12 Part Blog Description

Are you looking to learn as much as you can about the business of sports licensing? Then please read the 12 Part "An Insider's Guide to the World of Licensed Sports Products in 12 Parts: Practical Lessons from the Trenches" - all 12 parts of the blog can be found within this site. Click here to start with the Introduction.

Thursday, March 1, 2012

Part 10 - An Insider’s Guide to the World of Licensed Sports Products: Packaging

Please note: This 12 part series initially appeared on my "Heritage Uniforms and Jerseys" blog, but I moved it in March 2012 to this blog which has a more single-focus on the world of licensed sports products. Thanks! Scott Sillcox

Greetings!

This is Part 10 of a 12 Part Series of blogs Scott Sillcox wrote called “An Insider’s Guide to the World of Licensed Sports Products in 12 Parts: Practical Lessons from the Trenches”. For a backgrounder on Scott Sillcox and his company, Maple Leaf Productions, please see the introductory blog and/or watch his 11 minute introductory video. Scott is available to consult with anyone interested in pursuing a sports license.
The 12 Parts of this Licensed Sports Products blog are:
Part 1: How Licensing Works - Follow The Money or How $5,000,000,000 can be less than you think
Part 2: What’s Involved in Getting a License – You need them far more than they need you
Part 3: The Landscape and some of the players
Part 4: Quality Control – Where The Real Power in Licensed Sports Lies
Part 5: Royalty Reporting and Audits
Part 6: Selling Licensed Goods - Why it’s not as easy as it looks
Part 7: Players Associations and Current vs. Retired Players
Part 8: Royalty Rates – Is 12% the norm and when 12% isn’t enough
Part 9: Local Licenses – myth or reality?
Part 10: Packaging
Part 11: Ten Things (Actually 12 Things) I Learned Along The Way
Part 12: Ten More Things (Actually 14 Things) I Learned Along The Way

Greetings!

To tell you the truth, I have been somewhat dreading telling the story of “Packaging”. There’s no getting around the fact that Packaging is not a very sexy topic. So I will admit at the outset: Packaging - a bit dull? For sure. But Packaging - important? To licensees, hugely!

In the big picture, most leagues have established fairly elaborate standards when it comes to packaging of licensed sports products. In its most basic form the packaging standard will govern the use and placement of the league’s licensed products hologram. But for most leagues packaging is far more than the use of a hologram.

If you don’t mind, I’m going to use the NFL as my primary packaging example, although I could have just as easily chosen MLB or the NBA or the NHL.

The NFL has a fairly rigid, and lengthy, set of packaging guidelines that licensees have to follow if they want their product to be approved for sale by the NFL’s Quality Control Department (see Part #4 for more on the hugely important role of the QC Department).

The packaging guidelines have two elements:
1. Licensed Product Authentication Products
aka sewn-in labels, hangtags and holograms
2. Actual product packaging


1. Soft Goods
For Soft Goods licensees, the packaging guidelines deal with the Licensed Product Authentication Products, namely:

A. Labeling affixed to /sewn onto the product (sewn-in label)
B. The NFL hangtag that is attached to the product (NFL hangtag)
C. The hologram that is usually built right into the hangtag (hologram)
D. The licensee hangtag that is attached to the product (licensee hangtag)

Samples of two styles of "Sewn-in Labels" - one combined label (on the left) and two separate labels (on the right)

Sample of league hangtag/hologram and licensee hangtag

There are many rules related to these items, but the good news for Soft Goods Licensees is that in most cases the licensee can (and must) buy the NFL hangtag and hologram from the league’s exclusive supplier of officially licensed hangtags and holograms (OpSec Security Inc., Parkton MD), and therefore you have two less things to worry about. Keep in mind that you have to buy these hangtags/holograms from OpSec – they aren’t free – and prices range from a few cents each for holograms to upwards of $0.15 each for some combination hangtag/holograms.


2. Hardlines
For Hardlines licensees, the NFL has assumed that almost every hardlines product needs some sort of packaging and they have designed a set of guidelines, what they call a “Package Goods Program”, with the goal of creating a consistency across all NFL licensed packaged goods.

For the better part of 2000-2007, the look that the NFL wanted for packaged goods featured a red band on the entire left side of the package. Beginning in 2008, the NFL switched to an all-black/predominantly black background package design. If you walk into an NFL team store at a stadium near you, you will see what the NFL desires – a consistent look for most of the “packaged” or “hardlines” goods – a “black” look. Good or bad (and I skew towards the latter), they have achieved their goal.

