Cryptocurrency companies helped fuel the NBA’s sponsorship revenue to a record $1.6 billion in the 2021-22 season, according to estimates by IEG, a sports partnerships consultancy.
That’s up 13% from the $1.4 billion in the 2020-21 season. In the 2018-19 season, the National Basketball Association raked in $1.2 billion in sponsorship money. Sponsorship agreements can include deals for arena-naming rights and for companies to put their names or logos on players’ jerseys.
“The cryptocurrency category’s sponsorship sending spree is like nothing we have ever seen before,” said said Peter Laatz, IEG’s global managing director.
Crypto partnerships are now the second most lucrative sponsorship category for the NBA, behind only the technology category. Among the NBA’s crypto deals this season was a league agreement with crypto trading platform Coinbase. CNBC reported that the deal is worth $192 million over four years.
Other categories estimated to pay the NBA over $100 million annually include banks, telecom and merchandise, according to IEG. Companies spending at least $50 million include Anheuser-Busch, Pepsi, and AT&T.
Among the big four sports leagues, the NBA ranks third in sponsorship revenue. The NFL is No. 1 with nearly $2 billion in sponsorship deals for its 2021 season, according to IEG. And in March, CNBC reported MLB made $1.7 billion in sponsorships last season. The NHL secured $676 million in sponsorship money for the 2020-21 season.
IEG’s projections come as the NBA Finals are set to begin on Thursday, when the Golden State Warriors will host the Boston Celtics in Game 1 at Chase Center.
On the team front, the Los Angeles Lakers agreed to a 20-year arena-naming rights contract worth $700 million with platform Crypto.com. And the Warriors signed a $10 million global rights agreement with FTX, a crypto derivatives exchange. The company also secured arena naming rights for the Miami Heat.
NBA jersey ads grow
Another category helping the NBA’s bottom line: ads on players’ jerseys.
The NBA is expected to bring in more than $200 million this season from jersey patch deals. They include the Brooklyn Nets securing $30 million a season from brokerage trading platform Webull in September 2021. The deal led the NBA at the time, but the Warriors overtook the top spot earlier this month when it renewed its deal with Japanese e-commerce company Rakuten.
The terms of that deal weren’t publicly undisclosed. But league sources told CNBC Rakuten will pay the Warriors north of $40 million annually. That’s up from $20 million for the previous deal.
The people spoke to CNBC on the condition of remaining anonymous because they’re restricted from publicly discussing team agreements.
Jersey sponsorships have expanded in pro leagues over the last year. The NHL, for example, added patches on uniforms and helmets during the pandemic. And the MLB approved team uniform patches in its new labor agreement with players in March of this year. The NFL doesn’t allow patches on uniforms.
Growing revenue from ads on uniforms and other sponsorship deals could help the NBA reach its projected $10 billion in total revenue this season. NBA Commissioner Adam Silver has said total revenue in the 2020-21 season was down about 35% from the previous year after the pandemic trimmed the season to just 72 games. Revenue in the 2019-20 season, which was also partially impacted by the pandemic, was $8.3 billion, down from $8.8 billion in 2018-19.
The league’s sponsorship revenue is expected is poised to keep growing.
The league’s data rights deal with Switzerland-based Sportradar — reportedly worth $1 billion — starts in the 2023-24 season. The NBA’s TV deal also expires after the 2024-25 season and sports executives expect that’ll eclipse its current $24 billion value, or roughly $2 billion per 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 deals, companies also commit to buying advertisements for national NBA games.
For 2021-22 regular-season games, national ad spend on NBA games reached $470.7 million, according to media tracking company iSpot.
