Recognizing the "Giannis Impact" in enterprise growth, Milwaukee Bucks is revising its equipment patch plans
Giannis Antetokounmpo of the Milwaukee Bucks
Gregory Shamus | Getty Images
The Milwaukee Bucks have attributed a surge in goods sales to Giannis Antetokounmpo.
Moments after the incumbent National Basketball Association MVP posted on his Instagram account that he would be on the team until at least 2026, the "Giannis Effect" accelerated, particularly with regard to a critical good.
In the first 18 hours since Antetokounmpo's move, the Bucks said they saw 1.3 million video views on social media channels and saw online goods orders increase by 186%. The team added that 85% of its retail sales came after reporting the move on Twitter, and 55% of the items purchased were Antetokounmpo goods, according to Bucks.
Perhaps the most significant impact on team business due to Antetokounmpo's decision was the negotiating table around the jersey patch.
"The phone calls started two-way," said Matt Pazaras, Bucks chief business development and strategy officer. In an interview with CNBC Thursday, Pazaras said the Bucks deal "generated a lot of activity". The team patch deal with Harley-Davidson expired after last season.
In November, Peter Feigin, president of Bucks and the team's arena, Fiserv Forum, told CNBC that the team was on the verge of attracting a new sponsor for the patch, which they expect to do this month.
After Antetokounmpo agreed with the Bucks on Tuesday for a five-year extension of $ 225 million that marked the NBA's Supermax deal, Pazaras said demand for sponsors for the new patch had increased and the team returned Obtain sponsorship offers.
Prior to the renewal, Pazaras said potential sponsors are on "wait and see" mode in order to sign a long-term patch contract with the team.
"Our message was the same as (General Manager) Jon Horst brought out." We are feeling good with Giannis and it would be a good time to get the deal because there would be a lot more interest afterwards, "said Pazaras. "I got the feeling people would rather pay the premium knowing Giannis is locked up than take the chance with us if he doesn't sign again."
The NBA generated approximately $ 150 million in additional revenue from its patch program, which was introduced for the 2017-18 season.
Pazaras didn't discuss details of the value of the Bucks patch, but veteran marketing manager Tony Ponturo estimated that some patch assets represent a "$ 5 million opportunity right now" and that it will be a buyer's market if Companies tackling the Covid-19 pandemic.
But the Bucks, owned by Avenue Capital CEO and chairman Marc Lasry, will beat that price as Antetokounmpo is tied to itself for the long term.
LeBron James from Team LeBron and Giannis Antetokounmpo from Team Giannis pose for a picture after the 2019 NBA All-Star Game
Nathaniel S. Butler
International star power
Sponsors sometimes pay a lot of money to get their logos on a jersey.
The Stephen Curry-led Golden State Warriors have an approximately $ 20 million annual agreement with Japanese e-commerce company Rakuten.
The Los Angeles Lakers' estimated $ 12-14 million per year patch is likely to be on the agenda with LeBron James, and the Brooklyn Nets should also see more weight on their new patch deal with Motorola (most recently valued at 8 million US dollars per year). with the return of Kevin Durant.
The Bucks are likely to charge $ 10 to 15 million, with Antetokounmpo safe now. The team is again represented in the NBA line-up on Christmas Day this year and plays the Warriors. The national TV trend is expected to continue with the international star.
The Bucks hired Chicago-based research and evaluation firm Navigate, which tracks the effectiveness of its patch impressions, to provide data to sponsors. According to Pazaras, partners are aiming for national viewership and brand exposure on social media accounts outside of team channels. The postseason generates even more income.
"That's one of the most important metrics that we're showing, the value it has of going further in the playoffs," said Pazaras of the global reach that the NBA playoffs offer.
The Bucks will likely structure their new deal to include bonuses that companies pay for post-season presence. Calling it a "round media rating", Pazaras said it had "become common to have playoff bonuses for every round in the deal". More and more NBA teams are entering into agreements in which sponsors pay more for the patch as the teams advance.
Pazaras said the team has about 30 companies watching the Bucks patch and five companies are in "serious talks."
The patch deal could include signage options in the arena as well, but the NBA team presidents are relying on the newly installed international marketing to add value as well.
Teams can now designate up to three corporate partners who can freely use their intellectual property outside of the US and Canada. Again, the "Giannis Effect" will support the team as its global appeal is one of the best in the league.
"It has grown so big that it's all of Europe and especially Asia," said Pazaras. "The Philippines is a huge market for us. Giannis has become a global icon. He has grown so big.
"Giannis always brags that he was the best salesman in Greece," added Pazaras. "And now we're trying to make him the bucks best seller. He helped us on Tuesday. I can tell you that."