy (Herbalife – $3.5 million)
Philadelphia Union (Bimbo – $3 million)
Real Salt Lake (Xango – $4 million)
San Jose Earthquakes (Amway – $2 million)
Seattle Sounders (Xbox – $3.2 million)
Toronto (BMO – $4 million)
New York Red Bulls (Owned by Red Bulls)
Chivas USA (Corona – not yet disclosed)
Portland Timbers (Alaska Airlines – not yet disclosed)
Vancouver Whitecaps (Bell – not yet disclosed)
If MLS’ estimate was $8 million, the league has more than tripled that, using figures from only the eight teams with disclosed deals. This is in MLS, which gets 10,000 fans per game in some markets and has lower ratings than the WNBA.
How much would an elite American sports franchise bring? Check out their peers in Europe. Here are the deals for the four soccer clubs on Forbes’ Top 25 list. Twenty of the 25 on that list are NFL teams.
Manchester United (Aon – $32.1 million)
Real Madrid (bwin – $20.4 million)
Arsenal (Emirates – $10.7 million)
Barcelona (Qatar Foundation – $40.1 million)
Those are no trifling sums, and the numbers are increasing despite the poor economy. Arsenal thought they scored a coup, signing a 15-year $160 million deal with Emirates in 2004. Now, that’s less the payment they could get. LA Galaxy signed a massive deal with Herbalife upon David Beckham’s arrival in 2007. In 2011, their income from jersey sponsorship is on par with their MLS peers.
The NFL is the largest sporting league in the world. Let’s be conservative and say NFL teams would average $15 million per season. That’s an extra $480 million in revenue. The first Sunday would be kind of awkward. Columnists would be outraged, but how long would fan resentment last? An NFL game is already a three and a half hour commercial. Nearly everything visible or audible has a sponsor affiliated with it. Why is the jersey sacrosanct? Maybe the NFL makes enough money to forswear it, but the NBA or MLB couldn’t use an extra $5 to $10 million per team?
[Photo via Getty]