In this illustration, the Coinbase logo is displayed on a smartphone with the NBA logo in the background.
Thiago Prudence | soba pictures | light glow | Getty Images
Cryptocurrency firms helped boost NBA sponsorship revenue to a record $1.6 billion in the 2021-22 season, according to estimates from sports partnership consulting firm IEG.
This is a 13% increase from the $1.4 billion in the 2020-21 season. During the 2018-2019 season, the National Basketball Association raised $1.2 billion in sponsorship money. Sponsorship deals can include deals for arena naming rights and for companies to put their names or logos on players’ jerseys.
“The sponsorship of the cryptocurrency sending frenzy is unlike anything we’ve seen before,” said Peter Latz, global general manager of IEG.
Crypto partnerships are now the second most lucrative sponsorship category in the NBA, after the technology category alone. Among the cryptocurrency deals in the NBA this season was the league’s deal with crypto exchange Coinbase. CNBC reported that the deal was worth $192 million over four years.
According to IEG, other categories that are expected to pay the NBA more than $100 million annually include banking, telecommunications and commodities. Companies that spend at least $50 million include Anheuser-Busch, Pepsi, and AT&T.
Among the four major sports leagues, the NBA ranks third in sponsorship revenue. The NFL ranks first with nearly $2 billion in sponsorship deals for the 2021 season, according to IEG. And in March, CNBC reported that MLB earned $1.7 billion in sponsorship contracts last season. The NHL received $676 million in sponsorships for the 2020-21 season.
The IEG predictions come as the NBA Finals are set to begin Thursday, when the Golden State Warriors host the Boston Celtics in Game 1 at Chase Center.
On the team front, the Los Angeles Lakers have agreed to a 20-year, $700 million arena naming rights deal with platform Crypto.com. The Warriors signed a $10 million global rights deal with FTX, a crypto derivatives exchange. The company has also secured the arena naming rights for the Miami Heat.
0 Boston Celtics’ Jason Tatum heads to the basket during the game against the Golden State Warriors on March 16, 2022 at Chase Center in San Francisco, California.
Jed Jacobson | National Basketball Association | Getty Images
NBA jersey ads are on the rise
Another category that contributes to the NBA’s bottom line: ads on players’ shirts.
The NBA is expected to bring in more than $200 million this season from jersey patch deals. It includes securing the Brooklyn Nets $30 million a season from brokerage platform Webull in September 2021. The deal was at the helm of the NBA at the time, but the Warriors overtook the number one spot earlier this month. When they renewed their deal with Japanese e-commerce company Rakuten.
The terms of this agreement have not been made public. But league sources told CNBC that Rakuten will pay Warriors North $40 million a year. That’s up from the $20 million in the previous deal.
The people spoke to CNBC on the condition that they remain anonymous because they cannot discuss the team’s deals publicly.
Jersey’s sponsorship in professional leagues has grown over the past year. The NHL, for example, has added patches to uniforms and helmets during the pandemic. MLB approved the team’s uniform corrections in its new player contract in March of this year. The NFL does not allow patches on uniforms.
Increased revenue from uniforms ads and other sponsorship deals could help the NBA reach $10 billion in total revenue this season. NBA Commissioner Adam Silver said total revenue for the 2020-21 season is down about 35% from the previous year after the pandemic reduced the season to just 72 games. Revenue for the 2019-20 season, also partly affected by the pandemic, was $8.3 billion, compared to $8.8 billion in 2018-2019.
League sponsorship revenue is expected to continue to grow.
The league’s data rights deal with Swiss company Sportradar – estimated to be worth $1 billion – begins in the 2023-24 season. The NBA TV deal also expires after the 2024-25 season, and sports executives expect it to exceed its current $24 billion value, or about $2 billion a season. The NBA also has a merchandise deal with e-commerce powerhouse Fanatics and a deal with Dapper Labs, the creator of NBA Top Shot NFTs.
In league agreements, companies are also obligated to purchase advertisements for NBA national games.
For 2021-22 regular season games, domestic ad spend for NBA games was $470.7 million, according to media tracking company iSpot.