By Frank Pingue
(Reuters) - The National Basketball Association became the first major North American sports league to announce plans to put ads on jerseys in a move that opens up a significant new revenue stream.
A three-year trial beginning with the 2017-18 season was approved by NBA owners on Friday that allows the league's 30 teams to add a small patch on the front left of game jerseys.
"Jersey sponsorships provide deeper engagement with partners looking to build a unique association with our teams and the additional investment will help grow the game in exciting new ways,” NBA Commissioner Adam Silver said in a statement.
"We’re always thinking about innovative ways the NBA can remain competitive in a global marketplace, and we are excited to see the results of this three-year trial."
NBA teams are responsible for selling their own sponsorships and the patches will be about 2.5 inches by 2.5 inches, much smaller compared to European soccer jerseys, where corporate logos are the largest and most prominent part of the kit.
According to the NBA, the sponsor patch will not appear on the retail versions of the player jerseys but teams can sell the jerseys with sponsor patches in their own retail outlets.
"The patches are a little small for people to see from the second deck of an arena," Marc Ganis, president of Chicago-based consulting firm Sports Corp, told Reuters.
"This is more related to broadcast media, highlight shows, photographs, posters and other kinds of merchandise with players in uniform."
Financial terms of the pilot program were not disclosed but sports industry analysts say teams will likely make $4 million to $6 million per year from new partnerships, which would equal a combined $120 million to $180 million per year in new revenue.
The National Football League, Major League Baseball and National Hockey League did not immediately respond when asked by Reuters if they had any similar plans to add sponsorship patches to their uniforms.
But Robert Boland, director of the MBA and master's sports administration program at Ohio University, feels other leagues will likely follow suit at some point.
"The NBA has always been keenest of the (North American) leagues to get to this point," said Boland. "I suspect that this will begin to open the doors to this (concept) in North America."
(Reporting by Frank Pingue in Toronto; Editing by Andrew Both)