As the Washington Nationals will celebrate their upcoming 20th season, the team’s two home stadiums during their existence have generically gone from RFK Stadium to Nationals Park without any lucrative naming right’s sponsor. One sleeve of the Nationals’ jerseys continues to be a vacant lot without taking advantage of a very lucrative jersey patch sponsorship deal.
While many hate corporate greed, and think all of these sponsorships are induced by greed, Gordon Gekko will remind you that greed is good. The Nationals are the only team in baseball without at least one of those stadium/patch sponsorships in place. This isn’t greed — this is Business 101.
If a new owner took over the Nationals today, their first order of business would most likely look to the revenue side of the business for maximizing all opportunities. That usually starts with the largest numbers first, as mentioned: stadium naming rights and jersey patch sponsorship. When the Washington Commanders changed ownership recently, they had a new stadium naming right’s deal done in less than a year with Northwest Credit Union.
Why are we discussing this again? Because it is the offseason, and fans are nervous on how much the Nationals will spend this offseason. Ken Rosenthal of The Athletic wrote, “Nationals in search of next Jayson Werth“ and within the article wrote, “Pete Alonso, who turns 30 on Dec. 7, likely will be out of the Nationals’ price range and probably prefers to join an established winner. Christian Walker might be more realistic…”
While some have said, Rosenthal’s piece is largely an opinion piece, his thoughts were cut and pasted all over social media — and agitated many fans who got stuck on “likely will be out of the Nationals’ price range.” That phrase is all they needed to see to sound the sirens of “The Lerners are cheap” and a call for new ownership.
No free agent should be out of the Nationals price range this year. But signing your free agent is done while competing against other teams for those players. However, you do want the Nationals back in the competition.
These thoughts are not made because we think the Nationals are a rich team, because they are not. But they have a low payroll that should be able to absorb any player right now. With six arbitration players, the Nats’ active payroll is estimated at $39 million right now. Add in Stephen Strasburg‘s two final years of payroll and that is $74 million, and then add 40-man benefits, player benefits, and the pre-arb bonus contribution, and the Nats are committed to a CBT payroll projection at $ 96,358,692 before any free agent acquisitions.
That number is $31 million below what the Nationals had for an Opening Day payroll of $127 million for 2024. That $31 million could go far to get Alonso and probably any player not named Juan Soto — but what if the Nats spent more than that $31 million because they got fiscally smart and took advantage of money on the revenue side?
The value of an MLB jersey patch sponsorship can vary significantly based on the team, market size, and the brand involved. Here are some examples of deals and their reported values:
- New York Yankees: The Yankees have a deal with Starr Insurance reportedly worth $25 million per year, running through the 2031 season, making it the richest jersey patch agreement in baseball at the time of the deal.
- Boston Red Sox: The Red Sox’s sponsorship with MassMutual is set at $17 million annually over a 10-year period, which was noted as one of the highest in MLB at the time.
- New York Mets: They reportedly receive $20 million per year for their sponsorship with New York Presbyterian, highlighting the high value of patches for teams in large markets.
- San Diego Padres: Their deal with Motorola is worth around $9 million per year, which was one of the first jersey patch sponsorships in MLB.
- Pittsburgh Pirates: They signed a sponsorship with Sheetz for a reported $15 million annually.
- Baltimore Orioles: A deal with T. Rowe Price is in place for five years, reportedly worth $15 million per year.
The value of Major League Baseball (MLB) stadium naming rights deals follows a similar pattern like the jersey patch sponsorships. Most are not publicly disclosed.
- Average Annual Value: The average annual cost for naming rights in MLB stadiums can range significantly, with some deals being worth much more or less depending on the market size, and the success of the team.
- Total Deal Value: The total value of these deals often runs into tens or hundreds of millions over the course of the contract. For example, Citi Field’s naming rights deal with Citigroup was reported at $400 million for 20 years, which equates to $20 million per year.
- Length of Deals: Naming rights agreements in MLB typically last for an extended period, with an average length of 22 years as per Sports Business Journal’s data. This long-term commitment ensures a consistent revenue stream for teams but also binds the sponsor for an extended period.
- High-Profile Examples: Some notable examples include:
- Citi Field (New York Mets) as mentioned has one of the highest values at $20 million per year for 20 years.
- Coors Field (Colorado Rockies) has an unusual deal where Coors contributed $15 million for naming rights in perpetuity, making it one of the best deals in terms of cost-effectiveness for the sponsor.
- Houston Astros just finalized a deal to change from Minute Maid Park to “Daikin Park.” Daikin Comfort Technologies purchased the naming rights for 15 seasons and the name change will become official in January 2025 through the 2039 season.
- Market Influence: Stadiums in larger or more prestigious markets tend to command higher fees. For instance, in major markets like New York or Los Angeles, naming rights can be significantly more expensive than in smaller markets.
