Upon hearing the news of Anthony Davis wanting out of New Orleans this morning, I made a quick joke to twitter knowing that Utah is clearly not in the field of teams that could acquire Anthony Davis.
Truly think Utah has a real shot at Anthony Davis. Utah has the one thing New Orleans would do anything to have back in a trade: the naming rights to ‘Jazz’.— SLC Dunk (@slcdunk) January 28, 2019
It ended up getting a lot more attention than I thought it would. While it’s always a joke—or quick needle by New Orleans fans—to Utah whenever the name Jazz is brought up, most don’t expect the name ‘Jazz’ to return to New Orleans at this point. Like the Lakers, the history of the Utah Jazz is more than the name Jazz and the music it represents. Utah Jazz represents Stockton and Malone more than a
not so hip club playing the classic tunes of Miles Davis, Charlie Parker, or John Coltrane.
But that didn’t stop New Orleans fans from wondering, “What if?”
While New Orleans fans were already stoked by the idea of getting their old name back, I was surprised by how many Jazz that would be okay with it.
Jazz fans, if it meant getting Anthony Davis, would you be willing to give up the name ‘Jazz’?— SLC Dunk (@slcdunk) January 28, 2019
I've always thought the Utah Yetis would be a cooler name anyway— Jared Woodcox (@jaredwoodcox) January 28, 2019
If they changed the name to the Utah Brows just for AD...I would be okay with that. pic.twitter.com/49axOGqrnb— beauyoung (@beauyoung) January 28, 2019
seagulls, state bird. or utahraptors, which is what we should be anyway.— lex (@mflsforever) January 28, 2019
3 Way trade between Utah, New Orleans, and Memphis.— (@_Amir92) January 28, 2019
Utah gets Grizzlies, New Orleans gets Jazz, and Memphis gets Pelicans but changes it to Blues the next season
4 way, toronto gets grizzlies - way more in canada than utah & we have a raptor named for the state & are a well known dinosaur fossil spot, if were not the jazz, there’s nothing else we should be but raptors.— lex (@mflsforever) January 28, 2019
So that got me to thinking ... what would the name ‘Jazz’ be worth to the New Orleans Pelicans?
Estimating the worth of a nickname
Luckily for us, there has been an example of a sort of swap of a name. The Charlotte Bobcats were able to acquire the name “Hornets” after the New Orleans Hornets decided to rebrand as the Pelicans. Now as far as I can find the New Orleans Pelicans decided to rebrand solely by their own motivation, to which I call bull****. There’s no way you can convince me that a small market team in a city that isn’t wild about basketball threw away the only basketball brand name that had been a household name for almost 25 years to rebrand to Pelicans on a whim. It’s costly to rebrand as you’ll soon see with Michael Jordan. The Pelicans had to have been financially motivated to make the switch.
The Charlotte Bobcats getting the name Hornets back feels like the type of under the table deal players do with each other when it comes to getting the jersey number they’d prefer.
So let’s go with the costs of what we know as is reported and then estimate from there. The Associated Press reported that the cost of rebranding cost Michael Jordan at least a cool $4 million dollars. Those costs included rebranding everything from signs on lightpoles, uniforms, the floor, concession cups, to stationary. That wasn’t the acquisition costs nor the advertising firm, just the base cost of putting on new words and a coat of paint.
The now Charlotte Hornets also acquired the basketball history associated with Charlotte from the New Orleans Pelicans. That didn’t have a dollar figure as well.
So what could that be worth?
First off would come the design work. Back in 2013 AdAge estimated how much it would cost to rebrand the Washington Redskins in 6 months. That figure? $10-$15 million dollars. That was for a business worth $1.6 billion dollars.
Last year at this time, the Utah Jazz were worth $1.2 billion dollars. Some of that valuation is based on IP, or Intellectual Property. Part of what makes Utah so valuable is their ability to make money and drive the conversation in a one (two if you count RSL) sport town. The other part is the Intellectual Property of a recognizable brand “Jazz” because it’s been in the basketball zeitgeist for almost 50 years.
So how do we calculate the value of that Intellectual Property of the name “Jazz”? Let use a real world example of another business with a billion dollar valuation. It’s not an NBA team, but it’s in Utah: DOMO. Last year DOMO had a valuation of $2.3 Billion. Many said the valuation was too high, putting it closer to $1.7 Billion which could very well be what the Jazz are with now with Donovan, Rudy, better facilities, cashflow and a higher ceiling. If you look at their quarterly report, they estimate their Intangible Assets, which can include goodwill with customers, brand recognition and intellectual property, such as patents, trademarks and copyrights, at a value of $12,504,000.
Now this is an analytics company not an NBA team. They’re not trying to sling licensed merchandise and do crossover deals for additional revenue because their logo is on it. In 2016, it was estimated that the Utah Jazz make ~$97M/year from their brand specific to the Utah Jazz. So the average NBA team’s IP is going to run a lot higher than say your average business. The brand of the team is what makes the difference between the pricetag for the Jazz vs the Lakers.
