1. 2012 - PGA Merchandise Show Adam Berg Senior Vice President INTERNATIONAL LICENSING INDUSTRY MERCHANDISERS’ ASSOCIATION (LIMA) WWW.LICENSING.ORG

2. Agenda Introduction to LIMA Brief overview of the worldwide licensing industry. Why companies use licensing to enter new markets. Questions that need to be asked. What to look for in a region. What to look for in a potential licensee.

3. LIMA – An Introduction LIMA IS THE WORLD’S LEADING TRADE ORGANIZATION FOR THE LICENSED MERCHANDISE INDUSTRY OVER 1,100 MEMBERS IN 32 COUNTRIES OFFICES IN NEW YORK, LONDON, MUNICH, TOKYO, HONG KONG AND SHANGHAI

4. LIMA LIMA’S MISSION: Staging and supporting trade, educational and social events that foster industry knowledge and exchange of business information and contacts; Serving as public advocates for the business of licensing globally through public speeches, authoring articles and a wide range of other public relations activities; Developing industry research and other support information;

5. LIMA LIMA’S MISSION (continued) Creating and publicizing an industry code of conduct; Organizing and supporting Licensing Industry Excellence Awards around the world, which annually recognize high achievement within the licensing community

6. LIMA LIMA SPONSORS THE WORLD’S LEADING LICENSING TRADE SHOWS: Licensing International Expo (Las Vegas) Brand Licensing Europe (London) Shanghai Licensing Show Hong Kong Licensing Show

7. LIMA LIMA’S WEBSITE IS THE PRIMARY PORTAL FOR GLOBAL LICENSING INDUSTRY NEWS AND INFORMATION WWW.LICENSING.ORG

8. Licensing – A Process and a Business Licensing Defined: Licensing is “Passion Leveraged” LICENSING IS THE PROCESS OF LEASING A LEGALLY PROTECTED ENTITY KNOWN AS A PROPERTY WHICH COULD BE A NAME, LIKENESS, LOGO, GRAPHIC, SAYING, SIGNATURE, CHARACTER OR A COMBINATION OF SEVERAL OF THESE ELEMENTS IN CONJUNCTION WITH A PRODUCT OR PRODUCT LINE.

9. Licensing – A Process and a Business LICENSING IS VITAL LICENSING IS VIEWED BY MANY COMPANIES AS A KEY ELEMENT OF A BRAND, PROPERTY OR EVENT’S MARKETING COMMUNICATION PROGRAM.

10. Licensing is World Wide LICENSING IN GLOBAL MARKETS RETAIL SALES OF LICENSED MERCHANDISE (in U.S. dollars ) UNITED STATES$104 BILLION U.K. $ 20.2 BILLION GERMANY $ 13.7 BILLION FRANCE $ 6.3 BILLION REST OF W. EUROPE $ 5.2 BILLION EASTERN EUROPE $ 0.6 BILLION

11. Licensing is World Wide RETAIL SALES OF LICENSED MERCHANDISE JAPAN$19.4 BILLION CHINA$ 1.7 BILLION REST OF ASIA$ 2.7 BILLION BRAZIL$2.5 BILLION REST OF LATIN AMERICA$ 2.1 BILLION AUSTRALIA/N. ZEALAND$ 4.0 BILLION OTHER$ 2.9 BILLION

12. Licensing – What Needs to be Known Licensing – What a Company Should Know: How to Maximize Potential and Minimize Risk: –Maximize: Understand licensing – it is not a “magic bullet”. Understand your audience – who are they? Understand your infrastructure and supply chain issues. Understand your media and what it is capable of delivering. –Minimize: Do your research about the license. Educate your sales force as to why licensing is important. Be sure your retail buyers are ready to receive licensed goods. Make your commitment and never over-promise.

13. Global Expansion and Licensing How it is done: –Find manufacturers who understand the region. –Find licensed products that are relevant. Its not enough to reflect the brand – the product has to do that as well as strike a chord with the local consumer. –Must solve the equation that balances what the property means globally and locally.

14. Global Expansion and Licensing How It is Done –Licensing brings the property forward successfully when the Licensor finds the licensee and product that “speaks the language”. –Contract with locals. –Strengthen communications by a large factor that you feel is overkill, and it will be just enough.

15. Global Expansion and Licensing How it is Done –Invest the time, resources and energy to the region. –Go there, return there, and make it routine. –Give it time within a disciplined framework both parties understand. –Overcome cultural challenges to creating expectations face to face; quantify if need be. –Expanding globally is hands on from HQ; it does not happen by itself; nor should it be expected to be such.

16. Global Expansion and Licensing Questions to be Asked: –Do I have a global licensing business now? Where am I selling licensed products? –Do I have the infrastructure needed? If yes – quantify it, flow chart it and study it. If not – am I prepared to put the infrastructure in place –The “3am Phone Call”

17. Global Expansion and Licensing Questions to be Asked –Does my company/property want to be exposed to overseas risks? –Does potential revenue warrant the investment? –Is my company a “long haul” oriented company?

18. Licensing is Fun Summary –Licensing is here to stay: Mature in the West Inevitable elsewhere –Understand the Licensing Business: Embrace it where appropriate Know its limitations and be guided accordingly. –It is a lot of fun: As business and life should be.