Lesson 6.2 - Bremen High School District 228

Lesson 6.2 – Licensing

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Copyright 1999 Prentice Hall

Copyright

©

2014 by Sports Career Consulting, LLC

Branding & Licensing

LESSON 6.2

Licensing

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.

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.

Copyright © 2014 by Sports Career Consulting, LLC


LESSON 6.2

Licensing

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

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

The licensor is the company or individual granting the license

Examples of licensors:



LESSON 6.2

The licensee the company or individual paying for the rights to use the licensor’s name or property

Examples of licensees:



LESSON 6.2

Licensee Examples



LESSON 6.2

Licensee Examples



LESSON 6.2

Licensee Examples



LESSON 6.2

Licensee Examples



LESSON 6.2

Licensing

The 3 P’s of licensing include:



Profit



Promotion



Protection



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



LESSON 6.2

Licensing

Licensed products can be extremely lucrative



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 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)



LESSON 6.2

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.



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



LESSON 6.2

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

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



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



LESSON 6.2

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

.



LESSON 6.2

Licensing


 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



LESSON 6.2

Licensing


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 2014-14



LESSON 6.2

Licensing


Because of high demand for licensed products and the wide distribution channels, both licensees and licensors face challenges from rampant counterfeiting



LESSON 6.2

Licensing

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.



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 Anti-

Counterfeiting 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.



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.



LESSON 6.2

Licensing


 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



LESSON 6.2



LESSON 6.2



LESSON 6.2

Licensing


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



LESSON 6.2

Licensing


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.



LESSON 6.2

Licensing


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)



LESSON 6.2

Licensing


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



LESSON 6.2

Licensing


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.



LESSON 6.2

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


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



LESSON 6.2


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


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



LESSON 6.2

Blank Slide Available for Teacher Edits


LESSON 6.2 REVIEW (ANSWERS)

Branding &

Licensing

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


LESSON 6.2 REVIEW (ANSWERS)

Branding &

Licensing

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.


Lesson 6.2 - Bremen High School District 228

Lesson 6.2 – Licensing

The 3 P’s of licensing include:

Profit

Promotion

Protection

Licensed products can be extremely lucrative

Blank Slide Available for Teacher Edits

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Lesson 6.2 - Bremen High School District 228

Lesson 6.2 – Licensing

The 3 P’s of licensing include:

Profit

Promotion

Protection

Licensed products can be extremely lucrative

Blank Slide Available for Teacher Edits

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