As the sports business deals with the fallout from FTX’s bankruptcy and the collapse of other cryptocurrency partnerships, many of the lessons to be learned are obvious, revolving around the ramifications of doing massive deals with young companies in a new, speculative industry.
But a recent report from Nielsen about the potential value of MLB jersey patch sponsorships offers a more subtle warning sign for marketers of sports and entertainment partnerships.
The research giant used its Quality Index Media Value metric, which assesses the
“projected average monetary value of live broadcast exposure received by the sponsor,” to compare what the jersey patches of different MLB teams are worth relative to each other and compared to teams in the NBA, NHL and MLS.
Unsurprisingly, Nielsen declared the highest jersey patch values belong to the largest market teams in MLB. While the average QIMV for the league is $12.4 million for next season, Nielsen sees a wide range across the 30 teams.
“Given the metro areas they support, sponsorship patches on the New York Yankees, Los Angeles Dodgers and San Francisco Giants jerseys would generate the highest QIMVs. The QIMV for the top five teams are projected to generate an average of $24.2 million for the upcoming MLB season, while the five at the opposite end of the spectrum are projected to deliver an average of $6.9 million.”
The disparity with other leagues is even more eye-popping. The key factor here is length of exposure sponsors are expected to receive per game across the 162-game MLB season. The league’s $12.4 million average compares to Nielsen’s estimate of $2 million for the NBA, $1.6 million for the NHL and $500,000 for MLS.
The issue here is not with Nielsen’s numbers, but rather with those who will use them to jump to the conclusion that MLB patch sponsorships are worth on average more than six times that of an NBA team jersey or nearly 25 times that of an MLS kit.
Visibility and awareness is just one component of the overall value of a partnership, yet experience tells us that many will evaluate and price potential deals primarily on this single element, neglecting not only to account for the significant value of activating a loyal fan base through experiential and content platforms that can drive lower-funnel results and directly impact the bottom line, but also failing to recognize that the value of exposure varies greatly depending on the brand and its place in the market.
And that brings us back to crypto.
Those who sell partnerships based mostly on the eyeballs they attract narrow their prospect pool to brands that need awareness fast. New players introducing new products with unknown names will be at the top of those target lists, bringing with them the risk inherent in their upstart status. Conversely, sellers who offer jersey sponsorship packages with value beyond visibility deepen their pools to include established brands with pockets that are deeper in the long run than the emperor’s new clothes.