Lesson 6.2 – Licensing€¦ · 1/6/2017 8 LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing In 2014, the quarterback of the Super Bowl

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Copyright 1999 Prentice Hall

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Lesson 6.2 – Licensing

Copyright © 2014 by Sports Career Consulting, LLC

Licensing

The 2014 report shows growth in nearly every licensing category, with entertainment, trademark/brands, fashion and sports merchandise being the key revenue drivers. These four broad-based categories together represented 94 percent of all licensed revenues last year.

LESSON 6.2

Branding & Licensing


Sales of licensed products climbed for the third consecutive year in 2013, according to the International Licensing Industry Merchandisers’ Association’s 2014 Licensing Industry Survey.

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2013 worldwide retail sales leaders of licensed merchandise

Character related merchandise - $51.44 billion

Corporate brands - $22.5 billion

Fashion - $16.9 billion

Sports - $12.8 billion

LESSON 6.2



Licensing

Licensing

Sports teams and athletes may have licensing agreements with product manufacturers

Licensing:

Refers to an agreement which gives a company the right to use another’s brand name, patent, or other intellectual property for a royalty or fee

LESSON 6.2



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The licensor is the company or individual granting the license


LESSON 6.2


Examples of licensors:

The licensee the company or individual paying for the rights to use the licensor’s name or property


LESSON 6.2


Examples of licensees:

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LESSON 6.2


Licensee Examples


LESSON 6.2


Licensee Examples

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LESSON 6.2


Licensee Examples


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Licensee Examples

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The 3 P’s of licensing include:

Profit

Promotion

Protection

LicensingLESSON 6.2



Licensed products and merchandise are not manufactured by leagues, teams or schools, but rather by independent companies under an agreement with a sports entity

LESSON 6.2



Licensing and Merchandise

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Licensed products can be extremely lucrative

LicensingLESSON 6.2



In 2012, sales of licensed New York Yankees-branded fragrances exceeded Macy’s (exclusive retailer of the product) initial projections by 40 percent, prompting the company to signifcantly increase the number of stores in which the cologne/perfume was available (industry analysts estimated sales in the $12 million to $14 million range)

LicensingLESSON 6.2



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LESSON 6.2



LicensingIn 2014, the quarterback of the Super Bowl winning Seattle Seahawks bolted up the charts in the sales of licensed goods featuring his likeness, jumped 18 spots on the NFL Players Inc. list (which said sales of all individually licensed product sales surpassed $1 billion last year) and surpassing Peyton Manning as the highest selling NFL player.

Over the span of Star Wars' lifetime, $20 billion and counting of licensed goods has been sold, this on top of the $4.4 billion in tickets and $3.8 billion in home entertainment products

LicensingLESSON 6.2



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LESSON 6.2



Licensing

Despite debuting in the fall of 2013, analysts are already anticipating sales of licensed goods featuring characters from Disney’s blockbuster film, Frozen, will generate $1 billion annually for the company

LESSON 6.2



The LA Kings set an all-time Staples Center merchandise sales record during the clinching game of the Stanley Cup (and the day after) by selling $2.5 million in licensed gear — and that was just in the arena store

Fans spend a reported $2.9 billion a year on National Football League merchandise

Licensing

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LESSON 6.2



Total NBA product sales last year were about $3 billion

Back-to-back Rose Bowl appearances meant big business for the Wisconsin Badgers as sales of licensed merchandise hit $3.3 million in 2011, an all-time school record

Licensing

LESSON 6.2



Licensing

ESPN reported that Florida State University director of trademark licensing Sherri Dye said the school's merchandise royalties were $4.58 million last season, helped by the Seminoles’ victory in the NCAA football championship game.

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Licensed merchandise is made available through many channels of distribution

Special promotional deals create partnerships between the licensor and the licensee to help boost store traffic

LicensingLESSON 6.2




LicensingLESSON 6.2



The Collegiate Licensing Company generates huge profits from the sales of collegiate apparel at the local level within communities that show high levels of support for their collegiate athletic teams.

Click here to see a list of the top selling local merchants of collegiate apparel in 2014-14

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Because of high demand for licensed products and the wide distribution channels, both licensees and licensors face challenges from rampant counterfeiting

LicensingLESSON 6.2



Soon after the announcement that the Atlanta Thrashers NHL franchise would relocate to Winnipeg, Jets merchandise began appearing all over the Internet, despite the fact the franchise had yet to begin manufacturing any licensed merchandise. In an article appearing in the Winnipeg Sun, the newspaper reported finding a sweater described by an online site as being authentic with a price of just $28, however, officially licensed sweaters are expected to fetch closer to $130.

