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Sports Business

Slow Sales at the Outset for NBA Floor Space

New York Knicks (L-R) Andrea Bargnani (77), Kenyon Martin (3), Carmelo Anthony (7), J.R. Smith (8), and Iman Shumpert (21) at Madison Square Garden in New York on Nov. 20

Photograph by Heinz Kluetmeier/Sports Illustrated via Getty Images

New York Knicks (L-R) Andrea Bargnani (77), Kenyon Martin (3), Carmelo Anthony (7), J.R. Smith (8), and Iman Shumpert (21) at Madison Square Garden in New York on Nov. 20

This season marks the first that the National Basketball Association is allowing teams to sell advertising space on the court. The area up for grabs, called the apron, is just out of bounds along the sideline. So far the market is slow. According to Sports Business Journal, only three teams have sold apron ads. The Indiana Pacers went first with a deal with the state’s Economic Development Corporation. JPMorgan Chase (JPM) later added the sideline to the many spaces it owns inside Madison Square Garden during New York Knicks games, though according to SBJ, the apron was “not an incremental buy,” meaning it was somehow worked into the bank’s existing sponsorship deal with MSG. And last week Samsung Electronics (005930:KS) struck a deal with the Miami Heat.

The Heat deal follows the three-year, $100-million partnership with the NBA that Samsung announced in October. The company also has a deal with the team’s star, LeBron James. (At least one person has interpreted this as a hint that James will resign with the Heat.) Prices for the apron deals have not been disclosed. SBJ reports that teams are holding firm in asking $1 million or more per year. In June, Eric Smallwood of Front Row Marketing Services estimated the value of the apron, which is available as a decal for regional telecasts only, at $450,00 to $2.5 million annually.

While three sales/barters in three months is not a breakneck pace, Smallwood says he expects the market will not stagnate for long. Sponsors may be waiting on the sidelines, so to speak, to see if and how the NBA makes the one-year trial permanent. And teams are likely holding out for blue chip buyers that won’t detract from the their own brands. Smallwood expects 90 percent of the league’s 30 teams will have sold their aprons by the end of next season. “I think it’s a very valuable piece,” he says, “because it’s one of the closest ads to the players.”

Meanwhile, as Samsung pays to be in the hands and at the feet of LeBron James, Apple (AAPL) is getting (apparently) free advertising from Portland Trailblazers players using iPads on the bench to watch replays during games.

Boudway is a reporter for Bloomberg Businessweek in New York.

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