Part 3 - An Insider’s Guide to the World of Licensed Sports Products: The Landscape and some of the players

Greeting folks!

This note is written by Scott Sillcox in fall 2023 in response to a lot of readers asking me two questions:

A. You wrote and posted this 12 part blog in 2012-ish, is it still relevant today? Short answer - absolutely! The basics of sports licensing change very little over the years, so I strongly suggest that if you are trying to learn about sports licensing, read away! I have also tried to update certain areas where there have been significant changes, so I feel comfortable in telling you that this information is still highly relevant.

B. You mention that you are a consultant and might be able to help me, do you still do consulting? Short answer - absolutely. I work in the licensing field virtually every day of my life, so if you have questions or would like my help, contact me! The two primary ways I work are hourly telephone consulting ($175US/hour) and face-to-face meetings where I come right to your office for a full day ($1500US/day + $650 travel expenses).

Many thanks and happy reading -
Scott Sillcox

Please also 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.

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Greetings!

This is Part 3 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

I am a big believer in perspective. The first blog in this series explained how in the case of MLB, $5,000,000,000 of retail sales turns into only $10,000,000 (or less) per team. The second blog tried to make the point that you (a prospective licensee) need them (the licensing bodies) far more than they need you.

And in this blog I’d like to quantify the world of licensed sports products in North America.

I have spoken in my earlier blogs about Soft Goods Licensees vs Hard Lines Licensees. If a league had 100 licensees, roughly 15-20 would be soft goods licensees and 80-85 would be hard lines licensees. And in terms of sales, the soft goods licensees probably outsell the hard lines licensees – maybe 55% to 45%. But because it is so hard to become a soft goods licensee, and because this series of blogs is directed at people interested in becoming licensees, my focus is a bit more on the hard line licensees than the soft goods guys. But keep in mind that as far as revenue is concerned, the soft goods licensees are far fewer in number but they generate more revenue than the hard goods gang.

I have spent some time compiling some information about the number of current NFL, MLB, NBA and NHL licensees (The List of NFL, MLB, NBA and NHL Licensees), and this is presented below in spreadsheet format. This information has been compiled from a large number of sources, and in my opinion this sort of information has never been presented in a public forum – I have never seen a list like this anywhere. Largely because my company was never a licensee of the NBA, my list of NBA licensees ,is likely a little thin, but I still feel qualified to make some reasonable educated guesses about the total number of NBA licensees.

NEW INFO: Please also check out my searchable Online Directory of North American Licensed Sports Products Companies - there are 1500+ companies listed and it costs just $59 to use for three months. I can't help but brag about this piece of work - I put a lot of work into this website and I am proud of it - if you are looking for licensed sports products companies in North America, there is nothing on the internet that comes close to this resource. So please take advantage of this resource and "Search Away". If you're not sure if this database would be worth the investment, check out this 3 minute video that gives you a sense of what to expect.

Scott Sillcox' List of NFL-MLB-NBA-NHL Licensees as of 2010-2011

Scott Sillcox' List of NFL-MLB-NBA-NHL Licensees as of 2010-2011

(Please note that I updated this info as of February 2013)
It is my educated opinion that:

- There are probably 525 companies in North America who are a licensee of one or more of the NFL, MLB, NBA, NHL (see my online directory for the 525-ish NFL, MLB, NBA and NHL licensed companies that I have compiled).

- There are probably 75 companies in North America who are licensed by all four of the NFL, MLB, NBA and NHL.(See my online directory and do a search to find the names of these 75-ish companies.)

- My guess is that there are 2500 companies in North America who are a licensee of at least one US college/university.

- My guess is that there are 50-100 companies in North America who have licenses for more than 50 colleges/universities.


On a league by league basis, here are my estimates as to the number of licensees (sales figures from License Magazine – see Part #1 for more detail):

NFL:
This is a reasonably good guess with some data to back it up – please see my online directory for detail on the number of companies and their names
Soft goods: 40 companies
Hard goods: 130 companies
Electronics (hardware or software): 15 companies
Total: 180 companies
Total retail sales: $3,250,000,000
My guess is that each year approximately 10 companies do not have their NFL license renewed or go out of business, and that 10 new companies join the NFL ranks.

