Early Entrants: Vol. VII - Sponsor Logos Coming to MLB Uniform Sleeves in ‘22

JohnWallStreet

Editor Note: Early Entrants is a bi-weekly series of sports business “rumblings” before the news breaks.

Sponsor Logos Coming to MLB Uniform Sleeves in ‘22

When the Cincinnati Reds “hosted” the St. Louis Cardinals for a 2-game set in Monterrey, Mexico last weekend, both clubs adorned the Ford logo on their batting helmets. The league officially says it has no plans to put corporate advertising on helmets (or jerseys) for non-international games, but JohnWallStreet has been told to “expect logos on MLB uniform sleeves - domestically - in ’22.” We’re hearing that MLB needs to bargain with the players on a few issues and they know that they’re going to have to give the MLBPA something in return for their blessing [to put sponsor logos on uniforms], so they’re targeting the ‘21 CBA negotiations (current CBA expires following ’21 season) to do it.”

Charlotte or San Diego to Land MLS' 30th Franchise

On Friday, MLS announced plans to expand to 30 clubs (27 have been awarded to date). While the league has not yet selected its 28th and 29th markets, the league’s Board of Governors has authorized the Commissioner’s Office to advance discussions with Sacramento and St. Louis. Soccer fans in those cities can put the champagne on ice, it’s a “foregone conclusion” they’ll be awarded expansion franchises. That would leave Detroit as the lone finalist for franchise numbers #25 and #26 still without a club, but according to our sources the wait will continue; we’re hearing that franchise #30 will eventually be awarded to either Charlotte or San Diego and that the expansion fee could actually jump another $50 million to $250 million.

CBA Encourages NFL Owners to Maintain Minority Ownership in OLE

Just a couple of weeks ago reports indicated that Endeavor had agreed in principle to acquire the 80% of On Location Experiences owned by RedBird Capital, Bruin Sports Capital and Carlyle Group for a figure upwards of $700 million; with the NFL retaining their 20% stake. The NFL generates 40% of OLE’s profits, but league was never a threat to re-acquire the majority stake it sold to the P.E. firms - for $70 million - back in ’15. That’s because as a minority shareholder the league collects its cut of the profits “free and clear. There’s no risk involved, they don’t have any expenses.” If the NFL took control of OLE once again, it “assumes 100% of the corporate tax responsibilities, without an allowance for any of the expenses”; remember, under the CBA the players are entitled to 48.5% of gross (not net) revenues.

WNBA Draft Selections Further NBA’s Chinese Growth Initiative

Han Xu became the 1st Chinese player to be drafted by a WNBA team - since '97 - when the New York Liberty (owned by Joe Tsai) selected her with the 14th overall selection (2nd round) in the 2019 draft; Li Yueru became the 2nd a round later. It is Tsai’s involvement that makes the selections particularly noteworthy. The NBA wants to do business in China, Tsai gives them the “insider” needed to do it and the Chinese government has made basketball a priority in the country, so the opportunity is ripe, but without a Chinese national on an NBA roster the possibilities are limited. With Xu and Yueru, the WNBA can now position itself as a testing ground for “Chinese native companies looking to engage in American sport, in a cost-effective way, before getting into the big dollar waters of the NBA.”

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