Think of it as another profession for the Los Angeles Lakers – but in the business department. The iconic National Basketball Association franchise matched Canada’s BioSteel for its drink sponsorship, leaving longtime partner Gatorade, the parties informed CNBC.
Financial details of the agreement were not disclosed, but BioSteel is paying a fee for integrating its brand with the team’s intellectual property in deals like this one. Industry experts estimate that drink deals with top-market NBA teams can reach $5 million per season.
BioSteel will be branded on the Lakers couch, in the locker room and on signs in the arena. In an interview with CNBC on Monday, BioSteel co-founder and former pro hockey player Michael Cammalleri said the company was drawn to the high “visibility” of the Lakers. The team is made up of top NBA stars, including LeBron James and now Russell Westbrook, who was traded to the Lakers on August 6. BioSteel wants to expand its presence in the US market; therefore this deal will help.
“Having a partnership with the Lakers gives us that exposure and awareness so that we can now activate some of the distribution and sales initiatives that coincide with that,” said Cammalleri, who played 15 seasons in the National Hockey League.
Founded in 2009, BioSteel specializes in sports nutrition products, including beverages and protein powders. It added NBA star and Dallas Mavericks forward Luka Doncic to its stock selection last March. Doncic, who recently signed a $207 million five-year extension, joined National Football League stars Patrick Mahomes and DeAndre Hopkins as BioSteel stakeholders.
Cannabis company Canopy Growth bought a majority stake in BioSteel in 2019 for about $40 million, according to PitchBook estimates. Canopy Growth is traded on the Nasdaq and has a market cap of $6.1 billion.
Meanwhile, this deal will help the Lakers recover from pandemic losses. The Lakers will bring in about $400 million in revenue for 2021, down from $434 million last year, according to Forbes. Other business partners include Verizon, Delta and American Express.
BioSteel also has sponsorship deals with other NBA clubs, including the Mavericks, Toronto Raptors and Brooklyn Nets.
“Our focus has been on the NBA for now, but we’re working on some things,” Cammalleri said of tuning into more leagues. “We’re pretty confident in the strategy that we have. So we’re going about our business with that quiet confidence, and some of it is focused on the markets that you’ve seen our team do deals,” he added.
When asked if BioSteel is interested in the Lakers jersey, another top NBA asset up for auction, Cammalleri replied: “I think it’s more important right now that people see our product being consumed, because we need to build brand recognition. , especially in the United States. So a patch deal is a little less appealing to us than a liquid-to-lips moment on the couch.”
Although Gatorade lost to the Lakers, it still has a significant presence in the NBA. In 2017, Gatorade took over the naming rights for the NBA’s developmental league, now called the G League. Its parent company, PepsiCo, also joined James last March to endorse its Mountain Dew product.