The NFL’s Best Real Estate Isn’t for Sale. Yet.

Stephen J. DUBNER:  How do you think it would change football if players had big fat sponsor logos across the their chests?   

[Male Voice] It would be a change of epic proportions.  I think in any sport you have a large base of purists that don’t want to see the game change too much and I don’t think we’re quite ready for that.   

DUBNER:  Michael, who is your favorite football team? 

MICHAEL:  The New York Jets.  

DUBNER:  The Jets.  Now how would you feel if the Jets came out next season with Budweiser on their chests or maybe Viagra?   

MICHAEL:  (Laughs) Um, I don’t think that’s in the best interest of the New York Jets franchise, their brand, their fan base or the NFL.  I’m cultivating a future New York Jets fan with my 5 year old son soon to be 6 year old son and it’s really easier for him to form a relationship with the Jets as a brand than with a malt beverage or a pharmaceutical drug. 

[Child’s voice] I think I can live with hit.    

DUBNER:  That’s not Michael’s son, that’s Philip Schneider, a 10 year old Buffalo Bills fan who was watching a game a couple of Sunday’s ago with his dad at Blondie’s, a sports bar in New York.   

SCHNEIDER:  Uh, I think I’m not really bothered as much because of the history and all that I really wasn’t like, you know, I’m growing up now, it wasn’t like I was growing up with the Bills, you know, it’s now so… 

DUBNER:  Dad, how about you?  How do you feel if the Bills come out next year with a corporate sponsor on the jersey? 

DAD:  If it would help them win I’d be all in favor of it. 

DUBNER:  The NFL Is the most successful sports league in history with revenue of about 9 billion dollars a year.  It likes selling ads and making money so why doesn’t it sell ad space on the one piece of real estate that football fans can’t help but see; the players themselves.  The answer is trickier than you might think.  It has to do with Peyton Manning, with Eli Manning and with Tevia. 

[Tevia] Tradition 

[Music] 

[Female voice] From WNCY, an American public media, this is Freakonomics Radio.  Today we hit you right between the numbers with a very forward pass; selling the most sacred spot in football.  Here’s your host Stephen Dubner. 

DUBNER:  It’s hard to think of a bigger pack of purists than British Soccer fans.  The English invented soccer and their premier league is still home to many of the world’s best players and teams.  Their fans are legendary, they follow their clubs around the country, around the world.  They care about their clubs more than they care about just about anything.  The same is true throughout much of Europe.  This devotion is evident by the number of people who wear team jerseys.  But you know what’s strange?  If you’re visiting Europe and you don’t know any better you might think, ha, that’s interesting, Vodafone has its own soccer team and Carlsberg Beer, even Unicef because that’s what you see on the chest of the jerseys in big bold letters, not the clubs name but the name of the corporate sponsor, the most lucrative deals bring in about 30 million dollars a year.   

Michael NEWMAN:  I’m Michael Newman, I’m the founder and President of New York City based Amplify Sports and Entertainment. 

DUBNER:  So, here’s the funny thing about Michael Newman; he’s the you heard from at the top of the show, the one who doesn’t want his kid to see a Budweiser logo on the Jets jerseys.  Do you want to know what Michael Newman actually does at Amplify Sports and Entertainment? 

NEWMAN:  We’re a sponsorship consulting agency and we buy and sell sponsorship for our clients.  I’ve been in the industry for almost 20 years and I’ve put together hundreds of sponsorship deals for Fortune 500 brands totally well over 150 million and I’ve worked on sporting events ranging from the Olympics to the Women’s Half Marathon here with the New York City Road Runners club and everything in between. 

DUBNER:  In 2006 Amplify helped put together the first major jersey sponsorship deal in North American Sports.  Real Sat Lake, a major league soccer team put a big Zango Juice logo on its players chests.  Now roughly three quarters of the MLS teams have similar sponsorship which brings in more than 2 million dollars per year for those clubs.  If the NFL went the same route, a guy like Michael Newman could make a lot of money.  Alright, pretend for a minute that I’m Roger Goodell, commission of the NFL, and we run into each other in an elevator and you tell me what you do for a living, you probably know what I do for a living; give me your pitch on putting corporate logos on NFL jerseys. 

