CHARLOTTE, NC (Katherine Peralta and Rick Bonnell/The Charlotte Observer) - At the home game against the Cleveland Cavaliers Wednesday, Charlotte Hornets fans will notice a little something new on their team's classic pinstriped jerseys.
The Hornets will announce Monday that they have signed a three-year advertising deal with LendingTree, the Charlotte-based online marketplace that matches borrowers with lenders. As part of the deal, Hornets jerseys will have a 2.5-inch LendingTree patch on their left sides, opposite the Jordan Brand Jumpman logo.
The Hornets and LendingTree describe the partnership as mutually beneficial: The Hornets gain a new "founding level" corporate sponsor and a new, multimillion-dollar revenue source, while LendingTree gains global marketing exposure that the company says could expand its customer base.
"There's so much synergy and attributes that we share as two local organizations. The partnership is such a great fit in a lot of ways," Hornets President Fred Whitfield told the Observer.
The Hornets and LendingTree would not disclose the price tag of the partnership. But based on the size of the Charlotte market and the Hornets' performance, the deal is likely worth $5 million to $7 million per year, industry experts say.
As part of the deal, LendingTree becomes the title sponsor of the new Hornets mobile app. The company also gets prominent fixed signs throughout the Spectrum Center, new digital signage, banner ads, and TV and radio game ads, Hornets Chief Marketing Officer Pete Guelli said. LendingTree is now the "official loan shopping partner" of the Hornets, too.
LendingTree is "one of the most sophisticated direct marketing operations in the world," Guelli said. "We are helping them on the consumer side, but I really believe they can help us in that space."
The partnership comes at a time of fast growth for LendingTree: Revenue has reached new highs, the company is building a new SouthPark headquarters and its shares are trading around $256, up from the $2 low reached when the housing market crashed. The homegrown company was founded by CEO Doug Lebda in 1996.
LendingTree Chief Marketing Officer Brad Wilson said aligning the company's brand prominently with the local NBA team is a way to reach new, young customers, especially as more fans cut their cable cords and opt instead to stream TV shows.
"Sports is one of the last bastions where people watch live programming," Wilson said. "It's getting harder to reach people through the normal channels than it was 10 years ago."
The two organizations also point to their shared community commitment: Through the partnership, the Hornets and LendingTree will work together on a number of joint community initiatives, including a youth scholarship program and a shoe-donation program. LendingTree also becomes the title sponsor of the Hornets' youth basketball program.
Marc Ganis, a Chicago-based sports business consultant, said the process of determining jersey-patch sponsors has been a deliberate one for all NBA teams. The NBA, like other leagues looking to involve corporate sponsorships more heavily, doesn't want jerseys to start looking like NASCAR uniforms.
In other words, the corporate patch is necessary to generate sponsor revenue, but it doesn't really help build the brand of a team, he said.
"The NBA is very careful not to do something excessive, and to do something incrementally so it's not jarring to fans," Ganis said.
The LendingTree deal came together in the last three or four months, Guelli said. The Hornets worked through Excel Sports Management to work the deal out.
The Hornets are the 19th NBA team to announce a patch partnership. This is the first season in the NBA's 68-year history that the league has allowed signage on uniforms. This is a three-year trial period, its inception coinciding with the NBA's switch from Adidas to Nike as its uniform maker.
Of the 30 NBA teams, the Hornets are the only one to have a Jordan Brand logo, representing the Nike division named for Hornets owner Michael Jordan.
Companies with their patches on NBA uniforms so far include national brands such as GE (Boston Celtics), Goodyear (Cleveland Cavaliers) and StubHub (Philadelphia 76ers). Also, there have been connections to NBA cities' iconic brands: For instance, Disney for the Orlando Magic and Harley-Davidson for the Milwaukee Bucks.
The reigning NBA champion Golden State Warriors are wearing a patch advertising Japanese technology company Rakuten. Reportedly, the Rakuten patch deal is the most lucrative to date, paying the Warriors an estimated $20 million per year.
While these patches are new to the NBA, advertising on uniforms is commonplace in Europe, in team sports such as soccer and basketball. High-profile golfers and tennis players wearing advertising patches on their clothing has long been the norm.