Simple example of NFL "Red Band" packaging style used from 2000-07

Simple example of MLB packaging that we used - MLB's guidelines mainly had to do with the size and placement of the logos

The NHL was, when this product was made, the the least restrictive league when it came to packaging and the majority of the packaging rules concerned the size and placement of logos. Beginning in 2008-ish the NHL adopted an "all black" packaging design somewhat similar to the NFL's 2008 all-black look.

Another example of the NFL's old "red band" packaging design

Here is a new style NFl All Black Package - where's the sell?


More than anything, my issue has to do with the fact it seems to me that packaging has the potential to be a very important tool in a licensee's sales arsenal, but if licensee's hands are almost completely tied as we conform to a predetermined standard chosen primarily for consistency, then sales will suffer. I simply believe that in trying to achieve consistency, sales are being lost, not gained. I could carry on about how much money must have been spent creating these guidelines, and how much time and effort must be wasted (I mean spent) policing and enforcing these guidelines through an overworked and underpaid Quality Control staff, but I won’t…

Now off my soapbox and back to the topic at hand…

The NFL packaging guidelines cover a range of packaging types, including:
- clamshells
- boxes
- boxes with windows
- one-sided header cards
- two-sided header cards
- belly bands

The packaging guidelines cover such things as the size and placement of all logos printed on the package, how and where the holograms can be placed on the package, and many more rules about the actual packaging design itself. I don’t mean to belabor the point, but for boxes alone there are rules for the:
1. Front of box background
2. Actual product front
3. Product “callout” / product description + the NFL shield logo
4. Hologram on front
5. NFLPA logo (if applicable)
6. Back of box background
7. Barcode
8. Sides of box

If you would like to see the NFL's 2008 packaging design guidelines, which I would suggest couldn't be more complicated if you tried, please contact me. Please note that when it comes to NFL hangtags, Soft Goods licensees will order these directly from OpSec so you don’t have to worry about designing hangtags yourself.

In the grand scheme of things the point of this blog is simply this: You cannot take the packaging of licensed products lightly or you will not pass the final stage of the Quality Control Approval process and you will not get your product to market.

Here are a few other packaging bits and pieces, partly demonstrating what a minefield packaging can be:

A. Post-season programs
Most leagues, especially MLB, have a special post-season licensed product hologram program (if you have a World Series license, you have to use World Series holograms, not regular holograms). It doesn’t end with correctly ordering post-season holograms from OpSec (yes, MLB uses OpSec as well – ditto the NHL and NBA), it only begins there because MLB specifies that you must account “for every single hologram you purchase, and all unused holograms must be returned to OpSec.” Holograms typically come 1000 to a roll, and “each sticker on used rolls must be counted and noted by licensees before being returned to OpSec. And Major League Baseball Properties reserves the right to audit licensees to verify their sales of postseason products and the use of hologram stickers.” You can’t make this stuff up folks… Yikes!!!

B. What licensees are (and are not) allowed to order from OpSec
In the case of the NHL (and ditto the other leagues), “There are a number of different NHLE authentication products available to NHLE licensees depending on the types of products you are licensed to market (i.e. apparel, novelties, etc.). NHL Enterprises has made the determination of which products you are required to use and has [told] OpSec which type of authentication product you are authorized to receive and required to order. If NHLE has identified you to OpSec as a licensee authorized to receive more than one product because you are distributing products in more than one classification, you must specify to OpSec at the time of your order which products you need.” Once again, you can’t make this stuff up.

C. Authentication Prices
I thought it might be interesting to see OpSec’s NHL Authentication Products price list (from 2008). No editorial comment – I just thought it would be somewhat interesting to show a price list:
OpSec's NHL Authentication Products Price List

In retrospect, I find it somewhat telling that I gave every blog in this 12 part series a subtitle – every one except Part 10:Packaging. My subconscious must have been at work, knowing how potentially dull (but necessary) a topic this would be. That being said, if I was to do it over, I should have subtitled this blog “Packaging: Not for the faint of heart” because like it or not, in the world of licensed sports products, Packaging is time consuming, complicated and cannot be ignored.

Thanks for reading and as always, all comments are welcome!

