 Copyright 1999 Prentice Hall 8-1 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 Copyright © 2014 by Sports Career Consulting, LLC 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.

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 Branding & Licensing Copyright © 2014 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 © 2014 by Sports Career Consulting, LLC

The licensor is the company or individual granting the license Copyright © 2014 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 © 2014 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Examples of licensees:

Copyright © 2014 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2014 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2014 by Sports Career Consulting, LLC LESSON 6.2 Branding & Licensing Licensee Examples

Copyright © 2014 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 © 2014 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 © 2014 by Sports Career Consulting, LLC Licensing and Merchandise

Licensed products can be extremely lucrative Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

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) Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing In 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 Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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

LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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.

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 © 2014 by Sports Career Consulting, LLC

Licensing and Merchandise Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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 here

Licensing and Merchandise Because of high demand for licensed products and the wide distribution channels, both licensees and licensors face challenges from rampant counterfeiting Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

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. Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

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 $ 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 © 2014 by Sports Career Consulting, LLC

LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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.

 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 © 2014 by Sports Career Consulting, LLC Licensing and Merchandise

LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

LESSON 6.2 Branding & Licensing Copyright © 2014 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 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 © 2014 by Sports Career Consulting, LLC Licensing and Merchandise

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. Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing and Merchandise

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) Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing and Merchandise

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 Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing and Merchandise

Licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing and Merchandise 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.

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 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

Collectibles and Memorabilia have had a major impact on licensing 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 autographsreported 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 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

Collectibles and Memorabilia have had a major impact on licensing 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 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

Collectibles and Memorabilia have had a major impact on licensing LESSON 6.2 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC 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

Blank Slide Available for Teacher Edits LESSON 6.2 Branding & Licensing Copyright © 2014 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 © 2014 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 © 2014 by Sports Career Consulting, LLC