Rakuten Inc., which paid the Golden State Warriors $60 million for a three-year jersey sponsorship in 2017, is looking to extend the partnership as the National Basketball Association finalists head into the final season of their deal.
The logo patch, on a player’s left shoulder and 2.5 inches (6.35 cm) on each side, is key to raising Rakuten’s brand awareness in the United States, said Amit Patel, who heads the e-commerce giant’s operations in the Americas, in an interview on Friday.
While it’s too early to evaluate the sponsorship’s impact on revenue, the Japanese giant has seen brand recognition among U.S. basketball fans jump 300 percent since the second season, according to Patel. The next NBA season begins in October.
“We certainly want to play the long game,” Patel said, speaking on the sidelines of the Rakuten Optimism event in Yokohama. “We continue to evaluate the opportunity and look for ways to extend its life.”
Rakuten founder Hiroshi Mikitani has a long history of backing sports in Japan, where the company gets about 80 percent of its revenue. The billionaire has used his ownership of the Tohoku Rakuten Golden Eagles baseball team and the Vissel Kobe soccer team to promote the company’s domestic e-commerce and financial services for 15 years. In 2016, he expanded the practice dramatically by signing a four-year jersey sponsorship with Spanish soccer club FC Barcelona for $235 million, followed by the Warriors deal a year later.
The company, looking to grow its overseas business, paid about $1 billion for U.S. rebates website Ebates Inc. in 2014. When Patel took the helm of the operations in May 2017, Rakuten’s brand recognition in the U.S. was close to zero, he said. Shortly after, Patel brought up the idea of sponsoring the Warriors to Mikitani. The idea got a boost in June of that year when the two attended a consumer goods conference in Berlin where Rakuten’s FC Barcelona sponsorship was a hot topic among executives. The deal with the Warriors was announced two months later.
Rakuten has yet to feel the full impact of the partnership, Patel said. The company began to re-brand the Ebates business, by far its biggest in the U.S., with the Rakuten name early this year, which means most customers watching Warriors games until then would not have been able to connect the two. The NBA All-Star event in Chicago in February, together with in-game activities during the season, will serve as opportunities to convert fans into customers, Patel said.
Mikitani, whose sport ventures also include sponsorship of the Spartan Race and the Rakuten Japan Open tennis championship, in June launched a live streaming and on-demand video service for Japanese soccer games. At the Friday event, Mikitani said the technology acts as a multiplier for the business value of sports.
“We got into professional baseball in 2004, when internet media was still in its infancy,” Mikitani said. “Advances in media technology make sports become more exciting and also increase the value of sport as content.”