[Male voice] Well, I’m going to probably tell me something, I mean, he’s already heard, I mean, just the upside in revenue opportunity for an NFL team and what they’re going to garner through an association with a corporation that wants their name on their jersey is going to set all sorts of records and I don’t know mean just domestically, I also mean globally.  If you look at some of the deals that have happened across the globe relative to some of the soccer deals with some of the premier global soccer brands, I believe that the upper tier NFL teams have the ability to execute deals at levels far greater than what we’re seeing elsewhere. 

DUBNER:  In European soccer for instance, the top 10 teams, their average jersey sponsorship money is about 17 million dollars a year.   

[Male voice] Correct. 

DUBNER:  Do you think the top NFL teams could do better than that? 

[Male Voice] I do.  I really do, I absolutely do.   

DUBNER: So let’s do a little math.  We’ll assume a fairly conservative average of 15 million dollars a year for each NFL team.  There are 32 teams in the league, that’s 480 million, nearly half a billion dollars a year the NFL Is leaving on the table, although they’re starting to scrape some of it off quietly into their laps.  Last season for the first time the NFL allowed teams to start selling sponsorship on their practice jerseys, not right across the front but a 3 ½ by 4 ½ inch patch on the left shoulder.  Teams have sold this space to everyone from AT&T to the local hospital network. 

[Male Voice] I think at the moment the view would be it’s okay for practice, it’s not going to happen in the game but as you know all ideas evolve. 

DUBNER:  That’s Mark Waller.  Don’t be fooled by his accent.  He grew up in Kenya, Hong Kong and Wales but now he works on Park Avenue in New York as the Chief Marketing Officer for the National Football League.  His international background helps him see his job not just in terms of what is but what might be.   

WALLER:  We never used to allow sideline advertising at all.  Now the game that we play in Wembly in the UK we have on field signage. We did it for a year and tested it and for the 4 years that we played there now, this will be the fourth year, we’ve allowed that to continue and we’re very comfortable with it now for the UK because that’s kind of how the UK culture works.  They’re used to sporting events where advertisers are on the field on the sideline and so I think we will always allow…we should always allow our thinking to be open and we should always take a view that any decision that we make is a decision for today.  

DUBNER:  During a typical NFL game the only visible sponsors on the field are those that the league says are related to the playing of the game itself so the Gatorade cooler, a little Reebok logo on the uniforms, the Motorola headsets, Wilson balls or Dell Helmets, but during the NFL’s once a year game in London that’s not the case.  The league gets to experiment just like they’re starting to experiment with corporate sponsors on practice jerseys.  Maybe just to gauge how outraged the fans were going to be.   

What’s that you say?  You didn’t hear about any of this outrage?  Yeah, neither did we.   

In a minute some of the men who helped run football teams explain why game day jerseys don’t have sponsors.   

[Female voice] From WNYC an American Public Media this Freakonomics Radio.  The office beer of Freakonomics radio is…well, we don’t have one…yet.  Here’s your host Stephen Dubner. 

DUBNER:  If the NFL put a corporate logo on its game jerseys it could bring in hundreds of millions of dollars a year.  You’d think the players themselves would love this idea, after all, they get a cut of lead revenues but listen to Keith Gordon, the President of NFL Players Inc. the marketing arm of the players union. 

Keith GORDON:  You know, from our perspective I think it’s something we certainly have a cause for concern. The reason being if an NFL player has a sponsor logo on his jersey it could simply prevent him from actually acquiring another deal with let’s say another competitor.  So whether a player is prevented from getting a deal today or tomorrow or even a deal that could last him 2 or 3 years into his uh, you know, departure from football into his post football career, anything that’s going to do that we’re obviously going to have an issue with.  

DUBNER:  New York Giants quarterback Eli Manning is one of the NFL’s highest paid players.  He’s also got his own set of commercial endorsements; one of them is for Citizen Watches.  The Giants recently signed a far reaching sponsorship deal that includes logo patches on the team’s practice jerseys but there’s one problem; they signed it with a different watch company…Timex. 

GORDON:  Once the team decided to throw another competitive brand on the jersey, it essentially nullified the deal that Eli Manning had with his sponsor so what Eli finds himself doing is not being able to deliver 100% on the commitments that he’s made to his sponsor because of what the team has done with the practice jersey. 

