Sponsor patches on college uniforms would raise millions but some ADs are in wait-and-see mode

Key Points

• The introduction of sponsor patches on college team jerseys could generate hundreds of millions of dollars in new revenue as schools seek additional funding avenues amidst athlete revenue-sharing.
• NCAA approval for uniform sponsor patches is anticipated within months, following the organization's recent decision to allow commercial ads on football fields.
• Concerns about exclusivity clauses in existing apparel contracts may delay the implementation of jersey patches, though conversations with apparel companies are reportedly promising.
• Some athletic directors suggest that jersey patches might not be as financially beneficial as expected, indicating a potential need for conferences to negotiate collective deals for greater value.

The leader of the largest multimedia rights holder in college athletics is confident sponsor patches will begin appearing on team jerseys sooner than later with schools under pressure to find new ways to make money in this new era of revenue-sharing with athletes.

Learfield President and CEO Cole Gahagan told The Associated Press the 67 power-conference schools and Notre Dame could combine to tap into hundreds of millions of dollars of new revenue once NCAA approval is granted. Gahagan predicted approval would come within months.

Sponsor patches on the front, back or sleeves of jerseys have been part of international soccer for decades and have become common in the NBA, NHL, MLS and Major League Baseball in recent years. Last year, the 23 MLB teams with jersey patches generated a total of $204 million from those ads, according to sports marketing data firm SponsorUnited.

“There’s no reason why college should sit behind those leagues with that opportunity, as sizable as it is,” Gahagan said.

Other than the logo of a school's apparel sponsor, corporate branding patches on uniforms are prohibited by the NCAA. But the NCAA's decision last year to allow commercial advertisements on football fields makes approval of uniform patches seem inevitable.

“It’ll come, and it should come,” Nebraska athletic director Troy Dannen said. “As part of the NCAA modernizing its rules, it’s overdue."

A potential holdup would be the exclusivity clauses in schools' contracts with apparel partners. Brands such as adidas, Nike and Under Armour do not allow marks of other corporate sponsors on the uniforms they supply to schools.

Gahagan said he and other stakeholders have had promising conversations with the apparel companies to ease that restriction. Learfield in December announced a program that would provide additional marketing opportunities for the apparel providers in exchange for allowing other jersey patches. Nike and Under Armour did not respond to requests for comment and adidas declined to comment.

Texas Tech athletic director Kirby Hocutt said he didn't foresee his apparel sponsor being a roadblock.

“I've found that adidas in everything we’ve had conversations about — jersey patches included — has been open minded and reasonable and willing to consider any opportunity that’s going to advance Texas Tech athletics,” he said.

Nebraska and Texas Tech, like most other power-conference programs, are spending the maximum $20.5 million on direct revenue-sharing payments to athletes this school year. They've had to be creative in finding ways to fund the new expense, and Hocutt said jersey patches show promise.

“It’s definitely something that is in the sponsorship deck that we’re presenting to select partners about that opportunity in anticipation of it happening,” The said. “Do we have a deal on deck? Not quite yet.”

For some schools, Dannen said, the patches might not be as lucrative as believed.

When a school grants its multimedia rights to companies such as Learfield or Playfly, the school is paid a guaranteed amount of money to have the rights-holder handle all marketing and advertising.

Nebraska in 2022 signed a 15-year, $300 million contract with Playfly. Under the terms, Nebraska receives a $13.5 million guarantee for its multimedia rights in 2025-26. For revenue Playfly generates in excess of $20 million in 2025-26, Nebraska receives a 72.5% royalty.

Hypothetically, if Playfly didn't reach the $20 million threshold and jersey patches were included in the multimedia rights deal, Nebraska would not receive any of the proceeds from the patches.

Dannen said jersey patches were not on the radar in 2022 and would be considered new inventory that would need assessment. He said it might be a better deal financially for schools to go in as a group and have their conference, the Big Ten in Nebraska's case, negotiate a jersey patch deal similar to conference television contracts.

“If you jump in now, and I’m going to get a little bit (of money) because of the jersey patches," Dannen said, “I would really like to see if there’s an opportunity for our conference to put all those jersey patch rights together and all of a sudden they’re worth a whole lot more to the institutions when 18 are playing instead of just one."

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