What’s the most expensive real estate in the world? If for some crazy reason you wanted to move out of New York City into an even pricier urban area, where would you go? To live in Monaco would cost you about $6,173 a square foot, and Hong Kong, you’re looking at around $11,000 a square foot. That’s $42.80 and $76.30 a square inch, respectively.
Aside from this being an indictment of the gradual un-livability of major cities, it’s also not even close to the most expensive real estate on Earth. In fact, it’s not even a tenth of it. Here’s the kicker: most of us see the most expensive real estate in the world almost every night, up close and in HD, on our phones and television screens.
The most expensive real estate in the world is the front of an NBA player’s jersey. Those 6.25 square inch sponsor patches have made the league about $150 million in revenue, and dividing that by all those square inches - 3100 - you’re left with $48,387.10 per square inch. Being on Lebron James’ chest is worth more than an apartment anywhere in the world.
Now that we have a mandated MLB season off the backs of the March 26 agreement between players and owners, it means that a lot of the conditions negotiated between now and then have fallen by the wayside, but are almost certain to rear up again later. A universal DH, expanded playoffs and sponsored jerseys were all bandied about, and I’m here to tell you that the last one is a good idea. First point of evidence is the NBA, explored above.
The NBA went to a small chest patch in 2017, and in the three years since it’s been a boon for both the league and the sponsors. Some NBA jerseys are just as “iconic” as the most famous MLB ones — the Celtics, Lakers and Knicks jerseys carry just as much clout in their respective sports as the Yankees, Dodgers or Giants. Fans may have initially raised a stink, but you can see in that photo of Lebron, the patch doesn’t get in the way of anything important. Crucially, the return on the sponsorship has been lucrative enough that sponsors aren’t even asking to increase the size of the ad.
Of course this is even more true in European football. Barcelona, Bayern Munich or Manchester United are brands recognized around the world, and their kits are held in as high regard by their fans as anyone who would call in to the Michael Kay Show. Barcelona’s blue and red divided top has been the same scheme and appearance for 117 years - longer than the Yankees by a fair amount.
The club was even one of the last holdouts in top flight football when it came to jersey advertisements — clubs in Europe are given wide latitude to decide whether to sell ad space or not, and how much to charge, rather than it being handed down from a central league authority. Yet Barcelona, perhaps the most storied, envied and imitated team on the continent, has had a jersey sponsor since 2006. They now make $40 million a year off the deal, similar to other elite clubs like ManU. It’s obvious that this is a boon to the income statements of pro teams, and it can be done in a way that still honors the integrity and history of a club and its uniform.
The sticking point for this deal would be how to divide these new revenues between players and owners. Revenue sharing dollars don’t actually go to payroll all that often — see Pirates, Pittsburgh — and the only way to really guarantee a share going to players would be through a salary cap/floor system that the union has fought against forever. I’m in favor of jersey ads from a pure revenue standpoint, but it’s got to be done equitably, properly compensating the Mike Trouts and Gerrit Coles of the world for literally advertising their torsos.
The simplest solution is just to divide the money among all the players equally. As previously mentioned, the NBA makes $150 million off their jersey ads. MLB isn’t quite that popular, but if we ballpark a $100 million payment across the league, and divide that 50/50 owners/players, then again by all 1200 guys on 40 man rosters, we get an annualized bonus of $42,000 a player. That makes a huge difference for a guy on the end of a roster making the MLB minimum, especially on a low-pay club like the Marlins or Pirates, but might not be enough for the veterans that control MLBPA voting to agree to.
If nothing else, this is what it means to market your players, which is something people pine for MLB to do all the time. Selling space on Gerrit Cole’s jersey is about as direct as you can get, and it involves no work on the players’ part. Mike Trout seems perfectly content to fish, talk about the weather and set baseball records, and not appear in too many TV commercials. Jersey patches is an easy way to leverage Trout’s talent without him having to change his lifestyle in any way — again, as long as the revenue split makes sense.
The thing that makes a brand, or a club, iconic is success. Logos and uniforms help, but the Yankees are the most famous baseball team in the world because they’ve won 27 World Series. The Detroit Tigers are just as old, their Old English D logo just as clean and “professional”, and they’re not nearly as famous. The Yankees could have worn hot pink jerseys with sashes for the last century, and if they still had 27 championships and the likes of Babe Ruth and Mickey Mantle in their pantheon of greats, they’d still be as iconic.
Of course the Yankees have worn sponsorships before — when travelling internationally, as the most obvious ambassadors for the game you could imagine, and when the great steward of Class and Professionalism and Military Do-Goodedness George Steinbrenner was very much in control of the franchise:
Jersey patches haven’t lowered the clout or status of the Los Angeles Lakers, nor FC Barcelona. The owners are already on board — the attachment to Yankee Excellence or the Historic Dodger Blue will disappear once a nine-figure ad deal can be reached — and the players would follow suit the moment a fair split of the revenues was agreed to. The most expensive real estate in the world is the front of a star player’s jersey, and it’s just fine if and when baseball wants a piece of that.