MLB:
This is a reasonably good guess with some data to back it up – please see my online directory for detail on the number of companies and their names
Soft goods: 50 companies
Hard goods: 250 companies
Electronics (hardware or software): 40 companies
Total: 320 companies
Total retail sales: $5,000,000,000
My guess is that each year approximately 20 companies do not have their MLB license renewed or go out of business, and that 20 new companies join the MLB ranks.

NBA:
This is a reasonably good guess with some data to back it up – please see my online directory for detail on the number of companies and their names
Soft goods: 40 companies
Hard goods: 120 companies
Electronics (hardware or software): 15 companies
Total: 180 companies
Total retail sales: $3,000,000,000
My guess is that each year approximately 15 companies do not have their NBA license renewed or go out of business, and that 15 new companies join the NBA ranks.

NHL (NHL USA & NHL Canada):
This is a reasonably good guess with some data to back it up – please see my online directory for detail on the number of companies and their names
Soft goods: 60 companies
Hard goods: 230 companies
Electronics (hardware or software): 25 companies
Total: 320 companies
Total retail sales: $2,000,000,000
My guess is that each year approximately 30 companies do not have their NHL license renewed or go out of business, and that 30 new companies join the NHL ranks.

NCAA (CLC + LRG + SMA + Direct with schools – see Blog #12 for more on CLC/LRG/SMA/etc.):
This is an educated guess without hard data to back it up, but almost no-one would be able to answer this question, so an educated guess is a starting point.
Soft goods: 500 companies
Hard goods: 2000 companies
Electronics (hardware or software): 150 companies
Total: 2500+ companies
Total retail sales: $5,000,000,000
My guess is that each year several hundred companies do not have their US college license renewed or go out of business, and that several hundred new companies take their place.

NEW INFO: Please also check out my searchable Online Directory of 1500+ North American Licensed Sports Products Companies. I can't help but brag about this piece of work - I put a lot of work into this website and I am proud of it - if you are looking for licensed sports products companies in North America, there is nothing on the internet that comes close to this resource - and it costs just $59 to use for three months. So please take advantage of this resource and "Search Away".

1. Of these 525-ish companies that I believe are licensed by one or more the the NFL, MLB, NBA or NHL, the biggest revenue generators are, of course, a handful of soft goods companies and electronics companies, namely:
- Reebok
- Nike
- Majestic / VF
- EA Sports
But no-one reading this blog is going to be a Reebok or EA Sports any time soon, so let’s not spend too much time with “the biggies”.

2. For some licensees, like those listed below, their sales of licensed sports products is a (very) small portion of their business, ie companies which you would know better for their non-licensed products:
- Acushnet (Titleist & Footjoy)
- BIC (lighters)
- Hallmark Cards
- Hasbro (Nerf)
- Madcatz
- Rawlings
- Riddell
- Timex
- Victoria’s Secret
- Wilson Sporting Goods
- Zippo (lighters)

3. Let’s take the 525 companies which are licensed by one or more of the NFL, MLB, NBA, NHL. Now let’s leave aside the big name soft goods companies (Nike, Reebok, Majestic, New Era) and the electronics companies (EA Sports, 2K Sports, PlayStation), and the companies for whom licensed sports products is a small percentage of their annual revenue (like the ones listed above – BIC, Hallmark, Hasbro, Timex, Victoria’s Secret, etc.), and that leaves us with about 475 companies for whom the majority of their revenue comes from licensed sports products.

My guess is that the biggest of these 475 companies (see list below) might have annual revenues of $75 million, maybe $100 million and those in the top 10 would have sales in the $30-$50 million range. These are companies who NFL Properties calls members of their “Million Dollar Club”, companies whose annual sales generate at least $1,000,000 of royalties for the NFL (meaning their annual wholesale sales of NFL licensed products must be at least $9,000,000 – the math being $9,000,000 x 12% royalty rate = $1,000,000 of royalties). Some of the revenue leaders in this group of 475 companies are, I believe:
• Boelter Brands
• The Danbury Mint
• Fabrique Innovations
• Fathead
• The Highland Mint
• Hunter Manufacturing
• The Northwest Company
• Outerstuff
• PSG / Pro Specialties Group
• Panini Group
• Rico Industries / Tag Express
• Team Beans / Forever Collectibles
• Tervis Tumbler
• Topps
• Trends International
• The Upper Deck Company
• Wincraft + McArthur Towel
Forgive me if I have missed some obvious ones – the NFL, MLB and NHL licensing people know who these companies are but they aren’t likely to publish a list any time soon, so absent that information, please accept my educated guess and I welcome your feedback.

