Major League Soccer will allow teams to sell new endorsement space on jersey sleeves

Key Points
  • MLS Commissioner Don Garber tells CNBC the league has approved the sale of a sponsored sleeve patch on club uniforms starting immediately.
  • The move, confirmed Wednesday, could bring in up to $2 million a year per team, according to sports marketer Chris Weil.
  • The NBA brings in about $9 million a year per team for selling sponsorship on the front of players' jerseys, Weil says.
Professional soccer will now allow its clubs to sell a patch located on the right sleeve of uniforms where the MLS patch currently is located. The sale of the patch represents a new revenue opportunity for MLS
Source: MLS

Major League Soccer is making new real estate available on players' jerseys starting in 2020.

The professional soccer league has approved the sale of a sponsored sleeve patch on club uniforms starting immediately, MLS Commissioner Don Garber told CNBC on Wednesday.

That little patch could amount to some big money, about $1 million to $2 million a year per club, according to Chris Weil, CEO of the sports marketing firm Momentum. The NBA, by comparison, makes an average of about $9 million per team from corporate sponsorships on the front of players' jerseys, he estimated.

"The sleeve patch is a premium opportunity for brands to be connected in a significant way with MLS and our teams across the U.S. and Canada," said Gary Stevenson, president and managing director of MLS business ventures. "Our clubs will determine the best way to package and price this asset, but we anticipate that it will serve as a foundation for a broader relationship with a corporate sponsors in each market."

GumGum Sports, which calculates the value of sponsorships, predicts the league can expect tens of millions of dollars in additional "media value" per season.

"Overall, we predict upwards of $30 million of media value, league wide, amongst 23 teams with the potential to grow substantially as the MLS social footprint grows over time," said Jeff Katz, vice president of strategy for GumGum.

The patch, 2.5 x 2.5 inches, will replace the existing MLS logo on the right sleeve as part of a four-year pilot program available to the league's 23 clubs.

As for fan merchandise, it will be up to the clubs to decide whether to include the sleeve patch on authentic and replica items that fans can purchase.

"I think all things indicate that the league is growing and getting bigger. This is just one more sign to be bullish on soccer in America," said Bob Dorfman, sports marketing analyst at Baker Street Advertising.

This new revenue opportunity comes at a time when Major League Soccer is seeing big growth. Attendance has been its strongest in the league's 23-year history, and club valuations are up 20 percent over the last year, with the average club valued at $233 million.

Weil said the MLS audience skews Latino and consists largely of millennials — a lucrative demographic for advertisers.

Both experts agree that for start-ups and local companies, the patch deals are a good way to get national attention and reach targeted audiences.

The new revenue will also be a way to help cover payroll and operating costs.

"Live experiences are the one thing that are keeping people engaged. As that continues to grow, people will find new inventory to sell," said Weil.

Wayner Rooney sports the new MLS jersey. 
Source: MLS