DUBNER:  What happens in a case like that?  What are the conflicts that need to be resolved there? 

GORDON:  Like any sponsor who’s put out a lot of money for a player to be their endorser, the player is not able to completely make good on all the commitments for which he signed in the contract, then obviously reparations of some sort must happen and to the degree that that’s going to prevent in this particular case, Eli from either getting additional opportunities or being able to fulfill those that he currently has, you can do the math and put together what those reparations could potentially be.   

DUBNER:  Reparations?  Ouch.  Much as we’d like to do the math, those numbers aren’t public but we do know this; when Eli Manning signs a deal with Citizen Watches, most of that money flows to Eli Manning.  When the New York Giants sign a deal with Timex, the team is taking a big cut.   

The king of all NFL endorsers is Eli’s big brother Peyton Manning.  He earns an estimated 9 million dollars a year off the field.  You’ve probably seen him in those Sony ads on TV.  But what if Peyton’s team, the Indianapolis Colts, sold space on their jerseys to say Panasonic?  Peyton Manning suddenly becomes a lot less attractive to Sony and if you’re Peyton Manning this starts to look like some kind of a socialistic wealth redistribution scheme where the money that used to go directly to you is now being spread among your 52 teammates robbing Peyton to pay Paul and Dwight and Dushay.   

So that’s why some players…at least the big dog players and the people who represent them…might not want jersey sponsorships.  But what about the league?  It’s extra money right?  Not quite.  As the NFL’s Mark Waller explains, there’s the fear of cannibalization.  The league currently sells more than 4 billion dollars a year in TV rights, money that the TV networks recoup by selling commercials so the half billion dollars a year that could come from selling jersey sponsorship might not be represent new money at all, it might just be siphoned off from an already sweet deal.  

WALLER:  I think that the best comparative value you could get is the 4 ½ billion dollars that we currently get from our broadcast partners for the rights to our game.  So if you were going to do a very simplistic equation you’d say at the moment the marketplace is valued that time and that content at 4 ½ billion dollars.  But I think at the moment we’d be very comfortable that the model that we’ve got more or less and we obviously every year we look at it and we do it but more or less strikes the right sweet spot for us of keeping all of those factors in balance.   

DUBNER: There’s one more big reason that your team hasn’t plastered its jerseys with an ad yet…it’s a single word.  You talk to anybody associated with the NFL for more than a few minutes and this word will come up.  Take it away Tevia. 

[TEVIA] Tradition.  

Joe ELLIS:  Joe Ellis, Chief Operating Officer of the Denver Broncos.  

DUBNER:  You’re one of two lucky teams that gets to go to London this year to play an NFL game, the one annual game, you’re playing the 49er’s on Halloween and now this is an audience there in the UK who’s very accustomed to seeing their sports teams, their beloved soccer players wear on the jerseys not a team name, nothing on the front but a corporate sponsor.  So, you’re the COO of the Denver Broncos, you gotta think boy, for this one game only, wouldn’t it be lovely to sell the naming rights on our jerseys in London and pick up an extra few million dollars.   

ELLIS:  I don’t think our owner would look at it that way and I don’t think I would either because I think the tradition of the league and how it presents its product on the field comes first and right now today I don’t think the owners collectively who would make this decision for something like this, to allow this to happen, to have corporate sponsorship on a jersey that is worn on game day, I don’t think they’re prepared to do that yet.  I’ve said that some day it may happen and I’ve said that I probably won’t be around to see that happen but for now today I think they respect the tradition of the game and the tradition of the uniform, it’s formality, how it’s presented to the public on the field and while they have allowed it to happen in our practice jerseys here that we wear, I don’t see it happening anytime in the near future on the field for regular games.   

DUBNER: Is that your suspicion or is that your hope as well.  In other words, do you as a COO Of a very successful NFL team feel that it’s a step too far? 

ELLIS:  I’m of the camp that we shouldn’t do that.  I think the tradition of the uniform and how its present to the public both in the stadium and on television has some long standing value and to go the other direction I think at this time is not the right thing to do. I will tell you that if you did to it people would get over it very quickly. 

