Licensed and Branded Merchandise

1. Licensed and Branded Merchandise Chapter 8

2. 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.

3. 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.

4. Intellectual Property The names and logos of sport organizations which are registered with the US Patent and Trademark Office which are protected as “trademarks.”

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

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

7. Trademark Infringement The reproduction, counterfeiting, copying, or imitation in commerce of a registered trademark.

8. 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.

9. Purposes of Licensing • Increase revenues – rights fees; royalties on merchandise sales • Brand recognition • Create awareness of product • Create interest in product

10. Growth ofLicensed Sports Merchandise Sales • 1990 - $5.3 billion • 1995 - $10.4 billion • 1996 – 13.8 billion

11. Steps in Developinga Licensed Merchandise Program • Conduct a trademark search • Screen prospective licensees • Police marketplace for trademark infringement

12. Approach by Professional Sports • Establish a “Properties Division” • Approves licensees • Polices trademark • Distributes licensing revenues • Coordinates marketing and sponsorships

13. Oversees 4 departments: • Sales • Marketing • Apparel licensing • Non-apparel licensing

14. 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)

15. Approach ofIndividual Professional Sports The athletes agents handle the licensing agreements and endorsements via negotiated terms set forth in contracts.

16. Approach by Colleges • 1973 – 1st college, UCLA • 1975 – NCAA “Properties Division” • 1980’s – college trademarks registered

17. 1980’s-1990’s – 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)

18. Issues and Trends • Pro sports labor strife • Over supply of products • Too many vendors • Over development of new products

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

20. Competition of Branded Apparel • Threat for licensed sports products • Manufacturing companies create their own brand name apparel

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