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Corporate logo rule will be tested when Cavs’ Smith takes court
BEN SHRADER
Law Bulletin columnist
Published: October 15, 2018
When NBA star J.R. Smith takes the court for the Cleveland Cavaliers later this month in the season opener, it won’t be a “Supreme” court. That’s because the league threatened to fine Smith if he doesn’t cover up his freshly inked tattoo of the Supreme logo.
Supreme is a streetwear, skate and fashion brand based in New York City. According to its website, the company which “opened its doors on Lafayette Street” surrounded by “a group of neighborhood kids, New York skaters and local artists who became the store’s staff, crew and customers … grew to embody downtown culture and play an integral part in its constant regeneration.”
It also grew in other ways — Supreme is roughly 50 percent owned by The Carlyle Group, which paid a reported $500 million for its stake. The “downtown institution” formerly the “home of New York City skate culture” is currently valued at more than $1 billion.
In August, New Jersey native Smith had the company’s logo tattooed on the back of his right calf. Shortly thereafter, the NBA informed Smith that he would be fined for every game that he failed to cover the tattoo, with a league spokesman noting that “NBA rules prohibit players from displaying any commercial logos or corporate insignia on their body or in their hair.”
The league’s position is rooted in the collective bargaining agreement between the NBA and the National Basketball Players Association. Article XXXVII, Section 2 of the labor agreement titled Uniform provides that:
“Other than as may be incorporated into his [u]niform and the manufacturer’s identification incorporated into his [s]neakers, a player may not, during any NBA game, display any commercial, promotional or charitable name, mark, logo or other identification, including but not limited to on his body, in his hair or otherwise.”
Though not common, the issue has come up before, notably with Smith’s former New York Knicks teammate Iman Shumpert. Shumpert, the former Oak Park and River Forest High School star and all-Illinois player, was required to remove an Adidas logo that he had shaved into his hair in 2013.
The league also banned Washington Wizards small forward Kelly Oubre Jr. from wearing a Supreme leg sleeve. Interestingly, Smith wore a Supreme sleeve in a game last year without repercussion. Perhaps more notably, in this context: Smith is not a paid Supreme endorser; he’s just an ardent fan of the brand.
Despite the league’s hard line on Smith and Shumpert, at least one player has been allowed to play with a corporate sportswear logo tattooed on his body. Los Angeles Clippers center Marcin Gortat has the Jordan Brand’s Jumpman logo inked on his right leg.
So what do Supreme and Adidas have in common that makes them different than Michael Jordan’s namesake brand and logo? Easy: They don’t have lucrative sponsorship deals with the NBA.
Nike, the biggest and arguably most recognizable sportswear brand in the world, is the official sponsor of NBA uniforms. It’s iconic Swoosh logo appears on the jersey of every NBA player — a privilege for which the company paid a reported $1 billion.
The Jordan Brand and its Jumpman logo are Nike entities. Smith also wears a Goodyear patch on his Cavaliers jersey, as the tire and rubber giant is the team’s official jersey sponsor to the tune of a reported $10 million per year.
It is likely that the NBA is contractually obligated to protect the interests of the companies who are paying upward of 10 figures to be exclusive sponsors and uniform suppliers.
In addition to the NBA, other major American team sports have players’ unions, which collectively bargain on behalf of their member players. The collective bargaining agreements for other leagues typically address players wearing corporate logos during official activities, including tattoos. For example, the Uniform Regulations provision of Major League Baseball’s labor pact, which covers adornments and markings, states that “No [p]layer may have any visible corporate markings or logos tattooed on his body.” Article 51 of the NFL bargaining agreement (titled “Player Attire”) “prohibit[s] [players] from wearing, displaying or orally promoting equipment, apparel or other items that carry commercial names or logos of companies in any televised interview on [c]lub premises, unless such commercial identification has been approved in advance by the [l]eague office.” Nike is also the official supplier of uniforms and sideline apparel for NFL teams.
Back to Smith’s Supreme tattoo. The NBA is considered a relatively player-friendly league and is obviously not against allowing its players to play with visible tattoos. However, the NBA is also unique compared to other major team sports in that the players wear relatively little clothing, leaving more of their body exposed.
The same Supreme leg tattoo that Smith now flaunts would be covered by the uniform if sported by, say, Chicago Cubs infielder Javier Baez. For his part, Baez has the Major League Baseball logo tattooed on the back of his neck (predictably, the league hasn’t had a problem with that one despite it being a “visible corporate marking or logo”).
In Smith’s and similar situations, the NBA has shown that it will prioritize protecting its sponsors and business partners. By preventing Smith from showcasing Supreme or Shumpert from highlighting Adidas, the league seeks to eliminate visible logos of competitors of its sponsorship partner Nike.
Why then, might it actually be good financially for NBA players if the association limits or prohibits their freedom to express themselves with visible corporate logo tattoos? Because despite the restraints on individual players like Smith and Shumpert, the restriction on corporate logos likely benefits players on a leaguewide level more than it harms them.
NBA players receive a cut of the sponsorship dollars that flow in from companies like Nike. The revenue generated from the NBA-Nike pact is “basketball-related income” or “BRI.”
The league’s owners and players share BRI. Per the labor agreement, the players receive approximately half of BRI. More BRI also leads directly to a higher salary cap, which results in higher player salaries. Accordingly, it is in the best interests of the players as a whole for the league to protect relationships with its biggest and most lucrative partners.
If the league loses money in the form of a contractual penalty or a lower deal the next time around, the players also lose money.
The question of whether Smith is fined any of his own money will be answered next week — Smith and the Cavaliers open their 2018-19 NBA regular season on Oct. 17. against the Raptors in Toronto.
Ben Shrader is an attorney at Hart McLaughlin & Eldridge in Chicago, where he handles a wide range of litigation matters. He can be reached at bshrader@hmelegal.com.