LicensingLESSON 6.2



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Major League Baseball uses a hologram sticker that makes a T-shirt or hat an official MLB product, making it easier for fans to identify counterfeit merchandise. MLB runs undercover investigations against merchandise counterfeiters year-round but it ramps them up every year for All-Star week.

The league cited statistics from the International Anti-Counterfeiting Coalition that says businesses worldwide lose an estimated $600-700 billion annually to counterfeiting meaning governments and taxpayers lose hundreds of millions because the sale of unlicensed products typically goes untaxed.

LicensingLESSON 6.2



LESSON 6.2



Licensing

During the 2011 Stanley Cup Final, authorities in Boston and Vancouver, B.C., seized more than $500,000 of fake merchandise. When the Bruins celebrated their championship with a parade in Boston, more than about $20,000 worth of counterfeit items was found.

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Players, teams, event names, entertainers and logos appearing on a huge selection of products

NCAA school logos find their way on to everything from pillows and bedding to waste paper baskets, wall clocks and bird houses

LicensingLESSON 6.2




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LESSON 6.2



DeLea Sod Farms, the company that supplies the New York Yankees with sod for their field, signed a licensing deal with the Yankees franchise and Major League Baseball to sell the sod at $7.50 for five square feet (and officially licensed Yankees grass seed) at New York City-area Home Depots

LicensingLESSON 6.2




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Team Grill’s licensing deal with the NFL’s New England Patriots allows them to produce two team branded gas grills that retail for $699 and $1,499.

LicensingLESSON 6.2




When Universal Studios in Orlando, Fla., opened its Wizarding World of Harry Potter attraction in 2010, the park’s revenue from licensed merchandise revenue doubled from the previous year (products included souvenir magic wands, Slytherin scarves, Dumbledore steins and Voldemort key chains, among other items based on the blockbuster movie series)

LicensingLESSON 6.2




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In 2011, Major League Baseball signed a three-year licensing deal with EyeBlack.com, a Maryland-based manufacturer of protective adhesives used to reduce sun glare, who will create branded versions of their products for all 30 MLB teams, the MLB World Series and the MLB All-Star Game

LicensingLESSON 6.2




LicensingLESSON 6.2




One of the hottest selling items in Brazil during the 2014 World Cup among local fans was a $14 dog shirt with Brazilian colors and the #10 on the back—the number of Brazil’s leading scorer, Neymar.

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Collectibles and Memorabilia have had a major impact on licensing

According to the New York Times, there are 5 million autographs collectors in the United States alone

According to Collector’s Digest, the sports autograph market is worth $500 million

Americans alone spend an incredible $57 billion on sports memorabilia

LESSON 6.2




Pete Rose, Major League Baseball’s all-time hits leader who is banned from baseball, still makes a reported more than $1 million a year signing autographs

In 1992, McDonald's offered a McJordan Burger (a quarter-pounder with cheese, onion, pickles, barbecue sauce and bacon). The dish came in limited markets, making the secret sauce limited as well. In 2012, a gallon of that sauce showed up on eBay for $10,000.

In 2012, a signed, game-used Kobe Bryant face mask sold on eBay for over $67,000

LESSON 6.2



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The uniform Don Larsen was wearing when he pitched the only perfect game in World Series history sold for $756,000 in 2014 in an online auction, including a 20% buyer's fee above the final bid of $630,000

In 2013, a 1928 World Series home run ball hit by legendary Yankee Lou Gehrig was auctioned off, ultimately fetching $62,617 (with the seller using the proceeds to help her son pay off his medical school debt)

LESSON 6.2




LESSON 6.2



Prior to the 2014 World Cup, 1,283 “collectible” gems were created using legendary Brazilian soccer star Pele’s hair (1,283 represents the total number of goals scored throughout his playing career) with estimates placing the cost of the souvenir somewhere in excess of $4,000

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LESSON 6.2




LESSON 6.2 REVIEW (ANSWERS)LESSON 6.2 REVIEW (ANSWERS)

1) Define licensing

Refers to an agreement which gives a company the right to use another’s brand name, patent, or other intellectual property for a royalty or fee


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LESSON 6.2 REVIEW (ANSWERS)LESSON 6.2 REVIEW (ANSWERS)

2) Distinguish between licensor and licensee

A licensor is the company or individual granting the license while the licensee is the company or individual paying for the rights to use the licensor’s name or property.


Documents

Lesson 6.2 – Licensing€¦ · 1/6/2017 8 LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing In 2014, the quarterback of the Super Bowl