Licensing a sports brand provides access into a lucrative fan market, where the sport and team popularity can translate into significant product sales. Some of the biggest brands include the NFL, Major League Baseball, Basketball, Hockey, NASCAR and Colleges and Universities.
Sports brands typically look for experienced companies with a track record with their product, national distribution, sales reps and the documentation to verify their financial viability. They don’t want you to use their property to get into business; they want you already to be in business. If you’re a small business, you’ll have to convince the licensor that your company can handle any boom in sales that might occur with the license.
Most leagues have long-standing relationships in apparel and shoe categories with big licensees. But many other segments are wide open to small manufacturers. By keeping abreast of the licensors changing priorities, you can find new niches. For example, in the collegiate market, there are opportunities to license non-apparel products for some of the smaller colleges and universities. Sports licensors also like new innovative products that fit unfilled niches because they help keep their brand refreshed at retail.
Royalties for most sports brands run 12% and higher. The specific percentage depends on variables such as the brand, market size (local or national) and product categories. Many leagues have a set royalty rate that’s typically non-negotiable. All of them will require a minimum guarantee (expect five to six figures), and usually require an advance payment of 25% – 50% of that guarantee.
You can visit league websites to get information about their licensing requirements and application process. Although you can do the application process on your own, consider enlisting the help of a licensing consultant or other expert. They know the process and have relationships that can get the door open much faster. If you are seeking rights to several sports brands, a licensing expert will save you time and money.
Licensing a sports brand is an expansion strategy that gives you access to a market of sports fans on a local, national or global scale. It let’s you take advantage of their broad consumer awareness, and you get the added benefit of live games and on going advertising without the cost.
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Rand Brenner is President / CEO of Licensing Consulting Group, an intellectual property management and licensing company specializing in assisting clients in IP Management, Strategic Consulting, Acquisition of Licensing Rights, and Property Representation. Rand has licensed some of the biggest Hollywood blockbusters, including “Batman” and the “Mighty Morphin Power Rangers”, both of which generated billions of dollars in worldwide merchandise sales. He has lead various international licensing programs as both licensee and licensor, and through consulting projects focused on licensing strategy, brand development, sponsorship sales and property representation.