QR Codes Can Unlock Jersey Patch Value and Drive Revenues

QR Codes Can Unlock Jersey Patch Value and Drive Revenues

Jersey patch partnership deals have become a substantial source of NBA, NHL, and MLB team income over the last half decade (think: 8-12% of sponsorship revenues). Some clubs have been able to command north of $20 million a year for the highly visible real estate.

But organizations with unsold inventory, and those looking towards their next deal (remember, the bulk of these pacts are three years or less), are finding a tighter market than years’ past.

Teams working to sell the marquee partnership asset are facing two primary challenges, in addition to any macro headwinds that may exist (like ’24 being in an election year). One is the perceived “glut” of available patch inventory in the market across the three leagues. 

The other is the ongoing shift amongst marketers towards active activations that allow fans to immediately interact with a brand or its content (think: custom experiences or call-to-action campaigns). 

“As brands become more sophisticated, targeted, and intentional in their marketing strategies, the importance of raw exposure value without engagement and activation potential is becoming less of a priority and harder to justify,” Tony Schiller (executive vice president, Paragon Marketing Group) said.   

Historically speaking, jersey patch partnerships have largely been passive activations meant to maximize top of funnel awareness. The hope has been that fans would seek out the brand after seeing its logo on a player at a game, on television, or in social media content.

But the Indiana Pacers have found a way to make a typically static asset, interactive–via an innovative new partnership with Spokenote. The Indiana-based company, and now club partner, uses QR codes to attach video content to physical objects (like a patch on a basketball jersey).

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Spokenote is featuring a black and white QR code as its primary element on the Pacers’ uniform patch. The company’s logo appears in a small font size below the square barcode.

The activation seemingly runs counter to marketing best practices. Jersey patches are relatively small, so brand partners typically prefer to use large, easily identifiable logos (or the company name in as big of a font as possible) to maximize recognition.

But Spokenote saw an opportunity to increase awareness of its solution and demonstrate to the industry at large how patch partnerships can be more than just miniature billboard advertisements. Fans can scan the QR code on the Pacers’ jersey and unlock exclusive, never-seen-before programming.

“There are tons of application for Spokenote’s core product [in] our business,” Todd Taylor (president and CCO, Pacers Sports & Entertainment) said. “This is [one new] way to engage fans and drive them to custom content.” 

The Pacers’ willingness to place a QR code on its uniform was also a way for the team to distinguish itself and its patch opportunity in a crowded marketplace, and maximize the value of a partnership. 

“It was at times a reverse sale. We had companies pitching us,” Taylor said. “We wanted to be careful to not just partner with someone who just saw it as a billboard.”

The tie-up is seemingly paying off for both sides. The Pacers are already exploring how some of its other partners can use Spokenote Code within team activations to co-promote content, merchandise, and collectibles. And other sports organizations are now looking to leverage the technology too.

“There are certainly [other properties] that are working on this,” Taylor said.

While unconventional, it’s not particularly surprising that the Pacers’ tech-enabled patch activation is working. QR codes have been used successfully in sports advertising before. Coinbase leveraged one as the primary component of a 2022 Super Bowl ad that crashed its site, and Amazon imbedded the technology into commercials during its Black Friday game broadcast. 

What makes this deal novel is its breadth. Spokenote Code is going appear on the Pacers uniform for multiple years. So, fans of the league are going to see it on dozens of players, time and again, across broadcast, streaming, and social media channels.

It is important to note that jersey patch partnership pacts typically include activations beyond logo exposure on the uniform. This can include, but is not limited to, in-venue signage, tickets to games, corporate hospitality and suite access, special events (such as a player or coach appearance), and community activations. 

“Patch deals are sold as marketing partnerships with additional assets because both [buyers and sellers] recognize that fans don't [always] react to and engage with a patch,” Schiller said. However, “the potential to create engagement, and use the patch as a conduit to content, opens up a world of possibilities for properties, brands, and fans.” 

And it should help to ensure that these jersey patch partnership deals continue to drive substantial revenues for leagues, teams, and their partners.

“It is a much more crowded landscape from when the NBA rolled out jersey patches to now,” Taylor said. “Where does this stretch to as a retail application? How does the patch eventually evolve to other [revenue] opportunities? The leagues will determine how fast or slow it goes and how wide it goes.”

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About The Author: Adam Grossman founded Block Six Analytics. He is also a professor at Northwestern University Master’s In Sports Administration program and the co-author of The Sports Strategist: Developing Leaders for a High-Performance Industry. You can find him at [email protected].