3 Facts About Sports Licensing and Merchandising
Thanks to sports licensing and merchandising, it’s easy to stop by a store or go online to get a shirt for just about any sports team. In addition to apparel, you can find other fun products like tailgating supplies, home décor, home goods, and other accessories. The process of creating those products, however, is not so simple. Learn about three of the most important factors affecting sports merchandising and licensing.
1. Licensing Programs
Image via Flickr by ChadCooperPhotos
For sports licensing, it’s important to understand that different entities handle various licenses. For professional sports, the league generally has a “properties division” which controls the rights to all team and league trademarks, including team and league names and logos. Meanwhile, the athletes’ names and likenesses are typically licensed by players associations. In both cases, the trademarks are licensed to certain vendors, who are then able to manufacture products with these names, logos and/or likenesses, and part of the revenue is distributed to the rights holder.
While this is obviously a much larger venture for professional sports, many college athletic departments and sports organizations (such as the U.S. Tennis Association) also have similar licensing programs facilitated by their sport managers.
2. The Importance of Marketing
A lot of work goes into each and every piece of sports merchandise available today. In fact, teams of marketers plan out every detail, from the design to the product types to the sales promotions. For instance, colleges may use alumni data to determine which products are most worthwhile to manufacture.
Another prominent finding in this area is women’s merchandising. More teams are creating products and apparel designed for and marketed to women based on their research regarding female fans. This had led to significant increases in sales for numerous sports teams across the country.
3. Elements of a Licensing Agreement
Every detail of a product is planned out before it is merchandised. That all starts with the licensing agreement, an official legal document which directs the licensing and merchandising process. You’ll find the following elements in a sports licensing agreement:
- Quality control: There are typically provisions made to ensure that the final product meets the team’s or athlete’s quality standards.
- Time frame: Strict release dates are often included, especially if the merchandise will correspond to sports seasons or a major event.
- Profits: The agreement includes details about the expected profits to be made, including whether or not a contract will be renewed based on sales figures.
- Royalties: Percentages are determined for how much of the profits will be paid out as royalties to the league, the team, or the athlete.
A legal team is used to create a solid licensing agreement between the licensing program and the vendor. Legal action can be taken if the terms laid out in the contract are not met.
These three facts are some of the most important things to know about sports licensing and merchandising. Any sport manager should be well aware of these details in order to best provide for the future of their team and their athletes. Use this information to create better profits in your team’s merchandising sales.