Licensed and Branded Merchandise

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Licensed and Branded Merchandise

• Chapter 8

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Licensed and Branded Merchandise

• Licensing a contractual method of developing
  intellectual property by transferring rights of
  use to third parties without the transfer of
  ownership.

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• Third Parties companies that manufacture the
  products (licensees)---Nike, Adidas.
• These companies purchase the rights to
  manufacture and sell products bearing the logos
  of sports organizations.

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Intellectual Property

• The names and logos of sport organizations which
  are registered with the US Patent and Trademark
  Office which are protected as trademarks.

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Trademarks

• Any word, name, or symbol used by companies to
  identify their goods and distinguish them from
  goods produced by other companies.

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• The Federal Trademark Act of 1946, called the
  Lanham Act protects trademarks.

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Trademark Infringement

• The reproduction, counterfeiting, copying, or
  imitation in commerce of a registered trademark.

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The Value of Sports Logos

• Take the experience home
• Substitute for the experience
• Show support for the team
• Sense of camaraderie
• Bond between fans and teams/players.

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Purposes of Licensing

• Increase revenues rights fees royalties on
  merchandise sales
• Brand recognition
• Create awareness of product
• Create interest in product

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Growth ofLicensed Sports Merchandise Sales

• 1990 - 5.3 billion
• 1995 - 10.4 billion
• 1996 13.8 billion

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Steps in Developinga Licensed Merchandise Program

• Conduct a trademark search
• Screen prospective licensees
• Police marketplace for trademark infringement

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Approach by Professional Sports

• Establish a Properties Division
• Approves licensees
• Polices trademark
• Distributes licensing revenues
• Coordinates marketing and sponsorships

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• Oversees 4 departments
• Sales
• Marketing
• Apparel licensing
• Non-apparel licensing

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Approach of Players Unions

• Promote fan identification with players
• Generate revenues
• Licensing agreements separate from leagues
• Licensing agreements jointly with leagues and
  share revenues (trading cards, video games,
  memorabilia)

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Approach ofIndividual Professional Sports

• The athletes agents handle the licensing
  agreements and endorsements via negotiated terms
  set forth in contracts.

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Approach by Colleges

• 1973 1st college, UCLA
• 1975 NCAA Properties Division
• 1980s college trademarks registered

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• 1980s-1990s growth licensing revenues
• 41 of colleges administer own licensing programs
• 59 of colleges use independent agencies
  (Collegiate Licensing, Licensing Resource Group,
  Black College Licensing Company)

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Issues and Trends

• Pro sports labor strife
• Over supply of products
• Too many vendors
• Over development of new products

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• Licensees meet orders of large retailers before
  small retailers
• Clutter from emergence of new leagues
• Ethics issues - especially for colleges

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Competition of Branded Apparel

• Threat for licensed sports products
• Manufacturing companies create their own brand
  name apparel

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• Consumers purchase manufacturers brand name
  apparel instead of sports apparel
• Decline in sales of sports apparel