Sponsorship Insider

Sports sponsorship rights intelligence

Basketball’s billion-dollar sponsorship market

Basketball’s billion-dollar sponsorship market

By: Matthew Glendinning

Posted:
2 Nov 2016
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In October’s Sports Sponsorship Insider, we took an in-depth look at the sport of basketball, covering 773 sponsorship deals, including 400 National Basketball Association (NBA) team deals, plus central agreements from the top-earning NBA, commercially-significant Chinese Basketball Association and portfolio-growing EuroLeague.

These sports market data-captures are now a monthly feature of Sports Sponsorship Insider, helping to add new deals to the Deals Tracker database (on 15,683 deals as of November 2) and providing a new layer of interactive intelligence for subscribers.

According to our research across basketball clubs, selected leagues and pan-European competitions, basketball is a $1bn-plus sponsorship market. It’s the kind of headline figure that editors can’t resist, but it’s the granular detail in the research that particularly caught my attention.

I’ve picked out four segments from the research that stood out for me. And if you want the numbers on individual deals, our Deals Tracker service will get you there.

1. There are 25 daily fantasy league sector deals among the 38 NBA teams. Daily fantasy league brands are more acceptable to the major US sports leagues than those from the gambling sector, although the likes of DraftKings and FanDuel have suffered for their failure to police their own staff’s ‘insider trading’ and are now set to merge to survive. The beer sector, by the way, is present at every NBA club – some even have two beer brand partners – showing that the US has a far greater tolerance of alcohol consumption than gambling.

2. Chinese sports brand Li Ning is paying around CNY 400m ($59.1m) per year as Official Outfitter of the Chinese Basketball Association league, a deal that comprises more than half the value of the league’s central sponsorship rights. The five-year deal, which ends this season, gives Li Ning rights to attire players from head to toe. Nike’s eight-year NBA apparel deal, which kicks in for the 2017-18 NBA season, is reportedly worth more than $1bn, or $125m per year, and will make up between one-fifth and one-sixth of the NBA’s central deal revenue. Nike’s logo will appear on in-game jerseys, a privilege not afforded to the incumbent Adidas.

3. EuroLeague clubs from Turkey have the greatest number (seven) of financial services companies as sponsors, if one discounts the Russian team Unics Kazan, which has 10 such agreements, all from subsidiaries of the national bank of the Republic of Tatarstan, the region in which the team is based. In Turkey, Dogus Group and Odeabank are the title sponsors and biggest backers of Darussafaka Istanbul and Galatasaray respectively, making their case for leadership positions in the fractured 50-bank Turkish banking sector. EuroLeague qualifying clubs from Germany, Israel, Italy, Lithuania and Serbia had no partnerships with the sector.

4. The financial services sector is the dominant sector for naming rights partners to NBA basketball arenas in the US. Some arenas have had two such partners in their lifetime: TD Bank is the second financial services company to name the Boston Celtics’ Garden arena, after Fleet Bank held the rights from 1995 to 2005. Fleet Bank paid out of its agreement following a merger with Bank of America. The next arena naming rights deal up for grabs is the BMO Harris Bank Arena, home to the Milwaukee Bucks, which expires at the end of 2017.

Recent deals
October’s Sports Sponsorship Insider also featured four recent basketball deals that provide unique market insights.

Our cover story looks at a double-market deal made by oil and gas company ExxonMobil, which covers the US and China. ExxonMobil has taken rights in the NBA’s motor fuel and lubricants categories from 2016-17 to 2018-19, in a deal worth double-digit millions of dollars per year. ExxonMobil is also second-tier Official Sponsor of the Chinese Basketball Association under a multiyear agreement.

 

ExxonMobil has not made deals in the European basketball market, but another deal covered in this issue – between German banking group ING-DiBa and Germany’s national basketball and national wheelchair basketball teams – shows just how affordable basketball can be below the major properties. Subscribers, of course, get the numbers and the background to the deal.

We also have the numbers and story behind Chinese mobile phone brand Vivo's successful unseating of the incumbent ZTE to become the Official Mobile Phone Partner of the NBA in China.

Elsewhere this month, we provide the key intelligence on the following deals:

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