Scott

PS Way back in 1992 an organization called The Coalition to Advance the Protection of Sports logos (CAPS) was formed as an alliance between The Collegiate Licensing Company (CLC), Major League Baseball Properties, Inc., NBA Properties, Inc., NFL Properties LLC, and NHL Enterprises, L.P. to address common trademark protection and enforcement matters of its members and to help consumers identify counterfeits. After a period of relative quiet, it would appear that CAPS has become quite active in policing all sorts of product "violations", or what they at least feel are product violations. I have shown some of the info below as examples of sewn-in labels, hangtags and holograms, images of which are hard to find on the internet. Their website says for more information to call 1-800-TEL-CAPS (835-2277) and some of these have been updated on the CAPS site so best to visit it directly.

MLB Authentication products - dated info from 2001 but still somewhat valid

NHL Authentication products - info from 2008-ish


PPS In March 2012 I launched a new, searchable Online Directory of 1500+ North American Licensed Sports Products Companies – it can be found at www.LicensedSports.net and only costs $59 to use for three months. This is a highly searchable directory of licensed sports products companies in North America, companies that have been licensed by various sports leagues (NFL, MLB, NBA, NHL, NCAA, Nascar, MLS, etc.) as well as the various players’ associations (NFLPA, MLBPA, NBAP, NHLPA) and there is nothing like it anywhere on the internet. I update the database weekly, sometimes daily.

So if you’re looking for all the licensed sports products companies based in Connecticut, or all of the NFL licensees which sell housewares, or all companies licensed by the NBA and the NHL and MLB, check out this terrific and highly searchable resource at www. LicensedSports.net .

You might be asking yourself why did Scott Sillcox spend so much time and effort to create this Online Directory?

The answer is simple. I have a fair amount of knowledge about the licensed sports products business, knowledge that seems to be in scarce supply, especially on the internet. After spending 15+ years in the licensed sports products business, I accumulated a wealth of knowledge that I am happy to share. This blog and modestly-priced Online Directory are designed to share that information - information that is simply not available anywhere else on the internet. This blog and Online Directory are my way of giving back and helping people interested in the world of licensed sports products. I am also available as a consultant to people wanting to enter the licensed sports business (either by obtaining their own license or working with an existing licensee) as well as to existing licensees and would be delighted to chat with you if you think I might be able to help you in some way.

PPPS: This is just a quick FYI that in the spring of 2017 Scott Sillcox will be continuing the multi-city tour of North America that he started in the spring of 2013. While in each city, I will be meeting face-to-face with people who want to learn more about sports product licensing.

If you are considering going through the process of acquiring a sports license(s), or if you are considering working with an existing licensee, you should strongly consider meeting with me live and in person. If you have been dreaming about your product and the opportunity it represents for months, maybe years – now’s the time to move your idea forward! Take advantage of me coming to a city near you.

1. You can meet with me for a full day session – from 8:30am – 5:00pm - just you and me (or you and your team if you wish). The full day one-on-one session fee is $1500.

2. You can meet with me for a half day session (4.5 hours) – either in the morning or the afternoon. This half-day session is also one-on-one - just you (or your team) and me. The half day session fee is $900.

3. New for 2017: You can meet with me for two hours - the timing depends on my other meetings. The two-hour session fee is $600.

The cities and dates for the Spring 2017 tour are:
1. Feb 21 - 23 (Tues - Thurs): Boston
2. Feb 28 – Mar 2 (Tues - Thurs): Atlanta
3. Mar 7 - 9 (Tues - Thurs): Washington DC
4. Mar 21 - 23 (Tues - Thurs): Chicago
5. Mar 28 - 30 (Tues - Thurs): Princeton NJ & NYC area
6. Apr 4 - 6 (Tues - Thurs): Cleveland & Columbus, OH
7. Apr 11 - 13 (Tues - Thurs): Dallas
8. Apr 18 - 20 (Tues - Thurs): Ft. Lauderdale FL
9. Apr 25 - 27 (Tues - Thurs): Las Vegas
10. May 1 - 3 (Mon - Wed): Los Angeles
11. May 4 – 5 (Thurs – Fri): Seattle
I can send you a suggested meeting agenda - just ask - but because our one-on-one time together will be totally focused on your needs and your story, no two sessions are ever the same so the agenda is highly flexible.

If your city is not listed above and you would like me to come to you, I’m happy to go almost anywhere in the continental US or Canada as long as you book a full day session and pay a one-time all-inclusive travel fee of $500. Thus for a flat fee of $2000 I will come right to your door and spend a full day with you.

To register, simply call me, Scott Sillcox, at 416-315-4736 or email me at ssillcox@rogers.com and book your face-to-face time - you can lock-in a confirmed session right over the phone.

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Thank you for taking the time to add a comment - all input is welcome, especially the constructive kind! All the best - Scott