The Cleveland Cavaliers have a new jersey patch sponsorship. The NBA franchise agreed to terms with hometown steel manufacturer Cleveland-Cliffs, the parties announced Tuesday.
Terms of the deal were not publicly made available, but according to people familiar with the agreement, it matches the Cavs’ previous sponsorship agreement with tire manufacturer Goodyear. That pact was valued at a reported $10 million per season.
The people declined to be named because the deal terms are private.
The agreement comes at a good time for Cleveland-Cliffs. The Cavs are one of the surprise teams in the NBA this season, and they appear headed to the postseason. The team is seventh in the NBA’s Eastern Conference. The last time the team made the playoffs was when LeBron James led them to a fourth-consecutive NBA Finals in 2018, losing to the Golden State Warriors.
Cleveland-Cliffs would get increased national exposure if the Cavaliers make the playoffs, as postseason berths mean more television impressions for jersey patch partners.
Cleveland-Cliffs is traded on the New York Stock Exchange under the ticker symbol “CLF.” It has a market cap of over $16 billion.
In a statement announcing the partnership, Cavs CEO Len Komoroski called the company “the fabric of life here in Northeast Ohio.” Komoroski added the agreement is “very appropriate and relevant for Cliffs to be represented, literally, on the fabric of the Cavs player jerseys.”
In this new agreement, Cleveland-Cliffs will get in-arena signage at Rocket Mortgage FieldHouse, building off its current sponsorship deal with the team, which features an arena entrance naming rights slot. However, Cleveland-Cliffs will not obtain the Cavs’ practice jersey patch asset or virtual floor signage for local broadcast games. Teams can package those assets in jersey patch deals to increase value.
NBA jersey patches have grown in popularity in the sports sponsorship marketplace. Since the NBA started its jersey patch program in 2017, team deals made the league roughly $150 million annually. That figure is expected to increase to more than $200 million for the 2021-22 season.
To date, the Brooklyn Nets have the most expensive patch deal. In September 2021, CNBC reported the Nets make $30 million per year from online trading platform WeBull. That agreement eclipsed the Golden State Warriors’ $20 million per season deal with Japan-based e-commerce company Rakuten. That deal was extended last year and expires after the 2022-23 season.
Newer NBA team patch agreements should increase the league’s sponsorship revenue, which reached a record $1.46 billion for the 2020-21 regular season, according to estimates by IEG, a sports partnerships consultancy firm.