MLB’s Big Decision Regarding Helmet and Jersey Sponsorship
Now that we have more specifics regarding the new on-uniform branding opportunities with MLB teams, sports marketers naturally will be on the lookout to see which franchises and brands are first to close deals and, of course, at what valuation.
But industry professionals should pay just as much attention to how MLB handles one particular aspect related to the new inventory: addressing the potential conflict between league and team partners.
The issue is relevant because unlike the NBA and NHL, the league itself will sell sponsor ID on batting helmets, one of two new assets along with 4x4 sleeve patches (which will be sold by the teams). The helmet decals could appear as soon as the postseason this fall, with jersey patches debuting at the start of the 2023 regular season.
That approach makes things much more complex than turning the helmet inventory over to the teams. MLB chief revenue officer Noah Garden alluded to that fact when he told Sports Business Journal that “There are still some issues to tackle,” regarding potential conflicts between league and team sponsors.
To ensure that teams, the league and sponsors are all happy with the outcome, the final arrangement will need to accommodate brands’ need for some degree of exclusivity while optimizing revenue for the league and its franchises.
The easiest path would be for MLB to sell helmet ID in a category not already filled at the team level. While it would be challenging to identify such a sector, it is not impossible given the interest in sponsorship by so many emerging industries. (The league has said it will not allow helmet or jersey ID to be sold to alcohol, betting or media companies.)
In the case of a new category, if the league wanted to ensure exclusivity for the sponsor, it could develop a revenue-share plan with the teams that would compensate them for taking the category off the table for local deals.
The web could be more tangled in the case of existing sponsor categories, depending on how much, if any, exclusivity the helmet sponsor requires. In many instances, it may not be an issue, similar to any brand that enters a league deal knowing that it does not have rights at the team level and that its competitors may purchase or already have those rights.
Where things get really interesting is what to do in the face of a potential category conflict between the league’s helmet sponsor and a team’s jersey sponsor, since it’s a fair assumption that two competitors won’t want to be in such close proximity to each other. That would appear to be the biggest issue MLB needs to tackle.
With both the league and teams already negotiating deals, getting a plan in place should be a high priority for MLB.
Although finding a solution that everyone will be happy with won’t be easy, it will no doubt be worth it to avoid the type of conflict the industry witnessed 15 years ago when NASCAR, AT&T and Richard Childress Racing fought a nasty court battle over the telecommunications company’s team sponsorship infringing on the rights of then top series sponsor Nextel.