The Washington Capitals announced a sponsorship with Caesars Sportsbook just a month after the NHL approved of advertising patches on jerseys starting with the 2022-23 season. A few other teams have also secured deals, but for many teams, the sales of jersey advertisements has not gone as swiftly.
According to Sports Business Journal, Keith Wachtel, senior executive vice president and chief business officer for the NHL, said the league is pleased with the early results and that the 32 teams are on pace to generate “significantly more” than $100 million based on average fees thus far. “The revenue generation for the clubs that have secured sponsors has outperformed our expectations,” he said.
However, Wachtel doesn’t expect all 32 clubs to start the 2022-23 season with jersey patch partners. “Where the opportunity exists, our clubs are selling it for the right value proposition,” he said. “If for some reason they’re not seeing that in their market, they’re waiting.”
Several third-party sales executives representing NHL teams were less enthusiastic about market reception relative to their initial expectations. They said that while the most high-profile teams can expect to command upwards of $10 million a year, most will be mid-seven-figure deals.
Experts cited the crowded marketplace for sports uniform sponsorships as a hurdle for the NHL, which is not the only league launching such a program. Most MLB teams, which will begin wearing sponsor patches on their jerseys for the 2023 season, are also in the market for patch partners. So far, only the San Diego Padres have announced a deal, with Motorola. A handful of NBA teams are also seeking either renewals or new partners.
“There aren’t that many companies out there that have the flexibility to take an existing marketing budget and throw money at it like that,” said Dan Griffis, Oak View Group president of global partnerships.
Graphic: Sports Business Journal
The NHL board of governors unanimously voted to approve the ad policy, detailed in a memo emailed last August to all 32 teams. Clubs are free to start negotiating with potential partners, according to the memo, which was reviewed by Sportico.
The memo states that the ads must fit a rectangle 3 inches by 3.5 inches, making them slightly bigger than the patches that the NBA added to its jerseys for the 2017-18 season.
The NHL’s Jersey Advertising Program begins with the 2022-23 NHL season and allows up to two jersey sponsors per team when separate sponsors appear on home and away jerseys. The Capitals will announce an away jersey sponsor at a later date.
last season that NHL allowed its teams to sell ad space on their helmets, a move that opened new inventory for clubs to advertising add partners (or accommodate existing ones) amid the revenue crunch of the pandemic. Commissioner Gary Bettman said teams retained more than $100 million through that program, which has since been extended.
According to Sportico, the NBA’s recent patch program was estimated to boost revenues by $150 million annually. The individual team deals generally ranged from low seven figures to upwards of $20 million.
By Jon Sorensen