MLB has set a league record for sponsorship revenue generated in a season, taking in $892 million in 2017; a 7.9% increase YOY and up 26% from just 5 years ago ($663 million). Newly signed deals with Coke (KO), Nathan’s Famous (NATH), Old Dominion Freight Line (ODFL) and 5-Hour Energy along with the addition of presenting sponsorships for the playoffs and World Series, are credited driving the growth. New Era, StubHub (EBAY), Budweiser (BUD), Majestic Athletic and State Farm were the league’s 5 most active sponsors. The data was compiled by ESP Properties, a sports & entertainment research and consulting firm owned by WPP (WPPGY).
Howie Long-Short: MLB finished a distant 2nd among the 4 major U.S. professional sports leagues in sponsorship revenues generated. The NFL brought in $1.2 billion during the ’16 season, the NBA did $880 million and the NHL generated a league record $505 million in ’16-’17 (5.9% increase YOY). With the addition of the Adidas (ADDYY) contract, the NHL is expected to set another record this season.
Fan Marino: While on the topic of baseball, Astros OF George Springer hit a HR in the 7th inning of Game 5 of the World Series, that appeared to explode upon landing. You can check out the video here. While logic points to perfect placement and immaculate timing by the Astros pyrotechnic staff, conspiracy theorists will claim the balls are juiced…with TNT. I suppose it’s possible. The teams have combined for a World Series record 22 home runs through 5 games.
Behind Coke, YouTube, Camping World, MLB Sponsor Spend Hits $892M In 2017
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NBA sponsors spent a record $861 million during the 2016-2017 season, a 7.8% jump from 2015-2016 and a significant increase from the projected 4.3% annual increase in overall sports sponsorship expenditures. Sponsorship dollars are expected to rise again during the 2017-2018 season, with a new 8 year/$1 billion Nike (NKE) uniform deal beginning and teams selling advertising patches on their jerseys for the first time. State Farm, Anheuser-Busch Inbev (BUD), Gatorade (PEP) and Tissot (OTC: SWGAY) were the league’s most active sponsors during the ’16-’17 season.
Howie Long-Short: The data was compiled by ESP Properties, a sports & entertainment research and consulting firm owned by WPP (WPPGY), an international advertising & PR firm. Back in August, WPPGY cut full year revenue projections to between 0-1% for 2017 as some of their high-profile clients have cut back on ad spend (the consumer goods sector, in particular). CEO Martin Sorrell warned that Facebook (FB) & Google’s (GOOGL) dominance as advertising platforms and Amazon’s (AMZN) disruption of the retail sector are holding back ad growth world-wide. If he’s right, things are going to get worse for WPPGY (and others in the advertising world) before they get better.
Fan Marino: 9 of the league’s 30 teams had team sponsorship revenues below the league average last year; Charlotte Hornets, Denver Nuggets, Detroit Pistons, Milwaukee Bucks, Minnesota Timberwolves, New Orleans Pelicans, Philadelphia 76ers, Sacramento Kings and Utah Jazz. Only Charlotte and New Orleans do not have jersey patch sponsorships in place for this season. Is it a coincidence that the other 7 were proactive in securing lucrative ad patch deals? Probably not.
Sponsorship Spend On NBA Tops $880M, Will ‘Skyrocket’ With Nike, Jersey Deals
The NFL has partnered with Bruin Sports Capital and WPP (WPPGY) to introduce Game Pass, a subscription based on-demand streaming service for NFL fans in 61 European markets. The league will charge fans $183/year for 300 live games, access to NFL network, NFL Redzone and shows like “Hard Knocks”. Early results have been promising for Game Pass, as the service was able to convert free trials into paid subscriptions during the preseason.
Howie Long-Short: WPP is the world’s largest advertising and PR firm; and is publicaly traded on the NASDAQ exchange under the symbol WPPGY. The company recently released its Q2 ‘17 earnings report and shareholders did not receive the news they were hoping for. CEO Martin Sorrell cut full year growth targets to between 0-1% (down from 2%), announced net sales were down .5% YOY for the 1st half of ’17 and said we could expect much of the same in 2018. Here’s to hoping the NFL sees the astronomical growth in Europe that it saw here in the 90s and 00s. I just don’t see that happening.
Fan Marino: The NFL plays their primetime games at 8:30p. While the time difference isn’t as drastic as it is for Chinese fans; European fans aren’t staying up until 4:30a (kickoff would be 1:30a in London) on Sunday, Monday or Thursday nights to watch Carolina play Kansas City. Can you fall in love with a sport when you never see the biggest games on the schedule?
The NFL takes a Netflix-style approach to fuel its growth in Europe