Tuesday, October 5, 2010

A Case Against Advertising on Jerseys

Mark Cuban, the highly respected entrepreneur and owner of National Basketball Association's Dallas Mavericks, recently made news with his comments to AdAge about the possibility of corporate logos on team uniforms, similar to the custom in soccer.

Not so shockingly, Cuban is in favor of it; proclaiming that "it's definitely on the horizon. I think it's more of an issue of 'how much' rather than 'if.' Find me a multi-year deal at $10 million or more per year and I will make it happen."

Obviously, American sports owners would be eager to make this customary in their respective organizations; especially the ones who need it for more than extra padding on their bottom line. It's tough to resist a fresh $10 mill at a time when the big new free agent is asking for $15 mill.

The root of the problem is managing cost, which doesn't always increase at a higher rate than revenues. So far, the only solution to such a problem is more. But unfortunately, this eventually becomes self defeating.

The reason for that is that more advertising creates more clutter and thus less value or return for the marketer. It's simple; a scarce resource is a valuable one. Yet, in American pro sports, ad space is no longer a resource that warrants a premium price. All are welcome and its corporate communications overload in our ballparks.

This is not the case for leagues like the English Premier League. Corporate messaging is scarce on the pitch; its almost completely limited to field level signage and ads on the uniform. The television ad inventory for soccer is next to nothing. So large uniform deals make sense for both parties.

Rather than getting creative with finding more ad space, American pro sports teams should really focus on more creative ways to serve their clients: the fan and the sponsor.

As always, post your comments below and I look forward to reading them.

No comments: