By CJ McCollum, Portland Trail Blazers, for NBA.com
It is nearly impossible to walk down the street in any town in the United States and not run into someone sporting the logo of a professional sports team. Hats, gloves, socks, shoelaces, jackets, shirts, shorts – you name it, you can probably get it with your favorite team logo. The NBA has one of the largest global merchandise businesses in sports, with products available in more than 100 countries on six continents.
I had an opportunity to sit down with Sal LaRocca, the then Executive Vice President of Global Merchandising at the NBA, who oversees the league’s global consumer products business. He has since been named President, Global Operations and Merchandising, adding the oversight of the operations of the league’s 13 international offices to his responsibilities.
LaRocca started his career at the NBA in 1990 (which he kindly pointed out was before I was born), and has brokered the league’s partnerships with adidas, Panini and Spalding, as well as developed the global video game and e-commerce business. Throughout his tenure, LaRocca has seen incredible change and growth in the league’s merchandising business.
“The retailers used to be small, independent brands focused only on filling their orders,” LaRocca said. “When global brands like Nike, adidas and Under Armour jumped in, the business became more sophisticated with retailers becoming their own stand-alone brands, with the NBA as only part of their overall image.”
The advent of the internet also provided access to the purchasing power of NBA fans around the world. In 1990, less than 2 percent of the overall business came from outside the U.S. Now, about 40-45 percent comes from outside. The business has continued to grow.
“Overall, the merchandising business is largely driven by big companies, social media and the internet, and it is done on a global basis,” LaRocca said.
With all that change and access to consumers, you can only imagine what that translates to in terms of revenue. Estimates are that sales total between $2 and 3 billion, but the revenue is significantly less than that. The league does not make any money from fan purchases at retailer locations, but rather from wholesale deals with licensees. Of that profit, any revenue from products with player images or numbers is split 50/50 with the Players Association.
In deciding what goes on shelves, it all comes down to location, location, location. There are certain products – jerseys and video games – that are popular around the world. Other products resonate only locally. For example, the NBA is considered more of a fashionable lifestyle brand in Korea, so the product there features clothes that are more street wear than fan statement, with logos and apparel in colors and styles you won’t find anywhere else. Can you imagine a Blazers jacket in pink and yellow instead of black and red?
It’s great that there are so many options for fans to show support for their teams. But let’s get down to where it really matters – the jerseys on the court. It seems like there is a new style, cut or color introduced on a regular basis. What’s it all about?
Fashion, marketing and performance technology.
From the fashion side, the different iterations of oncourt apparel are the league’s way of standing out in a very cluttered world of products. A lot of thought goes into figuring out how to push the fashion envelope to stay in front of trends and help integrate NBA merchandise into fans’ lives outside of the arenas.
“There is always an evolution, and as things change and trends evolve, it’s up to us to try new and different things,” LaRocca said.
Jerseys also play a pivotal role in marketing at both the league and team level. There are certain NBA-led initiatives, such as Noches éne•bé•a, that will feature special jerseys as one component of an overall marketing campaign. Among teams, LaRocca said jerseys are driven by what each organization wants to do in its particular market.
“Different jerseys give teams an opportunity to continue reinventing themselves to the local fan base and produce sales opportunities,” he said, “especially as things get more competitive in team markets with other professional leagues.”
When it comes to performance enhancement, the current trend is fabric that is light and dries more quickly. According to LaRocca, the goal is to put players in a position to perform at their best.
“When you decide what helps performance, it can’t make you faster, can’t make you jump higher, can’t make your arms three inches longer,” he said, “but if a uniform can stay light on your body and can dry quickly, and if you never notice that you have a uniform on, that probably is helpful. “
No change is without controversy, which the league is familiar with. There are a lot of people with a lot of opinions, including 450 players that have to wear the jerseys. LaRocca accepts that with so many opinions, you are never going to get 100 percent approval. The solution lies in clear communication and engaging players in product development.
“Our job is to generate revenue, and the more we generate, the more we share with players in the 50/50 split,” LaRocca said. “We aren’t trying to embarrass players or make them look unprofessional and compromise their performance.”
During February, players wore special Black History Month shooting shirts, which Miami Heat guard Ray Allen was very involved in designing.
“[Commissioner] Adam Silver has been very focused on getting players as involved as possible in overall business to educate them on what, how and why we do things,” LaRocca said. “We are trying to do what we can to raise awareness and revenue for everyone.”
I joked with LaRocca that I had some great ideas, and he extended a standing invitation to visit him at NBA headquarters to talk shop. So stay tuned for a limited edition CJ McCollum sock line!
In the end, it is amazing how NBA logos make their way around the world and into the wardrobe. Merchandise allows fans to connect with their favorite athletes and literally wear their passion on their sleeves.