- TikTok will have a sleeve patch on the jerseys of the MLS Portland Timbers and its sister club, Thorns FC of the National Women's Soccer League, the company announced Tuesday.
- The deal's terms were not provided, but MLS sleeve patch deals are projected to reach $1 million per year for teams.
- The ByteDance-owned company already has partnerships with the New York Yankees, NASCAR driver Ryan Vargas, mixed martial arts firm UFC and overseas soccer clubs.
With the political firestorm around TikTok having dissipated a bit, the social media app continues its expansion into the U.S. sports landscape.
TikTok, which is owned by Chinese firm ByteDance, announced Tuesday it's now a jersey patch sponsor for both Major League Soccer's Portland Timbers franchise and sister team Thorns FC of the National Women's Soccer League. The agreements start in the 2021 seasons.
Terms of the partnership were not provided. According to some projections, MLS clubs can usually expect about $1 million per year for patch sponsorships.
In an interview with CNBC on Monday, Mike Golub, the Timbers' president, called the pact an "equal partnership." He declined to reveal specific numbers of the multiyear agreement but said the valuation is slightly more than a $1 million estimation, as TikTok has the patch on two teams.
"It will be on the high end of the value of patches that have been sold in the MLS and NWSL," Golub said, mentioning the longevity of the patch on jerseys, which will also be sold with the patch to fans on team-run properties.
"What makes this unique for us, it's about the lens at which we view this partnership," Harish Sarma, TikTok director of global strategic partnerships, told CNBC. "The concept of a joint patch partnership across both the men's and women's game and picking two storied franchises, that's a first for us, and we think it's a first for sports in general."
MLS commenced its jersey patch program last January, allowing clubs to place 2.5-inch-by-2.5-inch company logos on the right sleeve of game jerseys. Clubs can only add the sleeve patch if they've already secured a primary sponsor, which has the main logo on the front of a jersey.
The Timbers' top sponsor is currently Alaska Airlines.
As part of the club's agreement with TikTok, the company will have a presence via virtual signage and digital platforms of both clubs. The deal allows the teams to produce weekly content, including highlights and behind-the-scenes footage on TikTok.
To make up for the nearly $1 billion in losses due to Covid-19, MLS created a patch slot on the left sleeve too. Golub said the team is undecided on whether it would make that slot available should MLS officially approve its return in 2021.
"We'll think about what or if anything we'll want to do with it," he said.
TikTok survived a hectic 2020 as it found itself in the middle of a U.S.-China feud. ByteDance was forced to sell its U.S. TikTok operations to Oracle and Walmart by former President Donald Trump, who pushed for efforts to address potential security concerns about Chinese tech companies. But the transaction has been delayed after several courts struck down the ban on the app and the new Biden administration reviews the situation.
Though TikTok battled geopolitical drama, Sarma said it didn't impact partnership discussions with U.S. sports clubs.
"What you're seeing is more partners understanding the value and frankly us getting to a place where our goals are aligned with those partners," he said. "It's a sign that it's business as usual and as it has been."
TikTok also recently announced a deal with mixed martial arts firm UFC to produce exclusive livestream content. Sarma said TikTok is engaged in more conversations with clubs about potential patch partnerships, especially with National Basketball Association teams looking for new deals.
"Whenever you have any announcement of the magnitude that we've had recently, it's inevitable that there is going to be interest from all corners, whether that's NBA teams or teams from other leagues," he said. "Those are going to happen. We're not surprised by the interest, and that's going to continue."
He added sports fans on TikTok usually seek National Football League, NBA and soccer content and have suggested the users want more, which is why TikTok will center its strategy around those sports.
In August, TikTok revealed its number of monthly active users had grown nearly 800% since January 2018. More than 100 million Americans are monthly active users today, and the firm said it has 50 million daily U.S. users. That gives sports teams who partner with the mobile-video platform brand exposure and access to a Gen Z social media crowd.
"We're building up our offering across every vertical," Sarma said when asked about TikTok's 2021 plans for sports partnerships. "There is more coming."