September 30, 2022

Imageglee

Sports Really Satisfies

MLB teams shop for patch deals, but league insists program is incomplete

MLB patches offer exponentially more on-camera exposure than those in other stick-and-ball sportsGetty Images

Despite the addition of advertising patches on all MLB uniforms being one of the most intriguing commercial aspects of the league’s new CBA, official word out of MLB HQ in Manhattan is that the ad patch program, which players and owners have been discussing for years, is still incomplete and unfinished. An MLB spokesperson this morning maintained that the program was still incomplete, but most of MLB’s 30 clubs would find those claims bewildering. While the patch program will not start until the ’23 season, two team deals are essentially completed. Clubs and agencies have been in the market pitching the patches for months. Even more arresting is the pricing of MLB’s new patches. At a time when there is more ad signage on uniforms and around the field of play in pro sports than ever, many teams are asking more for a 4 1/2 x 4 1/2-inch sleeve patch than they received for their stadium naming rights.

CASHING IN: Some big-market legacy MLB teams are asking for more than $20M a year for their patches, sources said. “Most teams have had substantial conversations in the market about their patches or are at the finish line, waiting for the final word from the league,” said one veteran West Coast MLB team marketer. “There’s a lot of media value and the money is real — the average team should get $8 or 10 million.” If that average is realized, ad patches will mean a new revenue stream for teams of $240-300M combined annually. Teams will not be permitted to sell ad patches to spirits, betting, or media brands. “The expectations from the bigger MLB teams are that they’re going to get the same numbers as the biggest first-generation NBA patch deals, like the Lakers and Warriors,” said Excel Sports Management Senior VP/Head of Properties Jason Miller, whose firm engineered patch deals with the 76ers, Bulls, Celtics, Hornets, Rockets and T-Wolves. “With twice as many games, does that mean teams like the Dodgers or the Yankees can get $20 million to $30 million? I think it does,’’ Miller added. When MLB first sold patches as part of a sponsorship package for overseas games decades ago, they sold for the low seven figures, as part of comprehensive sponsorship package.

CREATING MORE SPACE: Sources said that MLB has reserved helmet decal ads as its own national inventory, which would make the typical postseason packages that the league sells with its broadcast rightsholders more valuable. It was unclear when that incremental advertising program will begin, but it could be as soon as this postseason. From a viewpoint focused on camera exposure, MLB patches offer exponentially more than any other sport, largely due to the sport’s relatively static nature and predominant camera angle of the batter from centerfield. An analysis from Excel’s analytics unit (formerly Block Six) revealed that MLB patches would get 37 minutes of exposure per game, versus around four minutes for the smaller (2 1/2 x 2 1/2-inch) NBA ad patch. “Other properties will challenge baseball in terms of social media reach, but in terms of exposure, these can’t be touched under what’s out there now,’’ said Miller, adding that Excel was not representing any teams for patch sales but was in conversation with some. Teams will have a long runway to sell this new asset, but as one agency type recalled, “Half the NBA teams opened year one without a patch partner. We’ll see how long teams that want big numbers will hold out, especially after two lousy pandemic years.”

NEW AGE: As for the unprecedented amount of on-field branding now available across pro sports? “When the EPL adopted a second (jersey) position, (sales) numbers for the primary jersey sponsor went up,” said Elevate Sports Ventures Exec VP Chris Allphin. “Baseball is designed for this platform with long, sustained shots and their patch will be bigger than anyone else’s. … It will be an extremely efficient platform that has a powerful association with players.” There are many unanswered questions to resolve before MLB’s ad patch program debuts next season. While the ad patch is supposed to be placed on the “predominant shoulder” of MLB players, on which side will switch hitters wear them? Angels P/DH Shohei Ohtani, for example, bats left and throws right. On which side will he wear the patch? It is also unclear whether retail MLB jerseys will carry the advertising patches, though Fanatics and MLB have a cozy relationship.

MORE INTRUIGING QUESTSIONS: With all the crypto money driving sponsorship sales, and FTX a large MLB league sponsor, how long will it be before a rival crypto exchange brand buys a sleeve patch or patches in an attempt to blunt FTX’s MLB ties, which include branded patches on umpires? MLB’s adoption of non-apparel jersey ads leaves the NFL as the only holdout among the big leagues, so how soon will that league join in? And as one sports sponsorship veteran quipped “How long until we just have a QR code as the jersey patch?”