7 minute read · Issue Number 112 · March 18th, 2022
Hey, happy Friday!
Earlier this week, Spotify signed a deal worth around $307m – roughly $77m per year – with FC Barcelona to promote their brand in the uniform (and stadium).
Was it a good investment for Spotify? [See my Twitter thread here]
More generally– why do brands sponsor jerseys? How did that happen?
Turns out, the business of placing logos in uniforms is more recent than you’d probably expect.
Grab a cup of coffee while we discuss the massive business behind uniform sponsorship.
Brief History of Uniform Sponsorship
Peñarol – Uruguayan soccer club – was the first team to introduce the concept of uniform sponsors in the 1950s.
A few teams followed from diverse countries, but most leagues and teams were against the idea and prohibited sponsors’ use in their jerseys.
Mainly to avoid risking the reputation of a team, but also to avoid looking pathetic:
The first Bundesliga club to get a jersey sponsor was Eintracht Braunschweig – placing a Jagermeister logo on their jerseys in 1973. English soccer leagues followed in 1976.
Growth was slow – the following 30 years, many teams and leagues resisted the temptation to place sponsors on their playing jerseys for quite a long time.
The NFL, NBA, and NHL only began allowing teams to have practice jersey sponsors in 2009.
The NBA only began allowing sponsors in game-time jerseys in 2017 (which, by the way, now generates over $150m to the league per year).
Commercial motives are the most obvious, but brands will also look to build up their brand equity through awareness, associations, and perceived quality.
Brands will also look for the massive exposure and a fairly segmented audience that a team can reach – think of:
The media created around players (pictures, highlights, GIFs) and shared countless times on socials — having a clear visual of the logo there.
The merch bought by the fans will feature the logo everywhere they go.
The impact that’s generated from recognizing an athlete next to the logo.
Don’t believe me? See it for yourself. Which of the following campaigns feels more appealing:
It is challenging to estimate a fair return on investment because brands will generate revenues as a side effect of sponsoring uniforms.
We may not know the true impact of sponsoring uniforms, but most recently, teams realized the revenue potential, while brands bet that the exposure and brand equity is worth it.
🎙 Halftime Snacks Podcast
Joe played four years of professional baseball in the Chicago White Sox and founded a few companies, including Haste Arcade.
Haste Arcade is the world’s first Instant Leaderboard Payout (ILP) system, enabling gamers to get paid for their high scores on virtually any game.
We talked about Joe’s sports career and process towards building Haste Arcade, play to earn, ILP (Instant Leaderboard Payout), the role of microtransactions on the internet, and ended up sharing diverse takes on eSports, crypto, NFTs, Bitcoin SV, and much more.
Listen to my chat with Joe here.
Apply to be a guest on the Halftime Snacks Podcast here.