A brief item from Sports Business Journal last week received surprisingly little industry reaction despite the potential of the news to upend the traditional relationship between pro sports leagues and players when it comes to including athlete marketing rights in league partnership deals.
The lack of buzz may be due to the absence of details about the arrangement, but the picture painted by both the league and the Major League Baseball Players Association suggests a new day has dawned as, according to SBJ, “the league recently gained permission to package player rights within its sponsorships.”
Evan Kaplan, managing director of MLB Players, Inc.—the for-profit marketing subsidiary of the union—told the publication, “Ultimately, we wanted players to be at the forefront of MLB marketing, and (the league) wanted better activations around players, so it’s easier to sell. … Now (MLB) can even put players in their decks. So, brands that are sponsors or potential sponsors will be thinking about using players in their marketing from Day 1.”
In addition, MLB chief revenue officer Noah Garden is quoted as saying, ““Not only will we have player rights with us at the table when we are meeting with (potential) new partners, we will make it a condition of being an MLB partner.”
While that condition is almost certainly negotiable, the sentiment behind it—to encourage sponsors to activate their new deals in ways that benefit themselves, the league and players—makes a great deal of sense.
So does the bundling of rights into a single agreement, eliminating an additional step for time-crunched sponsors who otherwise would need to meet and negotiate a collective rights agreement with MLBPI. (Single player deals for product endorsements, ads, live appearances, etc., presumably remain outside the purview of the league and the union.)
From a sales standpoint, one of the challenges of pitching sponsorship of any kind has always been the necessity of saying, “To really get the full benefit from the rights you secure from us, you will have to sign additional agreements to promote the association,” whether those other deals are with media, talent or other third parties. Although sponsorship will never be a one-stop-shopping experience, properties gain an advantage anytime they can eliminate a stop along the way.
What is unknown of course is how the money from new partnerships gets allocated among the multiple rights holders involved, but it is likely no different than if a sponsor negotiated separately with MLBPI.