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1.04-Licensing

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OBJECTIVES•Obj. A - Explain the

purpose of licensing in sport/event marketing.

•Obj. B Explain the benefits and risks of licensing.

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ESSENTIAL QUESTIONS•What are the purposes of licensing in sport/event marketing industries?

•How do sport and entertainment marketers benefit from licensing their trade mark properties?

•What risks do sport and entertainment marketers take in licensing their trade mark properties?

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OBJECTIVE - AExplain the purpose of licensing in sport/event marketing.

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Licensing A legal agreement that allows onecompany to use the trademarked

property of another company tomanufacture and sell its own products.

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Trademarked propertyTrademarked Property is the basis

for the licensing process

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Licensing isn’t:• Branding• Sponsorship• Endorsement

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Trademarked properties•NAMES – “Tony the Tiger”

•LOGOS -

•SLOGANS – “Just Do It” - Nike “Obey your Thirst” - Sprite

•GRAPHICS

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Branding Licensing isn’t branding.•Branded items only use the logo of the manufacturer not other company’s trademarks.

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Branding •Nike is a brand •Example: NIKE SWEATSHIRT

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SPONSORSHIPA company pays a fee to a team or an event

for the right to affiliate or (ATTACH) itself

with that team or event.

•T-Mobile Sponsor NBA•Sears Sponsor WNBA•Diet Coke Sponsors Taylor Swift•Coke Sponsors a the COKE 600 Race

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EndorsementA company pays an athlete or team

to promote its products by wearing

or using them and by appearing in

the company’s advertisements.

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EndorsementEXAMPLE:•HANES pays a fee to Michael Jordan to appear in its television commercials.

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Warm-up Which of the following is an example of branded merchandise:

a. Tiger Woods golf towelb. NCAA Nokia Sugar Bowl c. Allen Iverson jerseyd. Nike sweatshirt

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LICENSEE VS. LICENSOR

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LicensorAn organization or company that

owns the trademarked property.

Example: New York Yankees

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LicenseeA company that wants tomanufacture and sellproducts using trademarked

property is known as alicensee.

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Licensees

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Best licensed Products•T-shirts are the best-selling licensed clothing items

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Which of the following is a licensee:

•a. Monday Night Football•b. The Masters Tournament•c. Wrigley Field •d. Nintendo

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Obj. B Explain the benefits and risks of licensing.

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Why be a licensor?A. Profits Licensing brings in

enormous income.2. Even events that take place just once a

year can capitalize through licensing.

3. Example: Wimbledon makes almost $100 million annually in licensing revenue.

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Collegiate Licensed Products •College athletic departments use their licensing income to build up scholarship funds.

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LICENSEE FEES •The fee a licensee pays up front to use trademarked property is called a guarantee.

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ROYALTIES

•A percentage of actual sales profits

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The Risks of Licensing

•Licensing is a low risk business strategy for the licensor.

Licensees do all the work of developing, manufacturing, and selling the products.

•The main risk for licensors is loss of control over the marketing process.

•Teams can’t always guarantee the quality of their official licensed merchandise since they aren’t manufacturing it themselves.

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• the biggest risk for licensees The nature of the licensing agreement

• they are agreeing to pay a certain amount of money, the guarantee, no matter how much they make in profits. The minimum guarantee must be paid to the licensor no matter what.

• If licensees do not sell enough merchandise to cover that cost, they will have to pay it out of pocket. The location of the team and the type of sport are not risks for licensees.

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Advantages of Licensing •Brand building is an advantage for both licensors and licensees.

•Licensing reinforces the team’s image and brand to the public.

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Brand Building

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•Retailers give the best shelf space in their stores to licensed sport products because they are in high demand

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WE ARE THE CHAMPIONS!•Winning sport team sells the most licensed products

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INTERNATIONAL SPORTS LICENSING

Sport marketers have an advantage over all other types of licensors in the international marketplace because sports are

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