Advertisements Are Coming to NHL Jerseys, For Better or For Worse

(Image via Montreal Canadiens)

Much to the chagrin of many traditionalist hockey fans, NHL teams will be sporting advertisements on the chests of their jerseys this upcoming season. A survey conducted by the NHL revealed that a majority of its teams were in favor of jersey ads, and last year, the NHL’s Board of Governors formally voted to approve jersey advertisement patches.[1]

The advertisements must fit within a rectangle of 3 inches by 3.5 inches – slightly larger than the 2.5-by-2.5-inch space reserved for jersey advertisements on NBA uniforms.[2] It is likely that the location of the ads will be left up to the individual clubs.

The league is “pleased” with the early results of the jersey patch sponsorship program, according to Senior Executive Vice President and Chief Business Officer for the NHL, Keith Wachtel. Wachtel projects that the 32 teams are on pace to generate “significantly more” than $100 million in revenue (average sponsorship fees thus far reportedly range from $5 million to $10 million per year).[3] [4] To this point, only eight clubs have officially confirmed and unveiled their jersey sponsorships. Nevertheless, “the revenue generation for the clubs that have secured sponsors has outperformed our expectations,” Wachtel added.

Experts and third-party sales executives representing NHL teams have been somewhat underwhelmed with the early figures, however. Many estimated that higher-profile teams would be able to command at least $10 million annually, though most organizations will likely agree to mid-seven-figure deals. The crowded marketplace for sports uniform sponsorships has been viewed as a “hurdle” for the NHL, as MLB teams will begin wearing jersey ads next season, and several NBA teams are either seeking or renewing partnerships.[5]

Confirmed NHL Jersey Patch Partnerships

(Graphic via Sports Business Journal)[6][7]

In-game uniform advertisements were introduced in the NHL for the first time during the shortened 2020-21 season, purportedly as a means of recouping some of the losses incurred during the COVID-19 pandemic.[8] These ads were placed on both sides of players’ helmets, controversially replacing the logos of the clubs; helmet ads will remain this season, and for the foreseeable future. The NHL has allowed ads on practice jerseys since 2010, and utilized shoulder patch advertisements during the 2016 World Cup of Hockey (tournament in conjunction with the NHLPA).

The jersey is especially valuable real estate for advertisers. “There are probably two really dominant opportunities from a partner standpoint, when you take a look at investment levels. I think one is naming rights to an arena. The second one is participation in jersey entitlement,” noted Van Stone, President of Business Operations and Chief Commercial Officer for Monumental Sports & Entertainment (which owns and operates the Washington Capitals).

Wachtel explained that every deal will differ to some degree, with the nature of the given market playing a substantial role. “One thing to keep in mind is they’re using the jersey for generally new partnerships, which is incremental revenue. They’re using it as part of a broader relationship. It’s not just for the jersey – it includes other assets in the building, media assets, hospitality, all of that.”

Another key to the earning potential of this program is the fact that teams are permitted to sign multiple jersey advertisement deals, by way of partnering with different brands for home and away jerseys. Wachtel also pointed out that clubs are highly interested in sponsorships from global brands, as the NHL is a league filled with talent from around the world, and has a significant international reach.

As is evidenced by the (fitting) sponsor of the Vegas Golden Knights, sportsbooks may advertise on jerseys, so long as sports betting is legal in the given club’s market. Cryptocurrency is also a more-recently approved category.

Not all clubs are expected to reach a jersey advertisement agreement before the beginning of the regular season, and there is a chance that some clubs forego a jersey sponsorship for the entirety of the season.

Of course, the announcements and revelations of these jersey patch ads have been met with mixed reactions from fans. The NHL had expressed a relative disinterest in jersey advertisements for years. In fact, in 2015, Commissioner Gary Bettman said that he was in “no rush to put advertising on our sweaters. I like the history and tradition and the way they look.” He even went as far to say, “I’ve repeatedly said we wouldn’t be the first and you’d probably have to bring me kicking and screaming.”[9]

Well, whether it was the financial pressure of other pro sports leagues establishing new revenue streams by way of lucrative uniform advertisements, or the financial impact of the pandemic itself (or a combination of both), Bettman has apparently done his kicking and screaming. It appears extremely unlikely, considering the success of the helmet ads and the early satisfaction of the jersey patch program, that these jersey ads are going anywhere anytime soon, either.

Paul Lukas, the founder of UniWatch, a blog dedicated to sports team uniform design, told SportsNet, “I’m disappointed by uniform ads pretty much in any sport, not just hockey, but I think particularly in hockey because the hockey sweater just seems to have a greater mystique than jerseys in other sports.”

