ESPN’s Darren Rovell is reporting that the Lakers have agreed to a jersey sponsorship deal with the e-commerce company Wish. The deal will reportedly pay the Lakers $12-14 million a year over the next 3 years. The Sports Business Journal has more information on Wish and details about the agreement with the Lakers:
Wish, founded in ’11, is a “digital mall” that sells discounted merchandise through an e-commerce platform. According to the company’s website, it is the sixth largest e-commerce company in the world. Lakers President of Business Operations Tim Harris said other elements of the Wish deal include a founding sponsorship in team’s training center, along with signage and hospitality in Staples Center. The Wish logo will also be on the team’s G-League South Bay Lakers franchise.
The NBA moved into the world of selling ads on their uniforms for this upcoming season and the reactions have been somewhat mixed. For many, any disruption to the classic and clean look of the uniforms was going to be a problem — especially when talking about franchises with historically (mostly) unchanged unis like the Lakers or the Celtics.
For others, though, the idea of creating a small patch on the uniform would not be intrusive at all. And when you add in the additional revenue generated from this, it’s a win-win for everyone. Purists would need to get over it. This is the direction the sports world is moving — look at soccer uniforms where the name of the advertiser is more prominent than that of the team. Not to mention Nike has already added their own branding patch to the front of the jersey anyways. There is no more sacred.
What intrigues me most about this, though, isn’t the debate among fans about more branding clutter on uniforms. Instead, it’s the tie-in back to the revenue disparity issues that are back in the news recently.
Zach Lowe and Brian Windhorst reported that nearly half the NBA teams are losing money. Some owners citing losses isn’t new. Look at the last lockout where player concessions on BRI in order to better funnel money into the owners pockets was the main point of contention. However, owners citing losses in the wake of a multi-billion dollar national TV contract isn’t exactly the best look — but that’s a point for another day.
Getting back to the Lakers, Lowe and Windhorst used them as a prime example of why certain owners remain unhappy in the wake of what they are calling operating and outright losses:
The range of the revenue spectrum is illustrated by the two teams at the opposite ends: the Lakers and Grizzlies. And it’s stunning.
In the wake of Kobe Bryant’s retirement, the Lakers were devoid of a star player attraction last season for the first time in two decades. To retain their protected draft pick, they tanked the second half of the season, their fourth straight with 27 or fewer wins.
But it was a wonderful season financially. The Lakers finished with a gargantuan $115 million profit as measured by net income even after writing a revenue-sharing check for almost $49 million, according to league accounting. That was the highest net income in the league by nearly $25 million. The biggest factor was the $149 million they took in from massive local media rights deals, primarily with Time Warner.
Look, this isn’t new. The Lakers have brand equity and market advantages over nearly every team in the league. The only teams which come close are the Knicks (huge market and a historical significance — for better and, recently, for worse) and the Celtics (good, but not great market with an amazing historical relevance). But, that’s it.
Getting back to the jersey ads, then, the Lakers are now going to rake in another $12-14 million in pure profit. And, let’s be real, one of the reasons why their sponsorship money is as high as that is because they’re the Lakers. So, the rich get richer.
This might make some mad or serve as another talking point at meetings of the NBA Board of Governors. For the Lakers, though, they are clearly set on maximizing their own revenue streams and, as they’ve shown, are willing to share in that via payments back to the league. From their end, I’m not sure what else they can do.
Keep collecting those checks, Jeanie. Because we know the league is going to have you keep cutting them, too.