Continuing with these 475 companies for whom the majority of their revenue comes from licensed sports products, the average annual revenue might be $10 million. And this is perhaps the most important point I would like to make in this blog: The average licensed sports product company (with approximately $10 million of annual revenue) is likely much smaller than most people would have guessed. The licensed sports industry is an industry heavily populated by a large number of “little guys”.

A few closing thoughts:

- With respect to the number of new licensed sports companies each year, the “NCAA” (see Part 12 for a proper explanation of the NCAA – for now I use the term as verbal shorthand) - licenses several hundred new companies per year, vs the NFL/MLB/NBA/NHL which combined might license 50-75 new companies each year.

- For many years those of us in the licensed sports business thought, and said quite publicly, that we were largely immune to economic downturns – the thinking being that in tough times people will still spend discretionary money on relatively low priced licensed sports products that make them feel good in support of their favorite team. In fact, I still read this “immune to recession” quote – and that’s from people whose companies got walloped in 2008-2009! The absolute truth of the matter is that the vast majority of licensed sports companies saw their sales drop by 20%, 30% and even 40% in the last half of 2008, and quite a few licensed sports products companies never recovered. So if someone tells you that the licensed sports business largely recession proof - forget it, that’s just a lot of hot air and bravado!!!

- If you have seen my You Tube Video introducing this 12 Part Series of Blogs, you may recall that I gave two pieces of advice to entrepreneurs wishing to obtain a license(s) to produce licensed sports products. This advice was based on the understanding that getting a soft goods license as a one or two person entrepreneur/organization is almost impossible – to get a soft goods license from the NFL/MLB/NHL/NBA, you really need to have an established company with a sales force, distribution, manufacturing and employees.

So with that in mind, I advised the entrepreneur seeking a license, whether they had a soft goods or hard lines product idea, to:

- Focus on the NCAA first. As the numbers above suggest, there are several hundred new NCAA licensees each year vs 50-75 new NFL/MLB/NHL/NBA licensees each year. The barriers to entry and the investment needed are much friendlier in the NCAA world than that of the NFL/MLB/NHL/NBA.

and/or

- Work with an existing licensee re an NFL/MLB/NHL/NBA product idea. I know many of the companies in the Licensee List shown above, and if you are reasonable and have realistic expectations, I believe I can help you navigate your way to finding the right company to work with.


That’s all for Part #3 of “An Insider’s Guide to the World of Licensed Sports Products: The Landscape and some of the players”.

Thanks for reading and all comments are welcome!

Scott


PS from fall 2023: In case you weren't aware, I created and constantly maintain a searchable Online Directory of 2500+ North American Licensed Sports Products Companies – it can be found at www.LicensedSports.net and only costs $59 to use for three full 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). There is nothing like it anywhere on the internet, and I update the database weekly, oftentimes daily.

Virtually all 2500+ company records have a contact name with title, phone number and email address. In many cases, I list up to six contacts within the company. What's more, many of the records have a Linkedin url so you can learn much more about that contact including if you know people in common.

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 for soft goods, check out this terrific and highly searchable resource at www. LicensedSports.net .


PPS from fall 2023: I am a very active consultant to people looking to learn more about the licensed sports product industry - you can find the full detail here.  I spend almost every day in the licensed sports product field and I work with between 300 and 500 clients each year. There are three primary ways I work with people:

1. Hourly telephone consulting
2. Full day face-to-face meetings where I will go almost anywhere in North America to spend a full day with you and giving you a fire hose amount of information that is directly applicable to your circumstances.
3. I have a bundled package of services for those people who know that they want to work with an existing licensee.

So visit here for more detailed info and let me know how I can help you move your idea forward.