Lesson 6.2 – Licensing
Branding & Licensing
LESSON 6.2
Licensing
1. Licensing industry continues to enjoy tremendous growth
2. Sales of licensed products climbed for the second consecutive
year in 2013, according to the International Licensing
Industry Merchandisers’ Association’s 2013 Licensing Industry
Survey.
3. The 2013 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 % of
all licensed revenues last year.
Branding & Licensing
LESSON 6.2
Licensing
2014 worldwide retail sales leaders of
licensed merchandise
1. Character related merchandise - $49.3 billion
2. Corporate brands - $21.6 billion
3. Fashion - $16.5 billion
4. Sports - $12.6 billion
5. Art - $3.9 billion
6. Collegiate - $3.9 billion
Branding & Licensing
LESSON 6.2
Licensing
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
Sports teams and athletes
may have licensing
agreements with product
manufacturers
Branding & Licensing
LESSON 6.2
The licensor is the company or individual
granting the license
Examples of licensors:
Branding & Licensing
LESSON 6.2
The licensee the company or individual
paying for the rights to use the licensor’s
name or property
Examples of licensees:
Branding & Licensing
LESSON 6.2
Licensee Examples
Mars, Inc. (Shrek Snickers bar with green filling)
Branding & Licensing
LESSON 6.2
Licensee Examples
Mattel, Inc.
(Harry Potter toys and consumer products)
Licensee Examples
Reebok (NFL apparel)
Branding & Licensing
LESSON 6.2
Licensee Examples
EA Sports
(rights to put NFL/NCAA players, stadiums and teams in its games)
Branding & Licensing
LESSON 6.2
Licensee Examples
Hasbro (Marvel toys)
Branding & Licensing
LESSON 6.2
Licensing
The 3 P’s of licensing include:
 Profit
 Promotion
 Protection
Branding & Licensing
LESSON 6.2
Licensing and Merchandise
Licensed products and merchandise are not
manufactured by leagues, teams or schools,
but rather by independent companies under
an agreement with a sports entity
Branding & Licensing
LESSON 6.2
Licensing
Licensed products can
be extremely lucrative
Branding & Licensing
LESSON 6.2
Licensing
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 significantly increase the number of
stores in which the cologne/perfume was available
(industry analysts estimated sales in the $12 million
to $14 million range)
Branding & Licensing
LESSON 6.2
Licensing
Following Whitney Houston’s tragic death in 2012,
analysts estimated her estate could earn $50 – $100
million within one year from album sales, DVDs,
merchandise and other licensing deals
Branding & Licensing
LESSON 6.2
Licensing
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
Branding & Licensing
LESSON 6.2
Licensing
Organizers of the 2012
Summer Games in
London are projecting
over $1 billion in sales of
licensed merchandise
(which would set an
Olympic record for
merchandise sales)
Branding & Licensing
LESSON 6.2
Licensing
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
Branding & Licensing
LESSON 6.2
Licensing
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
Branding & Licensing
LESSON 6.2
Licensing
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
Branding & Licensing
LESSON 6.2
Licensing
Licensing and Merchandise
Because of high demand for licensed
products and the wide distribution channels,
both licensees and licensors face challenges
from rampant counterfeiting
Branding & Licensing
LESSON 6.2
Licensing
Soon after the announcement that the Atlanta Thrashers
NHL franchise would relocate to Winnipeg, the newly named
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.
Branding & Licensing
LESSON 6.2
Licensing
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 AntiCounterfeiting 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.
Branding & Licensing
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.
Branding & Licensing
LESSON 6.2
Licensing
Licensing and Merchandise
 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
Branding & Licensing
LESSON 6.2
Branding & Licensing
LESSON 6.2
Branding & Licensing
LESSON 6.2
Licensing
Licensing and Merchandise
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
Branding & Licensing
LESSON 6.2
Licensing
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.
Branding & Licensing
LESSON 6.2
Licensing
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)
Branding & Licensing
LESSON 6.2
Licensing
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
Branding & Licensing
LESSON 6.2
Licensing
Licensing and Merchandise
In 2011, Sher-Wood (known primarily for manufacturing
hockey sticks and other equipment including gloves and
elbows pads) announced plans to introduce a line of USB
flash drives that come in the shape of a hockey player and
every NHL team will be represented (as will the Canadian
National team)
Branding & Licensing
LESSON 6.2
Collectibles and Memorabilia
have had a major impact on licensing
According to the New York Times, there are 5
million autograph 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
Branding & Licensing
LESSON 6.2
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
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
Branding & Licensing
LESSON 6.2
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 2013 in an online auction, including a 20%
buyer's fee above the final bid of $630,000
In 2012, 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)