Big 12's Monster Energy sponsorship could be bigger than its $20M sticker price

The Arizona State University football team kicks off its season in about three weeks, hosting Morgan State in Tempe. And when the new season starts, there’ll be some new features across the Big 12.

The conference, which includes both ASU and University of Arizona, has reached a new deal with Monster Energy. The conference describes it as a first-of-its-kind agreement. The deal is worth $20 million a year — that’ll mean about $1 million a year for each conference school.

In exchange, football and men’s and women’s basketball players will wear a co-branded Big 12-Monster Energy patch on their uniforms. There’ll also be logos on fields and courts. The regular seasons will also bear the company’s name.

Dylan Dittrich writes the new the Yahoo Sports Biz newsletter for Yahoo Sports. He joins The show to talk more about this arrangement.

Full conversation

MARK BRODIE: Dylan, this seems like a unique situation, so what do you make of it and what have you heard from folks in this world about it?

DYLAN DITTRICH: Yeah, I think the initial reaction was very loud, as it can be whenever something very new happens in the sports business landscape. And look, this is all new, right? This idea of jersey patch sponsorship in college sports and this kind of pursuit of revenue in college sports — while not in it in and of itself a new trend — the ways that that schools are kind of unlocking revenue, many of those methods are new.

And I think what the Big 12 has done here is something that’s innovative, pooling and selling conference assets to a partner like Monster Energy is something that hasn’t been done before. And so while I think was a lot of a lot of noise in the reaction, the reality is that we don’t have a lot of precedent to judge this deal by yet. And so there’s a lot more that we’re going to learn about it in time about how it stacks up, about the puts and takes of the deal and whether or not it’ll be a success, and a lot of that will play out in time.

MARK BRODIE: Does that make it maybe premature to try to judge who got the better of this deal, and if maybe, for example, I’ve seen some reporting that, you know, folks are saying the Big 12 didn’t get enough for for what they gave, that kind of thing? Is that maybe premature given, as you say, that this is such a new thing?

DYLAN DITTRICH: I think so, absolutely. I think, yes, to your point, it seems like the the loudest reactions and the majority reaction was was that idea that the dollar value associated with this deal seemed low given kind of the the assets included. You’re talking about football and basketball entitlement partner, jersey patches across those sports, court and field placement. These are considered to be very, very valuable, very premium assets that Monster Energy has gotten access to.

And so when I think people heard that headline $20 million number and what that equates to on a per-school basis — in the million-dollar area — I think people were underwhelmed. But I think there’s no precedent really to use to be underwhelmed by this.

Most schools haven’t even sold their kind of individual patch inventory yet, and so the data really isn’t out there in a meaningful way just yet. And I also think that there’s more to this deal than just the kind of headline dollar figures alone.

MARK BRODIE: Do you think that there’s a chance that the deal with Monster Energy could maybe hinder schools in the Big 12 from making their own deals, like if they want to make a deal with maybe a competitor to Monster Energy, for example, like could this prove problematic for some Big 12 schools?

DYLAN DITTRICH: I think it makes it a more complicated equation, right? I think as the pendulum kind of swung away from that initial reaction of, “Oh, this is a cheap deal,” to, “Hey, this is just found money, and schools can still sell their own deals so any conference deal is just kind of incremental revenue.”

I think the reality is somewhere in the middle, right? I think the conference-level deal takes some potential school-specific partners off of the table, right? You’re not going to have schools that have energy drink jersey patch sponsors that are competitors to Monster now.

And I also think there’s probably some reduction in appeal to potential school-specific partners based on the fact that they’re essentially going to be sharing space with Monster Energy now. There’s probably an opportunity cost to to the conference-level deal relative to what schools might get if that deal didn’t exist

But we don’t know that for sure yet. We’ll see that play out in terms of what schools are getting, and it’s going to be kind of tough to isolate what could they have gotten absent this idea this Monster deal versus what they ultimately get with it.

MARK BRODIE: Do you get the sense, and maybe do folks in the sports business world get the sense that this could be a precedent-setting deal, that the next conference that wants to make a deal will look at this one, and companies that are looking to make deals, sponsorship deals with conferences, will look at this one and say, “OK, we think we can do this differently. We think this set the market here.” Like, does this set the precedent for the next conference?

DYLAN DITTRICH: Not necessarily. I think it’s it’s important in that it’s a data point and it’s out there, and there aren’t many of them to use as precedents at the moment. But every conference is different, right? And you think about certainly a Big Ten or an SEC is going to command more money if it chooses to do something similar.

And they very well may not choose to do that. This may be something that the Big 12 kind of goes it alone in or you see other conferences do. But every conference has kind of a different situation, different set of inventory, different schools to market, different geographies.

But at the same time, this is a key data point in a market that doesn’t have a lot of them right now. So certainly, there will be a fair bit of nodding to this number, I would imagine.

But as I was saying before, too, I think that the headline number, the dollar figure, the money changing hands — that’s only one piece of this deal, right? And I think there’s a huge marketing component to this deal.

Monster is a — pun intended — marketing monster. They spend so much money promoting their products, marketing, and the Big 12’s going to be attached to so much of that now, both nationally and internationally. So, I think there’s a lot of value here that extends beyond just those headline dollar figures.

MARK BRODIE: You think value for the Big 12 to be associated with Monster, or value for Monster to be associated with the Big 12, or both?

DYLAN DITTRICH: I think I think both, but in my comments, primarily referring to value that the Big 12 can derive from being part of that Monster marketing machine. I think that’s a company that’s showing up and facing the consumer, not just across the country, but across the world.

And this is a conference in the Big 12 that wants to be innovative, that wants to kind of expand beyond its regional footprint. It’s a conference that’s holding international football games, holding games overseas, that wants to kind of plant its flag outside of its traditional footprint.

And I think a partnership like this with kind of a consumer giant like Monster has the potential to help them do that, and that’s something that I think people tend to overlook or maybe underrate when it comes to this deal.

MARK BRODIE: What do you think that this deal tells us about the economics of college sports at the moment?

DYLAN DITTRICH: Well, we’re seeing an ongoing trend of kind of the professionalization and the commercialization of college sports. These athletic departments, after the House settlement, they have big big expenses that they need to cover to be competitive — and not just cover those expenses, but to grow and and kind of become bigger properties.

And I think there’s very much an attitude of no stone left unturned and of being innovative to find new opportunities for revenue generation, and there’s a lot of different forms that that’s taken. And this is just one of them, but it’s it certainly doesn’t feel like anything that’s going away anytime soon.

I think we’re going to see the pendulum continue to shift towards commercialization, towards professionalization, and yeah, really trying to tap revenue streams and kind of maximize the business potential of these athletic departments, perhaps in ways that haven’t been done before.

MARK BRODIE: All right, that is Dylan Dittrich. He writes the Yahoo Sports Biz newsletter for Yahoo Sports. Dylan, nice to talk to you. Thank you.

DYLAN DITTRICH: Great to talk to you as well, Mark. Thank you.