Licensing
SPORTS AND ENTERTAINMENT MARKETING
What is licensing?
 A legal agreement that
allows a company the
right to use another’s
brand name, patent, or
other intellectual
property for a royalty fee
Why is Licensing Important
 Licensing generates
income for sports
organizations and
entertainment events
 Offers companies
additional access to their
target markets
Licensing is NOT:
 Branding:
 Branded items do not use another company’s trademark
 Sponsorship:
 When a company pays to affiliate itself with a team or event
 Endorsement:
 A company pays an athlete or team to promote its products by
wearing or using them
Licensors
 Licensor: the company
that holds the rights to
trademarked property
 Examples:

The NFL

Virginia Tech

Pittsburgh Penguins
Licensors
 Types of SEM Licensors:

Sports Leagues

Individual Teams

Individual Athletes

Entertainment Companies

Individual Entertainers
Licensees
 Licensees: The company
that wants to
manufacture and sell
products using
trademarked property
 Examples:

Clothing (Reebok, Nike)

Video Games (EA Sports, 2K)
Who is the Licensor? Licensee?
 Licensor: Minnesota
Twins
 Licensee: Watch
Manufacturer
Who is the Licensor? Licensee?
 Licensor: NBA
Kobe Bryant
 Licensee: 2K Sports
Who is the Licensor? Licensee?
 Licensor: Kentucky
Wildcats
 Licensee: Nike
 Nike is licensed (given
permission to sell”)
items containing the
Kentucky logo.
Licensed Products
 Example
 ANYTHING can be
licensed

Key chains, banners,
furniture, jewelry
 Clothing = 60% of all
licensed sport
merchandise sales

T-Shirts are the most
popular item of all
How Do Licensors Get Paid?
 Guarantees:

The fee a licensee pays up
front to use the trademarked
property

Based on Expected Sales
 Royalties

Percentage of the actual
sales
Licensor

Advantages
Disadvantages
Increased profits with

marketing process
little extra work

Low Risk

Free advertising

Build brand awareness
Loss of control over

Inability to:
 guarantee
quality
 control
prices
 control
where
merchandise is sold
Protecting Property
 Trademark
 Without
a trademark,
anyone could use your
logo and profit from it
 With
a trademark,
they are charged to
use your logo
Protecting Property
 Trade Dress

Refers to visual
characteristics of a
product or its packaging

Includes

Color schemes

Textures

Design, shape and
placement of words,
graphics and decoration
Trademark Infringement
 The
reproduction,
copying, or
counterfeiting of a
registered mark
 There
is up to $1 Billion
worth of counterfeit
products each year
Class Activity
 Students are to complete the Harry Potter Licensing
Activity