So let’s say Utah’s IP is worth—to them—somewhere in the ballpark of $25 million dollars because they believe that their fans and their identity as a franchise in Utah still is worth a lot without the name “Jazz”. While Utah generates a lot of revenue off of the name Jazz, we have seen that they’ve thrown Jazz on almost everything that is the polar opposite of “Jazz” like baby blue pajamas, purple mountains, and black and copper monstrosities, and STILL have made money. The name Utah is still worth a lot and it’s worth noting their most popular jersey in recent memory is something that doesn’t have the word “Jazz” on it and is 8 colors of red and gold.
Now if Utah’s IP valued is at $25 million that makes it only 1.4% of their franchise’s value. Still a lot. So let’s get back to the trade market.
Can one use IP as a trade chip?
Not explicitly. There’s nothing that says you can and nothing that says you can’t. Say Utah did throw around the value of their name “Jazz” to New Orleans—hypothetically for this ridiculous scenario—it would have to be a wink-wink under the table type deal. We’ve VERY LOOSELY established that the name Jazz’s estimated worth to Utah $25 million/yr on their balance sheet. That sounds familiar to another contract that is worth $31M/yr in New Orleans.
The Utah Jazz could offer the New Orleans Pelicans Derrick Favors, Ricky Rubio, and Dante Exum with a 1st then add the naming rights in a handshake deal on the side for Anthony Davis. No one would know the Jazz name would be included until Utah decides out of the blue in the offseason to change their name after a deep playoff run or NBA Finals appearance.
However, New Orleans would be eaten alive by hometown fans, writers, and casual watchers for months for such a weak haul. Then somewhere in the summer the Pelicans would announce they were looking going after the ‘Jazz’ name that suddenly was about to become available by Utah’s sudden change of heart to a new name.
Why would New Orleans chance such a backlash?
One word: MONEY.
If New Orleans is planning on blowing it up, they risk a heavy financial hit to already low ticket sales and enthusiasm. The Charlotte Bobcats had a similar situation as they had little brand recognition and little fan enthusiasm with a terrible logo and terrible name. Yet when they acquired the Hornets name, that changed overnight. Andrew Adam Newman of the New York Times reported that Charlotte made some serious cash by returning to its roots.
Peter M. Guelli, an executive vice president with the Hornets who heads its sales and marketing department, said response to the rebranding had been profound. He said that merchandise sales were up 77 percent so far this year over last year, and that sales of new season tickets were second in the N.B.A. only to the Cleveland Cavaliers, where LeBron James is making his return. There are also 30 new corporate sponsors, including Mercedes-Benz and McDonald’s.
Jack Boyle, president of merchandising for Fanatics, the largest online retailer of licensed sports merchandise, said sales of Hornets merchandise this year had increased fivefold over sales of Bobcats merchandise last year.
“This exceeds just normal fan excitement at the beginning of the season,” Mr. Boyle said. “Clearly the change in identity back to the Hornets has had a really significant impact.”
Such an offer by the Utah Jazz might be impossible to resist for a team running on shared revenue check to shared revenue check. Utah could offer players not necessarily of the talent caliber of Anthony Davis because the financial dividends of the complete New Orleans Jazz could offset the immediate pain of losing Anthony Davis. The owner of Pelicans may not like losing a top 5 player, but I’m sure they’d trade them in a heartbeat if it meant their merchandise sales would increase 77 percent and season tickets would jump to second the following year.
What would happen to Utah?
Introducing your new Utah Stars. The Stars were the professional team to bring a championship to Utah and it would be fitting for Utah to move back to them. They could cash in immediately in merchandise sales by sellingretro Moses Malone, Zelmo Beaty, and Ron Boone merchandise. They could play off of their ABA roots much like the Indiana Pacers do.
The Utah Jazz would have an advantage to the rebrand that the Pelicans didn’t have when making the switch. The Utah Jazz have been to the playoffs two straight years, have a rising star in Donovan Mitchell, a soon to be All Star and defending Defensive Player of the Year in Rudy Gobert, and another top 10 player in Anthony Davis. This could propel their brand.
Brand recognition would take a hit the first couple years, but a championship would fix that brand recognition really quick, wouldn’t it?
Could this scenario ever happen? I highly doubt it. The Jazz name has been a part of Utah for too long that the Jazz’s owners would be better off selling pitchforks and torches to the angry mob to follow than Stars merchandise. The one caveat is in the last few years, the Utah franchise has shown that their brand is more related to their state than the name Jazz. You never say never, but the Jazz are as likely to give up their name as the Lakers theirs.
But if they ever did, that “Jazz” name could probably net them a small fortune ... or in this crazy scenario, a championship caliber team.