Sacramento Republic FC, under pressure to fortify its bid for a Major League Soccer berth, announced a major corporate partnership Friday: a deal with the UC Davis Health System to sponsor the team’s jerseys.
The agreement is significant because in the soccer industry, jersey or “kit” sponsorships can be worth millions, sometimes rivaling the fees paid by corporations for stadium naming rights. UC Davis’ agreement takes effect assuming the minor-league team, as is widely expected, graduates to MLS status.
“Someone could argue the kit is at least as relevant, if not more, than the naming rights,” said Republic FC’s managing partner and lead investor, Kevin Nagle. “We believe, based on our assessment, that we’ve got one of the most robust kit programs (in MLS), which I think speaks well for the Sacramento market.”
While Republic FC officials said the jersey agreement will be more lucrative than the current sponsorship with the UC Davis Children’s Hospital, neither side would disclose financial terms because the deal hasn’t been completed. Even without a final contract, though, Republic FC was eager to make an announcement in order to showcase the sponsorship to MLS owners, who will be meeting next week at the league’s All-Star Game in San Jose.
MLS Commissioner Don Garber, in a visit to Sacramento in April, all but guaranteed Republic FC an expansion slot no later than 2020. But he said the league’s one lingering concern about Sacramento is its scarcity of big corporations, which could compromise the market’s ability to support the team financially.
Nagle said more sponsorship deals are expected to be announced over the next few months. Republic FC is speaking to several companies about naming rights for the team’s proposed new downtown stadium, and “we hope to have that become one of our next announcements.” The team is planning a 25,000-seat, $226 million privately financed stadium at the northeast corner Sacramento’s downtown railyard if the city’s MLS expansion bid is accepted.
The agreement between UC Davis and Republic FC includes a planned “Built for Health Initiative.” The two organizations will collaborate on such projects as a youth wellness program and neighborhood outreach. Nagle, a retired pharmaceutical executive, said the two organizations could collaborate on building a public health clinic, possibly near the new stadium or Republic FC’s administrative offices in midtown.
The partnership will also mean opportunities for the university’s sports-medicine students to treat Republic FC players, said Ann Madden Rice, chief executive of the UC Davis Medical Center.
“People talk about the PR aspect (of the deal) but for us it’s a lot deeper,” she said at an announcement ceremony, attended by Republic FC players and coaches, in front of the medical center.
Expansion will be on the agenda when MLS owners meet next week in San Jose, and Nagle said he and other team executives plan to hold informal discussions with league officials. It’s considered highly unlikely, however, that the owners will take a vote on Sacramento’s bid next week.
During his visit to Sacramento, Garber said he’d like the owners to make a decision before Mayor Kevin Johnson, who has championed the team’s MLS effort, leaves office in December.
Sacramento caught MLS’ eye thanks mainly to the remarkable sellout streak at Republic FC’s temporary home, 11,500-seat Bonney Field at Cal Expo. The club has signed up a slew of investors, including the Sacramento Kings and members of the San Francisco 49ers’ ownership group.
About the only thing missing is proof that Sacramento corporations and other organizations can provide enough sponsorship dollars.
That’s where the jersey deal becomes important.
Other sports leagues have only tiptoed into jersey sponsorships; the NBA has said teams can sell small jersey patches under a three-year experiment that starts in the 2017-18 season.
Soccer is different. Sponsors’ logos have long been a prominent part of team jerseys, and the dollars can be substantial.
Real Salt Lake’s jersey deal with LifeVantage Corp., signed in 2013, is worth a reported $3 million a year. That’s greater than the team’s reported $2 million-a-year stadium naming-rights deal with the Rio Tinto mining company – although the stadium deal was executed in 2008, when soccer was considerably less popular.
Los Angeles Galaxy’s reported $4.4 million-a-year jersey deal with Herbalife is nearly as lucrative as its $7 million-a-year stadium naming-rights agreement with StubHub.
“It’s the one sport where you get to wear your brand, your partner, over your hearts,” said Republic FC founder and president Warren Smith. Fans who buy soccer jerseys “don’t think they’re authentic if they don’t have the sponsors on them.”