This blog provides information and answers questions about the world of licensed sports products in North America. Written by a licensee, Scott Sillcox, this blog contains information about sports licensing that cannot be found anywhere else on the internet. NFL, MLB, NBA, NHL, NCAA/college, MLS, NASCAR, UFC, PGA, WWE as well as the NFLPA, MLBP, NBPA, NHLPA. If you are new to sports licensing, please see my 12 part series described immediately below.
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.
Wednesday, March 21, 2012
Ode to a wastebasket: The J. Chein Company and a 40 year old licensed sports product
At the bottom of this blog I have added some text that isn’t overly readable, so please feel free to bypass it. I have written and included it largely as a way to use the powers of the internet to try to find anyone out there who might have in their possession a list of early NFL, MLB, NBA or NHL licensees. The reason I am trying to find these lists is to do a study on the longevity of licensees – also a pet project.
I have previously touched on the subject of early licenses and longevity:
A. Sports Specialties Corporation and David Warsaw, generally considered the grandfather of the licensed sports industry
B. The turnover of NFL licenses from 2003 to 2012
C. And to this small body of work I am adding, through this blog, the story of The J. Chein Company, aka Cheinco (pronounced “Chain-co”), another pioneer in the business of licensed products in general and licensed sports products in particular.
So without further ado, here is the story of The J. Chein Company – Cheinco – an early licensed sports products company.
I have owned the wastebasket pictured below since I was 13 years old in 1971. It’s a classic, says “National Hockey League Services 1971” along the seam, and has “Cheinco Housewares – J. Chein & Co. Burlington, NJ 08016” stamped on the bottom.
The J. Chein Company intrigues me for two reasons:
1. As mentioned, I have owned this wastebasket since 1971. I think this is a great product – it is well made (still going strong and doing yeoman work on a daily basis for 40 years and counting); it uses all the then-current teams’ logos and thus was a brilliant early example of a licensed product that overcame the “regionalism” that limits sales of licensed products and thus could be sold in any hockey market (modern licensees take note!!!); and I think it’s quite attractive in a licensed-sports-products sort of way. Just great work on Cheinco’s part.
2. As Alan Jaffe, author of “J. Chein & Co, American Toymaker”, wrote in 1995: “The Chein company pioneered the process of product licensing in the 1920’s and 1930’s, purchasing the art and rights for comic character toys featuring Popeye [Popeye the cartoon debuted in 1929], Felix (Felix debuted as a silent movie in 1919 and as a comic strip in 1923], then later the Disney characters, and eventually the Ninja Turtles and company advertising logos, such as Coca Cola.” How about that – Cheinco was purchasing the art and rights - licensing – in the 1920’s!
Here, in Mr. Jaffe’s words, is a summary of the story of The J. Chein Company. Content for this article is from the June 1995 issues of a magazine called “Inside Collector”, and is written by Alan Jaffe, author of a book called “J. Chein & Co, American Toymaker”.
The J. Chein Company
The company began in a loft in New York City in 1903, with a metal-stamping operation run by Julius Chein. The company produced small tin prizes for the Cracker Jack boxes and other small toys for five and dime stores. Although the Chein Company made the advertising tins that we collect in its later years, its reputation is built on the nostalgic tin toys and tin banks that are so collectible.
Robert Beckleman, the last president of Chein Industries Inc., says that Julius Chein had a friend with the American Can Company who convinced the toy maker to lithograph designs on metal instead of painting them. American Can did the litho work for them until 1907, when Chein opened a plant in Harrison, New Jersey. They manufactured lithographed noisemakers, horse-drawn carts and coin banks which were sold mainly through the Woolworth chain stores.
Julius Chein was killed in a riding accident in 1926. He fell or was knocked from his horse, in Central Park, although there are variations on the story of his death. He was known for his violent temper, and was known to fly into a rage over something that went wrong at the plant. Stories tell that he had even been known to take off his watch, throw it on the floor, and jump on it when he was angry.
Back to the story of his death, it is rumored that he died of an apoplectic fit when his horse refused to jump. All that is documented, of course, is that he was riding his horse when he was killed. Chein had a disability that may have attributed to his bad temperament. He lost one of his arms as a child in a fireworks explosion. He had been fooling around with fireworks, which went off and blew off his arm (or part of it).
Mrs. Chein inherited the toy making company after her husband's death and turned the reins over to her brother, Samuel Hoffman. Mr. Hoffman had worked for Chein earlier when he was younger, but had left the Chein Company to start his own competing toy company, Mohawk Toys. The Chein Company flourished for decades under his direction, producing some of its most popular toys. Mr. Hoffman was a significant step in building the company in the early years.
In the early 1940's, the metal working company retooled to come to the aid of the war effort. Instead of toys, Chein made munitions: nosecones and tails for bombs, and the casing for incendiary devices. Times following World War II were prosperous years, but that time also marked the introduction of foreign made toys. The Japanese were exporting the small mechanical toys inexpensively, which had a tremendous impact on the Chein Company. Chein countered this by making larger mechanical toys that would be bulky and very costly for the Japanese to send to the United States. This time period led the Chein Company to produce some of the most collectible of any of the toys it ever manufactured. The Ferris wheel, which Chein had been producing since the 1930's, was refined, the company's first roller coaster was manufactured in 1949, the Playland Merry-Go-Round in 1950, the Space Ride and larger Rocket Ride came along in the early 1950's.