- Recent Trends: There’s been an increase in the value of naming rights deals over time, with some newer agreements showing higher annual values, reflecting the growing commercialization of sports venues. Reportedly, the Daikin Park deal with the Houston Astros, potentially valued at $140 million over its term, structured in tiers dependent on future ballpark decisions. The Astros, Marlins, and Texas Rangers have not only had one stadium naming rights partner in the past decade, each has had more than one. It certainly shows the demand.
Some people have thought that the Nats don’t own the naming rights, and that is not accurate. The Nats have full rights to renaming the stadium, in Sections 9.1 and 9.2 of their contract with the DC Government subject to Section 9.4 with prohibited names. A h/t to Warning Track Power on a link to the contract.
The math seems clear that a jersey patch is worth at least $15 million, and stadium naming rights at least $9 million. Those sponsorships are worth at least $24 million combined, and then you have $31 million of payroll below last year. That brings you to $55 million. So why couldn’t the Nats spend $55 million while they look ahead and see that winning will bring more fans to the stadium — and higher attendance means more revenue. This should be cumulative just like we saw after the 2012 season.
On top of that, or at least for CBT purposes, Strasburg is off the books in two more years after the 2026 season. That is $35 million more that you know will come off of the books. If this is a cashflow situation, the Nationals should resist doing any deferral deals, but backload deals past the 2026 season to help the cashflow. That should allow the Nats to do any long-term deal.
Per Statista, the Nationals average ticket sales price was just under $45 in 2023. Add to that parking, food and beverage, and merch, and you approach the target number of $60-$80 value of each customer through the turnstile. In 2011, the Nats attendance was 1,940,478 and they had one rain-out giving an average of 24,256 per game. That number was almost identical to this year at 1,967,302 attendance for the season and an average of 24,288 per game. From 2011 to 2012, the team signed Edwin Jackson, traded for Gio Gonzalez, and called-up Bryce Harper in April of that season. Attendance soared to 2,370,794 in 2012. Winning brought the fans back. Nearly 5,000 additional tickets were sold per game on average. That increase in attendance could be worth approximately $24 million on the low side. Again, that goes back to: you build it and they will come. A line straight from Field of Dreams.
Yes, one prominent free agent, Yusei Kikuchi, has signed a deal with a team as of this morning, with other deals in the works. In the Top-100 free agent list, there are 99 players who are unsigned as of now. On average, each team will sign three players in the Top-100, but on average, it is like musical chairs to get a Top-25 player, and several teams will not find a seat. The Nationals must find a seat this year, and maybe two seats. That isn’t greedy. That is what you do when you are trying to win.
The only reason the Nationals revenue is not that of a big market team is because they are stuck with the MASN deal for their RSN TV revenue reportedly in the $60 million range which is about half of what the Phillies make each year. There is nothing the Nationals can do about that. But they control their own destiny in all other parts of raising revenue. The Washington D.C. metropolitan market is ranked the 7th largest in the country — and larger than Philadelphia. The DC MSA is the 4th wealthiest in the country, and way ahead of Philadelphia — and that is not close. The wealth dynamics makes Washington the perfect mix of size and strength for advertisers. Winning is the final element — and the Nationals won the World Series five years ago.
“D.C. is the Sports Capital. We know how important sports are to our city’s economy and culture. They create jobs, generate tax revenue, and spur economic development. But sports also create a lot of pride in our city, they bring people together, and we look forward to continuing to support our teams in ways that benefit our city and residents and help knock D.C.’s Comeback out of the park.”
— Mayor Muriel Bowser said in an earlier statement
The Nationals started a $5 ticket program for DC residents in 2024. What a great idea. A family of four on a Saturday could watch the Mets for $20 and buy four hot dog and sodas, for a total of under $79. Try to replicate that fun anywhere else.
One thing you can say for Monumental Sports’ chief partner, Ted Leonsis, is that he is killing it in profit per a recent report turning $79.3 million just on the Washington Capitals. Now Forbes believes the Nationals made $63 million in operating profit which gets lowered greatly after deducting interest and depreciation and other non-operating expenses. Still, you would think the Nats turned the red ink into the black.
In revenue dynamics, the difference is Leonsis has sold his arena naming rights to Capital One Bank after his previous deal with Verizon, and this year his jersey patch deal is with TikTok. Ironically, a source told TalkNats that the Nats would not do a jersey patch deal with TikTok. A source also told us that the Nats are diligently working towards selling a jersey patch sponsorship. But why does it take so long?
In a typical profit model, revenue minus expenses equals profit as long as expenses are less than revenue. Raise revenue, and you can increase expenses. Essentially, make more money, and you can spend more on player payroll. That is a simple concept that you do not need an MBA to comprehend.
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