SBJ Marketing: Will Pacers' patch deal be start of new trend?

There’s an anecdote concerning former NBA Commissioner David Stern that’s been making the rounds over drinks at industry events for so long, I consider it apocryphal.

I am assured it isn’t.

Around a quarter-century ago, Disney was pitching the league on building and owning an NBA-land type of attraction adjacent to Disney World in Orlando. Stern was told the number would be a cool $100 million. The commish quickly turned it around, telling the assemblage of Disney execs that $100 million was indeed a good number -- and precisely the amount he figured Disney should pay the NBA for those same rights.

Spokenote CEO John Wechsler, whose startup is sponsoring the first uniform ad patch with a QR code, started down a similar path, pitching the Pacers on how his “digital sticky note” tech could be adopted by the team to sell nearly anything, including season tickets, suites and sponsorships. Not too long after, he found himself switching from seller to buyer -- eventually purchasing a uniform ad patch for Spokenote that’s debuting tonight when the Pacers play the Bucks.

The new deal also includes baseline branding at both ends of Gainbridge Fieldhouse.

"It was quite a pivot," said Wechsler, with a chuckle. "I felt like I should reach for my wallet, because it was a different arrangement than I had in mind, but it still made so much sense." Wechsler’s KPIs for the deal: Enough awareness to stimulate sales and help the company expand distribution.

There’s money flowing both ways here, so what already is a complex deal is even more so. Pacers owner Herb Simon, along with minority owner Steven Rales, today each disclosed investments in Spokenote’s $4 million Series A funding round, causing one agency sales veteran to ask if this was “the next Sphere patch deal.”

Start of a new trend?

Still, being the first pro team to affix a QR code ad to a team uniform brings up a multitude of issues that will reverberate across the industry. Since it’s a time when sponsors are questioning the value of camera-visible assets, including patches, this could soon be a new way to show value.

However, I'm told the NBA pushed back hard about where the traffic generated by the QR code would go, insisting on the Pacers' site. That landing spot does not enable users to buy Spokenote products. And there will surely be envy from other, larger sponsors, wondering why they can’t avail themselves of a QR code.

The very concept of a uniform patch with the capability to take users away from an NBA game to other video content is also nettlesome. And since we know marketers duplicate more often than they originate, will sports venues and uniforms now become a sea of such QR codes? "The reason we are putting a code on our jersey is that’s their core product," explained Todd Taylor, president and chief commercial officer at Pacers Sports & Entertainment.

Knowing that NBA has long stood for "Nothing But Attorneys" among industry cognoscenti, I’d expect the league to tightly restrict the use of QR codes (if that’s possible when the market for camera-visible sports marketing assets is oversaturated and somewhat depressed).

"The rights issues are complex and new enough that it’s fascinating it even made it through the league," said former NBA Global Marketing and Media Group President David Schreff, now CEO and board director at marketing technology firm Actv8me. "There are just a myriad of uses at a time when you have  sponsors looking for value. Conceivably, a QR code could be a dynamic coupon with sales that could pay for the whole program. Think about different players wearing different codes and promotions based on team results."

In a previous marketing ploy, Spokenote told fans of the USL Indy Eleven soccer team that it was replacing jersey numbers with QR codes. The fact that the team’s opener was April 1 should have been evidence that was a ruse.

But this is different. "This deal makes sense for us as a startup because of where we want to be as a consumer brand," said Wechsler. "Everyone in sports is talking about engagement and activation. This is it."

Brian Gainor is putting out his own shingle as Gainor Sports, based in Jacksonville. Gainor said his consultancy will specialize in "creative revenue strategy" for properties, including ticketing, sponsorship, premium seating and international growth. The move comes after Gainor’s eight years with GMR Marketing, and eight with 4Front, acquired by Legends a year ago. Gainor said he will have two new clients to announce soon.

Noting the shift in sports from broadcasting and cable to streaming, industry vet Larry Novenstern, along with former USA Taekwondo Executive Director Keith Ferguson and ad research guru Bill Harvey, have formed startup The NewStar Group. Novenstern said the company will be "dedicated to helping entities get through the spider web of digital to streaming."

Jeff Ehrenkranz has left Allied Sports, where he’d been COO for the past three years. Allied CRO Sean Barror termed it a mutual decision, adding that the agency will not replace the COO position.

• The Pop-Tarts Bowl account on X, fueled by the viral mascot at the game, earned 12.8 million projected impressions and average of $6,000 in social value per post for the brand, per data from social media measurement firm Zoomph.

• Darden Restaurants brand Cheddar’s Scratch Kitchen is renewing its NASCAR team sponsorship deal with Richard Childress Racing for multiple years, keeping the Fortune 500 company in the sport, reports SBJ's Adam Stern.