In 1949, the Chein Company left its 50,000 square foot facility in Harrison and built a new shop in Burlington, New Jersey - a more economical one floor plant of 75,000 square ft. Most of the front-line supervision, most of the toy and dye-makers, lithographers, and the very key manufacturing personnel made the move to Burlington. In peak seasons, Chein employed 600 people at the new factory.
Two problems contributed to later difficulties for the Chein Company. In addition to the onset of small foreign toys, giving the company its first real competition, the company still had strong ties with Woolworth, and nurtured their relationship. At this time Woolworth was the number one variety store and controlled some of the distribution of toys. It was inconceivable for them to consider a separation from Woolworth, so all Chein toys were still being sold only through this one outlet. The other problem was that plastic was available as a cheaper material to make toys, but Mr. Hoffman, still in control of the Chein Company, refused to turn to plastics. He didn't believe in the viability of plastic as a material, a shortcoming that greatly contributed to the demise of the company.
The Chein company pioneered the process of product licensing in the 1920s and 1930s, purchasing the art and rights for comic character toys featuring Popeye, Felix, then later the Disney characters, and eventually the Ninja Turtles and company advertising logos, such as Coca Cola.
Still, the company was working with a material that was rapidly becoming obsolete. Plastic was quickly taking over metal fabrication in both the toy and housewares divisions. Steel was too expensive, plastic was the new base material and the wave of the future. Rejecting plastics, refusing to involve their products in television advertising, and not selling to the mass merchandisers and discount stores, the company could not survive much longer. They did try to move into plastics, but it never quite worked for them.
Then in the mid-60s, Samuel Hoffman retired from Chein. Shortly afterwards the U.S. government hurried the end of the production of tin toys because of the hazards of their sharp edges. The cost of retooling to curl the edges of the toys was cost prohibitive, and thus ended the Chein era of tin toys.
The Chein toy division expanded its marketing and development, acquiring the Learning Aids Group, including its Renwal Plastic Division. Although they made toy planes, boats and cars, what most of us remember most from this company is the Visible Man and the Visible Woman.
In downsizing efforts a few years later, Renwal was sold and the toy division of Chein was discontinued. The company turned all of its attention to housewares in 1976, which they had been producing since the mid-fifties. Their products included kitchen canisters, bread boxes and one of their most successful items -- wastebaskets. It is in this time period that their advertising tins started being manufactured. Many of the Cheinco tins were given away empty when the products were purchased, sitting next to the actual products or on special displays in the grocery stores. There were also sets of tins, e.g. Sunkist California Dream Tin, Heinz Pearl Onions, and Maxwell House Coffee that were sold in department stores, packaged as a cannister set.
In the 1980's Cheinco Industries, produced a series of lithographed steel "carry-all" tins including Donald Duck, Star Wars and Oreos. Throwbacks to the two-handled pails of the 1920's and 1930's, these tins ins were too small to carry an entire lunch, but nonetheless turned up in lunch box collections. It was also around this time, that Bristol Ware, a division of Cheinco, reproduced the very popular roly poly Tobacco Tins. (Note: not sure when the Bristol Ware Division started, came into being or how production was broken down).
The company continued with the housewares until the late 1980's, when the company was sold to the Atlantic Can Company and was then known as the Atlantic Cheinco Corp. The Atlantic Can Company produced cake and cookie tins, but was beset by problems including chemical odors being released from the plant and the fact that they were, according to bankruptcy proceedings "a seasonal company trying to go counter-seasonal". The company, one of the world's leaving manufacturers of metal lithographed containers, including cookie tins, kitchen canisters, and wastebaskets filed for bankruptcy in February 1992, two years after one of their biggest successes, 700,000 Ninja Turtle wastebaskets were sold! Later that year Ellisco Inc., a Pennsylvania company, purchased the assets of Cheinco.
Many thanks for reading!
Scott
PS Here is what our friends at Wikipedia have to say about "J. Chein & Company”.
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I am trying to find a list of NFL licensees from the 1960’s or 1970’s or 1980’s; a list of MLB licensees from the 1960’s or 1970’s or 1980’s; a list of NBA licensees from the 1960’s or 1970’s or 1980’s; and a list of NHL licensees from the 1960’s or 1970’s or 1980’s.
