New MLB CBA to Allow Uniform Sponsorships

On March 10, Major League Baseball (MLB) and the MLB Players Association agreed to terms on a new collective bargaining agreement, ending a 99-day lockout that was the first official MLB work stoppage since 1994. As part of the new CBA, both sides agreed to allow MLB teams to sell advertising positions on team jerseys and player batting helmets.

The addition of uniform advertisements creates an exciting new opportunity for a sponsor or brand to secure rights to a premier, highly tv-visible sponsorship asset. The appeal of significant brand exposure afforded by such assets amounts to a sponsorship value – in exposure and brand association –generally considered to be second only to the venue naming rights partner. And from an MLB team’s perspective, the addition of uniform advertisements creates an extremely lucrative source of additional sponsorship revenue.

MLB is the third U.S. professional sports league in just five years to open the door to uniform advertisements. The NBA’s jersey patch program, which began in 2017, reportedly generated an estimated $225 million of additional sponsorship revenue for NBA teams during the 2021-22 season. The NHL began allowing helmet decal advertisements for the first time this season, and it has reportedly generated an estimated $100 million of additional annual sponsorship revenue for NHL teams. The success of the NHL’s helmet decal program has proven to be so valuable that NHL will reportedly allow NHL teams to also sell jersey patches beginning next season. Finally, MLS – which implemented front jersey advertisements in 2006 – introduced a four year pilot program to add right jersey sleeves in 2020 to uniform advertisement space. The NFL is now the only major U.S. professional sports league without announced plans to allow any form of uniform advertising.

The specific details of MLB’s uniform sponsorship program have yet to be released. However, with initially reported estimates that the jersey patch and helmet decal sponsorships will generate upwards of $170 million of additional annual sponsorship revenue for MLB teams, it would not be a surprise if MLB teams quickly begin to take advantage of this new opportunity once it is permitted under the new CBA.

ArentFox Schiff has one of the most experienced and diverse sports law practices in the country. We regularly advise organizations in football, baseball, basketball, tennis, cycling, hockey, soccer, wrestling, collegiate and high school sports, and the Olympics on an array of issues, including arena and stadium leases and licenses, team relocations, naming rights and other sponsorship transactions, team acquisitions and sales, financings, media rights, technology agreements, and intellectual property matters. Our experience encompasses fantasy sports, gaming, and esports, where we advise clients on many issues, including gambling law, compliance, commercial contracts, and intellectual property. We represent professional sports teams and purchasers and sellers of sports franchises, both major and minor league. We advise on all legal issues related to sports arenas and stadiums. Our experience also encompasses the cutting-edge territory of fantasy sports, gaming, and esports where we advise clients on a variety of issues, including gambling law, compliance, commercial contracts, and intellectual property. In the past several years we have become a leading resource in the fields of cryptocurrency, non-fungible tokens (NFTs), and name, image, and likeness (NIL).


Continue Reading