DUBNER:  Did you catch that?  People would get over it.  Joe Ellis doesn’t think this will happen in his lifetime but NFL teams might be less afraid of breaking this kind of tradition than they’re letting on.  When the Denver Broncos replaced the beloved Mile High Stadium with a new stadium who’s naming rights were sold to Invesco, it was Joe Ellis who took the heat.  

Here’s another team official, Jerry Jones, Jr., Chief Sales and Marketing Officer for the Dallas Cowboys, the team his father owns.   

So here’s the 64 million dollar question:  Why don’t NFL teams have corporate sponsorship on their game day jerseys the way European soccer clubs do? 

Jerry JONES:  Well, uh, first I would say that we do and what we have is on our jerseys as of right now it s Reebok and so we do have branding on our jerseys with our apparel manufacturer. 

DUBNER:  And do you feel there’s an opportunity there though well beyond Reebok but what about if the Dallas Cowboys could across the breast of that beautiful white jersey have; you fill in the blank, the biggest corporate sponsor you could imagine.  Does that seem like an opportunity that you’d like to be able to take advantage of? 

JONES:  Well, I think always you’re looking at opportunities to generate revenue and as we know that’s what we’re in the business of doing to help us field a competitive team in the National Football League.  I think that when you look towards what we are doing from a sponsorship standpoint, specifically your question with our jerseys, there’s a philosophy that less is more. 

DUBNER:  Alright, fair enough.  I gotta tell ya, I’m a little surprised only because a few people in the league said if anybody would go for the idea of a sponsorship on a jersey it’s going to be the Dallas Cowboys.   

JONES:  I’ll take that as a compliment and our organization and our family will take that as a compliment that we do try to get aggressive and when it comes to the marketing of the sport and generating revenue we do try to push the envelope and be creative but we also firmly believe in the integrity of the game. 

DUBNER:  Jerry Colangelo has owned everything from a major league baseball team, the Arizona Diamondbacks to an arena football club.  He’s still the chairman of the Phoenix Suns, the NBA team which also runs the Mercury, a WNBA franchise.  Last season the Mercury became the first American basketball team to put a big sponsor logo right across the front of their jerseys.   

So you’ve had experience with many, many professional sports leagues.  They all have their own culture, their own history, their own way of doing business.  Which league do you think of the four major professional men’s team sports, which one do you think would be the first to embrace sponsors on jerseys? 

Jerry COLANGELO:  Um, NBA, NHL and then I would put the NFL and MLB behind those two.   

DUBNER:  So the odds of our seeing a Citigroup logo on the New York Yankees pinstripes, you think that’s quite a ways down the road? 

COLANGELO:  Not necessarily.  At the right price they could jump from fourth to first.   

DUBNER:  [Laughs]  What I’m guessing is that the future where we might see every player in the NFL plastered wall to wall with logos like a NASCAR car, you know, the offensive lineman’s right shoulder is sponsored by Ben Gay let’s say and the wide receiver’s gloves are in Allstate’s Good Hands.  I gather that’s a ways off. 

COLANGELO:  But wait a minute, I’m multiplying those numbers in my head, it sounds pretty good so far.  You know, I think this, I think we live in a time and society where advertising is all over the place and sponsorship is such a big part of the economics of sports that I think we will continue to see more and more proliferation, I think leagues will always try and maintain as much as they can in the way of legacy, history, tradition and keep a clean uniform but I don’t think there’s any question that as time goes by and the demands are as great as they are that we’ll see more and more sponsorship attached to the uniform in all sports.  

DUBNER:  Jerry Colangelo is 70 years old.  He’s seen enough time go by to know that professional sports are a money magnet.  Football’s finances may be in fine balance now but the pressure for new revenue, for new ad inventory probably won’t subside.  If Jersey logos to happen, are you really going to turn off the TV on Sunday or as the Bronco’s Joe Ellis says; will you just get over it?  Yeah, some part of the game might take a little bit of getting used to.   

[Male Voice] Manning back to pass, has a man open down field, it’s a key nicks, Manning to nicks, touchdown, Manning putting that ball right between Nicks’ number and the Chevy Logo on the front of his Jersey.   

[Credits]