NBA teams will be allowed to sell advertising space on their playing shirts for the first time starting from the 2017-2018 season.
The teams could place a 2.5in square sponsor’s logo, the NBA says.
Until now, they have been unable to exploit this lucrative commercial option enjoyed by many other sports.
Experts predict the deals will generate more than $4 million a year for clubs.
The NBA, which is the first major North American sports league to announce plans to put ads on shirts, said a small patch would appear on the front left of match jerseys as part of a three-year pilot program.
“Jersey sponsorships provide deeper engagement with partners looking to build a unique association with our teams, and the additional investment will help grow the game in exciting new ways,” said NBA commissioner Adam Silver.
Featuring their brand logo on jerseys will give advertisers more opportunity to be seen by fans watching on TV.
David Carter from the USC Marshall Sports Business Institute said the pilot initiative was part of the NBA’s march towards “aggressively featuring corporate brands” on team shirts.
In June, the NBA signed a $1 billion sponsorship deal with Nike that places the company’s “swoosh” logo on the right shoulder of all the NBA teams shirts.
The NBA’s 30 teams will be responsible for making their own deals with sponsors for this new patch space.
“Anything that makes the individual franchise more viable will pay a positive dividend to the league itself,” said David Carter.
The concern for NBA teams and players will be how any new deal interacts with existing sponsorship agreements. A player, for example, that is endorsed by Pepsi may not be so keen to wear a Coke logo on their shirt.
Company sponsorship is a huge revenue stream for sport globally.
According to Price Waterhouse Coopers, global sport sponsorship revenue was worth $45.3 billion in 2015.
The NBA is the first of the four big US sports to allow on shirt brand sponsorship.
Leagues have been reluctant to put advertising on shirts for fear it will turn off fans.
The new sponsor patch will not appear on the retail version on the shirts sold at team or NBA stores, but the advertisers will be allowed to sell branded shirts at their own stores.