Lukas noted that the NHL has done a good job up to this point of preventing jerseys from being “cluttered,” but he worries about what is to come. “Is it the end of the world? No. We’ve seen it in the NBA and other sports. But it’s part of sort of a drip, drip, drip, or a death-by-a-thousand-cuts kind of thing – things that all make sports a little less enjoyable, a little more annoying.”[10]

He went on: “in hockey, you have this big iconic logo, and I think it’s a shame that that logo is now going to have to compete or be sort of diminished slightly by, or be distracted by or interrupted by, an ad logo – a different logo that has nothing to do with the team. . . I think it cheapens and waters down that bond between uniform and fan, and between team and fan.”

For a league that is supposedly facing financial hardship already, it will be noteworthy to monitor whether some of the sport’s most passionate, dedicated fans are indeed deterred by these jersey ads. Will these newly-created revenue streams be worth it if fans begin feeling detached from their teams, and engage quantifiably and impactfully less with these teams across the board? Lukas (and Bettman) rightfully point out the mystique and tradition of the hockey sweater. It is a unique and beautiful uniform style, with a number of truly classic logos and designs that have endured the more than 100-year history of the NHL. Some fans may feel as though the sanctity of these uniforms has been tarnished, to some degree.

This crowd of displeased fans is fairly concerned with the “drip, drip, drip” notion that Lukas alluded to. European hockey league uniforms, notoriously, are often covered with advertisements from head-to-toe. Lukas does not expect that the NHL will ever come close to this point.

He does, however, believe that a “soccer-like approach” is very possible – “where essentially the advertiser’s logo or name kind of takes precedence over the team brand. I think that’s a concern in all North American sports. All you have to do is look at the WNBA or the G League, whose name itself is an ad . . . you can sort of see a more soccer-like approach, where the team name is subservient, often, to the advertised name.”

The NHL will presumably never be able to compete with the likes of the NFL, NBA, and MLB in terms of revenue, based purely on the more niche nature of the sport of hockey. It is a financially imperfect league, and creativity is required to generate new revenue streams. This naturally conflicts with the oft-traditional hockey culture, especially when these streams are created by altering, and arguably detracting from, an article as revered and as sacred as the jersey.

The balance that fans must strike is whether this one –  for the time being –  alteration makes the game that much less enjoyable and that much more annoying, as Lukas put it, to the point that they will reduce their viewership, spending, and overall involvement. It sounds a bit dramatic to suggest that a small patch could induce these behaviors, but this is a true risk assumed by the league – one that they are well aware of. Wachtel expressed this recognition, saying that, initially, fans will have the option to purchase jerseys with or without the brand’s advertisement patch. This mitigates the merchandising aspect of this program, but it fails to address the potential detachment fans may experience when viewing the ads in-game.

Almost certainly, there will not be a noticeable or significant decrease in fan engagement. But the NHL knows that it has rolled the proverbial dice with regards to fan reception of the jersey advertisement program. The league is banking on the loyalty of its most devoted fans to overcome any initial feelings of disappointment or distaste. This is likely a good bet, and it is undoubtedly a strong financial move. Be that as it may, there is a considerable possibility that the league loses some portion of its goodwill with hockey purists; and although that portion may not be substantial this time around, each successive “drip” presents an additional risk assumed by the NHL.


Resources

[1] https://www.espn.com/nhl/story/_/id/32039451/nhl-team-jersey-fronts-ads-starting-2022-23-season-source-says

[2] https://www.sportico.com/business/sponsorship/2021/nhl-jersey-ads-approved-1234637203/

[3] https://www.sportsbusinessjournal.com/Journal/Issues/2022/07/18/Upfront/NHL-jersey-patches.aspx

[4] https://www.yahoo.com/lifestyle/nhl-jersey-ads-what-patch-each-team-wearing-165635986.html

[5] https://novacapsfans.com/2022/07/18/mixed-bag-so-far-for-nhl-jersey-ad-sales/

[6] https://www.nhl.com/wild/news/tria-patch-announcement/c-335191376

[7] https://montrealgazette.com/sports/hockey/nhl/hockey-inside-out/canadiens-will-be-sporting-rbc-patches-on-their-hallowed-jerseys#:~:text=Sports

[8] https://www.sportico.com/business/sponsorship/2021/nhl-jersey-ads-approved-1234637203/

[9] https://nhl.nbcsports.com/2015/01/30/bettman-would-be-kicking-and-screaming-before-nhl-jerseys-have-ads/

[10] https://www.sportsnet.ca/nhl/article/inside-the-first-deals-of-the-nhls-jersey-advertisements-era/

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3L at University at Buffalo School of Law; BSELS Co-Vice President

MBA in Marketing;

In pursuit of a career at the intersection of sports law and sports business, specifically in professional hockey.

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