Licensing in Sports

1. Licensing

2. Objectives

3. Why License?
To promote the sport brand (exposure, awareness,
loyalty, fan affiliation, etc..)
To increase revenues for the sport organization or
league
To protect the sport property from improper brand
use

4. Licensing Facts
College Sports has the longest selling season of
any major sports licensor, starting in August and
running through June.
College market sales have consistently been on
the rise the past five years.
Sales of non-apparel products continue to be
on the upswing as percentage change has
recently been in the double digits.
• One-fourth of all goods sold through licensed sports apparel
stores in 2012 will be college-branded
Licensing is a $17.5 billion worldwide
business.
$800-900m each year in
royalties
$3.32b
$3 b
$3 b
MLS - $394 m
$2 b

5. Licensing Model
NFL Properties
NY, NY
Licensee Retailer
Licensor
Agency
Governs the Contracts Consumer
Shirt retail: $35Shirt wholesale: $20
Rbk pays NFL
6 -10% of the $20
($1.20 - $2.00)
Shirt Cost: $8
Plus licensee fee
$1.20-$2/each
Total cost $9.20-
$10
Consumers are willing to pay
more for “officially licensed”
products!
Licensing success depends on
the success of retailers and the
licensee!!

6. Metrics Moment
NKU licenses its brand to Under Armour, Nike, Champion, and
Jansport to sell products in the NKU bookstore and local retail stores.
NKU charges a 10% royalty rate on all licensed merchandise.
Kroger purchases Nike NKU Sweatshirts for $35 each, and resells
them for $50. How much in royalties does NKU earn per sweatshirt?
$35 x .10 = $3.50
From what retailer does NKU sell MOST of its
licensed goods?

7. Main Types of Licensed
Products
Apparel CPG Novelties
Video games/
Fantasy Sports
Also, leagues license broadcasting rights and
mobile media (ringtones) rights!
In 2004, EA signed an exclusive
license through 2009 with the NFL
and the NFLPA to give them the
exclusive rights to use the NFL's
teams, stadiums, and players in a
video game. The deal, reportedly
worth $300 million and later
extended to 2013, has been both
criticized and praised. This exclusive
license has put an end to competition
from other official NFL video games

8. Promoting the license
programWhy? Royalties depend on promotional efforts to
encourage fans to buy licensed goods.
A licensing program should (at minimum):
Create brand awareness and positive
appeal
Penetrate existing consumer markets
Reach new markets and entice new
consumers
Growth
Strategie
s
Sport brand
communications

9. REMEMBER THIS???

10. Penetrate existing consumer markets
Market Penetration:
Existing market-existing product: Fantasy Sports,
Network broadcasting, get your customers to consume
more of what you already have! (Pro Sport leagues do not own
sport stats, but they can license athlete names!!)
New Product Development:
Existing market-new product: Increase consumption of
current customers by offering a wider array of licensed
products. Bengals underwear anyone?

11. Reach new markets and entice new customers
Market Development:
New market-existing product: Take the existing product
and market it to a new audience: i.e., NFL broadcasts &
plays in Mexico & England, attract women and youth
fans (NFL Pink).
Diversification:
New market-new product: Attract new customers by
licensing in a manner that will reach a new unique target
market.
Diversification: NASCAR partnered with The Cordish
Company to create the NASCAR Sports Grille, whose
customers are fans and non-fans alike.
Diversification: appeal to video game consumers with
sport licensed games

12. nflpink.com
Promoting to the Consumer
Licensed NFL merchandisers like Nike, Reebok, Adidas and
Gatorade are also making pink gear and souvenirs for fans, with
some of their proceeds going to breast cancer charities.

13. Prior to solidifying license agreements, parties agree on:
- Who is responsible for initiating PR and Publicity efforts?
- Typically, the league or licensor has the most credibility
- On-air publicity is very effective
- For large events, publicity is enacted months in advance

14. License Property
Protection
Identify Licensable Property (Marks): The portfolio
“The University owns and controls its name(s) and other marks, logos, insignias, seals, color
schemes, designs and symbols which include the use of, but are not limited to: "Kentucky ®"
"University of Kentucky ®", "Kentucky Wildcats ®", "Wildcats TM", "UK®," "UK Wildcats ®", the
interlocking UK marks ® with or without the ‘cat' ®, any wildcat mark ®, the UK Academic logo
with Memorial Hall silhouette ®, and The University's Seal ®.”

15. Questions?