 Copyright 1999 Prentice Hall 8-1 Lesson 6.2 – Licensing Copyright © 2010 by Sports Career Consulting, LLC

Licensing Industry has increased from $160 billion in 2001 to $191 billion in 2009 LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC The licensing industry continues to enjoy tremendous growth $191 billion $160 billion

2009 worldwide retail sales leaders of licensed merchandise (rank in parenthesis) Disney Consumer Products - $27.2 billion (1) Warner Bros. Consumer Products - $6 billion (4) Nickelodeon/Viacom Consumer Products - $5.5 billion (5) Major League Baseball - $5 billion (6) Marvel Entertainment, Inc. - $4.9 billion (8) LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC 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 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

The licensor is the company or individual granting the license Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Examples of licensors:

The licensee the company or individual paying for the rights to use the licensor’s name or property Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Examples of licensees:

Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2010 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

The 3 P’s of licensing include:  Profit  Promotion  Protection Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

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 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC Licensing and Merchandise

Licensed products can be extremely lucrative Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

With gross sales of over $500 million dollars worth of Olympic related souvenir items, organizers of the 2010 Olympic Games in Vancouver profited $46 million from the sale of licensed merchandise Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

2010 estimates suggest Michael Jackson's estate has generated over $100 million in licensing and merchandise revenues in the year since his tragic death, from the "This Is It" concert movie and subsequent TV show, to a video game deal and the upcoming Jackson-themed Cirque du Soleil shows LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC Licensing

Major League Baseball uses a hologram sticker that makes a T-shirt or hat an official MLB product, making it easier for Anaheim police officials to crack down on counterfeit merchandise sales during the 2010 All-Star game. 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 $ billion annually to counterfeiting meaning governments and taxpayers lose hundreds of millions because the sale of unlicensed products typically goes untaxed. Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC In 2010, Disney projected over $2.4 billion in sales of licensed products tied to “Toy Story 3”. Another Disney film, “Cars”, has averaged $2 billion annually in retail sales of branded products since its 2006 release. Licensing

LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC Organizers of the 2012 Winter Games in London are projecting over $1 billion in sales of licensed merchandise (which would set an Olympic record for merchandise sales) Licensing

LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC In 2010, sales of Chicago Blackhawks licensed merchandise were up 325% (compared to 2008), bolstered by the team’s first Stanley Cup victory in nearly 50 years Licensing 2010 World Cup organizers forecasted online sales of counterfeit event souvenirs, memorabilia and sportswear expected to be worth $14 million during the initial stages of the tournament alone

Licensing and Merchandise  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 Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

 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 Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC Licensing and Merchandise

LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

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 in 2009 to sell the sod at $7.50 for five square feet (and officially licensed Yankees grass seed) at New York City-area Home Depots Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC Licensing and Merchandise

In 2009, Team Grill signed a licensing deal with the NFL’s New England Patriots to produce two team branded gas grills which they introduced at the team’s training camp. The Patriots grills retail for $699 and $1,499. Licensing LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC Licensing and Merchandise

LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC  In 2008, the National Football League Players Association received $35 million in video game licensing fees from a licensing deal with Electronic Arts, makers of the popular Madden video game franchise  In 2010, sales of Chicago Blackhawks licensed merchandise were up 325% (compared to 2008), bolstered by the team’s first Stanley Cup victory in nearly 50 years Licensing

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 A piece of music memorabilia is sold every 15 seconds on eBay LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

Collectibles and Memorabilia have had a major impact on licensing In 2002, a fan paid $10,000 for a wad of chewed bubble gum discarded by Arizona Diamondbacks outfielder Luis Gonzalez A poster from the 1932 movie, Mummy, sold for $453,500 In 2009, former New York Yankees first basemen Jason Giambi purchased his old locker at Yankee Stadium for $50,000, according to USA Today's website LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

Collectibles and Memorabilia have had a major impact on licensing In 2009, an Elvis Presley fan paid $18,300 for a single lock of his hair at an auction The hand painted decorative drum, used as the centerpiece for the art on the "Sgt Pepper's Lonely Hearts Club Band” album, sold for $1.1 million in 2008 (a record price for Beatles memorabilia) LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

Blank Slide Available for Teacher Edits LESSON 6.2 Branding & Licensing Copyright © 2010 by Sports Career Consulting, LLC

Branding & Licensing 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 Copyright © 2010 by Sports Career Consulting, LLC

Branding & Licensing 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. Copyright © 2010 by Sports Career Consulting, LLC