Jerseys: The Hidden Jackpot in Sports

Sports and Athletics have become major parts of today’s society. From basketball to soccer, there is a large amount of sports played across the globe. Not only this, but there are many different levels of these sports, such as college and professional. Many people devote their lives to these sports, becoming involved on some level or another. But most watch from the sidelines, cheering on their favorite team, wearing a jersey or team jacket. That is the focus for today: Jersey’s.

Now, everyone knows about traditional jersey marketing, like the company putting their logo on the shirt to reinforce their product or something along those lines. But what many people don’t realize is where the money goes when they buy their product. Some may believe that the money goes directly to the player, some believe the money goes to the team, but the fact of the matter is that most of the money goes to whichever company has hade a deal with that branch of the sport. In sports such as soccer, individual teams often sign with a brand, whereas in in the US, entire leagues such as the NBA or the NFL sign with a brand. For example, Nike has a deal with the NFL. Often what happens is that the company pays the league to allow for the deal to come through because of how big the profits are. In that same Nike deal, Nike paid over 1 billion dollars to make the arrangement.

Now, you may be asking why on earth companies would want to pay over a billion dollars to sell profits. The simple answer to that is how large the profit margins are. When these deals are made, a monopoly is created at the same time. For example, in the example mentioned, no other company aside from Nike could produce or sell the NFL jerseys, meaning that Nike solely dictates the price. This also eliminates any kind of market competitiveness once the deal has been made. The result of this is that companies are able to produce jerseys for very little money, typically under ten dollars, but then sell these same jerseys for hundreds of dollars, depending on the player. It’s this incentive that causes companies to pay over a billion dollars to produce a league’s jerseys.

The overall message here is that jerseys are many of these companies’ best forms of subliminal marketing. The fact of the matter is that these deals, despite the cost, often come out with gains for the companies, with sales in 2016 for the NFL being 7.8 billion. While a portion of this does go to the league itself, this still often leaves the companies with over double the money they invested into the sales. Companies often do a minimal amount of advertising on the jersey’s themselves, as typically however well the players play determines how well the jerseys sell.