Despite On- And Off-Court Challenges, NBA Sponsorship Deals Top Record $1.4B

By Barry Janoff

June 29, 2021: Despite a late start, shorter season and COVID-19 protocols, the NBA and its 30 teams are on track to reach an estimated record $1.46 billion in sponsorship deals for the 2020-21 campaign.

League-level partnerships led the sponsorship drive, with the NBA reaching 13 new deals, according to sponsorship, marketing and consulting firm IEG, Chicago.

The $1.46 billion represents more than 6% year-over-year growth.

NBA league-level sponsorship spending has increased by nearly 50% since the 2017-18 season.

NBA sponsor spend topped $1 billion for the first time in 2017-18 ($1.2 billion, up from $861 million sponsor spend in 2016-17).

“NBA sponsorship revenue is close to reaching the heights of the preeminent National Football League that had total sponsorship revenue $1.62 billion last season,” Peter Laatz, IEG global managing director, said via the Chicago-based firm.

“The star power, number of games, variety of 'sponsorable' assets and global popularity of the NBA all contribute to the league’s continued growth.”

Technology was the top sponsorship category during the 2020-2021 NBA season, with nearly $115 million in new spending.

Among the league-wide deals was Microsoft being named the “official artificial intelligence partner” and an “official cloud and laptop partner” of the NBA.

Among the other news pacts this past season, the league signed a multi-year alliance with Mondelēz International that names the global snacking company an “official partner of the NBA, WNBA, NBA G League, NBA 2K League and USA Basketball."

Over the past year, the NBA has named CarMax the “official auto retailer” of the NBA (and WNBA); signed a multi-year global partnership that designates Hotels.com as the “official travel partner of the NBA”; signed a multi-year pact naming Clorox the “official cleaning partner” of the NBA and WNBA; and signed a multi-year deal expanding Hennessey’s status as the “official spirit of the NBA” to a global platform.

Just prior to the playoffs, the NBA expanded its horizon by aligning for the first time with Fortnite, the mega global online video game developed by Epic Games.

In addition, the NBA signed a multi-year marketing partnership renewal with PepsiCo to maintain its Mtn. Dew and Ruffles brands as the “official soft drink and official chip” of the NBA, WNBA and NBA G League.

Lottery and gaming brands were also very active new spenders putting almost $50 million of new money on the books, per IEG.

The NBA has deals that include Bally’s, MGM Resorts, Fox Bet, FanDuel, DraftKings, Caesars Entertainment William Hill, Sportradar, Genius Sports and BetStars.

The technology, lottery and gaming, telecommunications, sports apparel and banking categories each contribute more than $100 million of NBA sponsorship revenue annually, according to IEG.
 
The most active brand categories in the NBA are insurance, retail, beer and wine/spirits, with each category holding in excess of 70 individual deals.

The most involved brands based on the number of partnerships are State Farm, Anheuser-Busch and Verizon.

Each brand has sponsorship agreements with 20 or more of the league’s 30 teams.

Verizon inked 12 new NBA deals last season.

At the team level, jersey patches have had a significant impact over the past several years.

Total sponsorship revenue for the NBA and its teams has grown by nearly 70% since the last season (2016-2017) before that sponsorship asset was introduced.

"Some teams are getting more than $15 million per year for jersey patches and that is close to the $30 million a naming rights sponsorship can bring in annually," said Laatz.

This past season, 27 of the teams had jersey patch sponsors, including new deals between Honey and the Los Angeles Clippers and Motorola and the Brooklyn Nets.

Motorola is the only brand with multiple jersey patch sponsorships (Brooklyn, Milwaukee Bucks, Indiana Pacers).

Spending is expected to increase for 2021-22 season, during which the league will celebrate its 75th anniversary.

Last year, Wilson signed a deal to return as the NBA’s official game ball for the first time since 1983, replacing Spalding, beginning with the 2021-22 season.

IEG is owned by Engine Shop and is part of the Bruin Capital portfolio of companies.

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