More specifically, I was wondering if anyone out there (perhaps a former licensee or a former employee of one of the leagues’ licensing departments?) has a list of any of the following:
Lists from the 1960’s:
1. A list of NFL licensees from 1960 (or thereabouts).
It is possible that there wasn’t any formal licensing until 1963 when a company known as Sports Specialties Corporation became the first official licensee of the newly founded "National Football League Properties". See Blog Part 12 for more on Sports Specialties Corp. and its founder David Warsaw. http://licensedsports.blogspot.ca/2012/03/insiders-guide-to-world-of-licensed_6196.html
2. A list of MLB licensees from 1960 (or thereabouts).
The previously mentioned Sports Specialties Corp started selling licensed MLB bobblehead dolls in 1960 si it’s possible a “list” of licensees might exist from the early 1960’s. MLB Properties, which is still in existence today, was formed in 1966, but there may have been a predecessor organization known by a different name.
3. A list of NBA licensees from 1960 (or thereabouts).
It may be that there was no formal licensing of NBA product in the early 1960’s, or it may have started later on in the decade. NBA Properties Inc. was founded in 1967 but it is possible that it operated under a different name/structure in the early-mid 1960’s.”
4. A list of NHL licensees from 1960 (or thereabouts).
We know from a famous licensed products lawsuit (Boston Professional Hockey Club vs Dallas Cap & Emblem) http://bulk.resource.org/courts.gov/c/F2/597/597.F2d.71.77-1280.html that the NHL’s licensing body officially known as “National Hockey League Services Inc.”, aka NHLS, was in operation at least by 1968. But we don’t know when NHLS began operations – an educated guess would be some time after MLB began their operation in 1960 and prior to the 1968 date mentioned in the lawsuit.
Lists from the 1970’s:
1. A list of NFL licensees from 1970 (or thereabouts).
In the 1970’s the licensing body was, and still is, “NFL Properties”.
2. A list of MLB licensees from 1970 (or thereabouts).
MLB Properties, which is still in existence today, was formed in 1966, and thus operated throughout the 1970’s.
3. A list of NBA licensees from 1970 (or thereabouts).
NBA Properties, which is still in existence today, was formed in 1967, and thus operated throughout the 1970’s.
4. A list of NHL licensees from 1970 (or thereabouts).
As mentioned above, I know for certain that in 1970 the licensing body was officially known as “National Hockey League Services Inc.”, aka NHLS. I have read, and written (in Blog Part 12), that NHL Enterprises began in 1969, but this is clearly not the case for two reasons: It was known as National Hockey League Services (NHLS) at least until at least 1971 (I have an NHL wastebasket that says National Hockey League Services 1971” on it), and perhaps much later. And secondly, we know that NHLS existed in 1968, so the 1969 date doesn’t make sense. I wondered if in saying that NHLE began in 1969, the writer was referring to NHLE or its predecessor, but that doesn’t even make sense given tat NHLS was in existence in 1968. I am certain that the NHL licensing body was known as NHL Enterprises Inc. from at least 1981 – so the gray area at the moment is from 1972 to 1980. In 1996 the name was changed to NHL Enterprises, L.P.
Lists from the 1980’s:
1. A list of NFL licensees from 1980 (or thereabouts).
The licensing body was, and still is, NFL Properties.
2. A list of MLB licensees from 1980 (or thereabouts).
The licensing body was, and still is, MLB Properties.
3. A list of NBA licensees from 1980 (or thereabouts).
The licensing body was, and still is, NBA Properties.
4. A list of NHL licensees from 1980 (or thereabouts).
I am certain that the NHL licensing body was known as NHL Enterprises Inc. from at least 1981. In 1996 the name was changed to NHL Enterprises, L.P.
Thanks for any list-finding help - I'd really appreciate it!
Tuesday, March 20, 2012
Licensed Sports Products and the ebb and flow of time: What can change in 10 short years
But time is a curious master, and I wanted to share with you the slightly bigger picture of what time can do and what the passage of time reveals.
When I became an NFL licensee in 2000, there were a large number of licensees – perhaps 300 or more. Things ebb and flow, and shortly after I became a licensee the NFL made a conscious decision to significantly reduce the number of licensees – a real bloodletting as I recall. There could be all sorts of reasons for the NFL to decide to reduce the number of licensees (then or now), but the prevailing thought at the time, as it was explained to me by several members of the NFL licensing team, was that if the NFL had six companies producing headwear, they would fight and bicker and point fingers at each other and generally make life miserable for the NFL licensing staff, but more importantly, they would compete in the marketplace and lower the wholesale, and therefore retail, prices of ball caps. Now on the surface of things that sounds like a good thing – companies competing and prices being reduced - but look at it through the eyes of the NFL licensing team at the time…
Let’s say each of the six companies sold 500,000 ball caps, and let’s say the average wholesale price of each cap was $7.50. The NFL’s royalty (at the 2002 royalty rate of 10%) would be:
500,000 caps/company x 6 companies x $7.50 each wholesale x 10% royalty = $2,250,000 in royalties
But remove the competition (ie reduce the number of licensees from 300+ to 100), and the prices for caps are going to rise. And the thinking was that regardless of price, the number of caps sold will be the same (perhaps a flaw in the thinking I realize, but accept it for now). In this scenario, the NFL royalty would be:
3,000,000 caps/company x 1 company x $10 each wholesale x 10% royalty = $3,000,000 in royalties.
And not only would the royalties increase by 25% by reducing the number of licensees, but the NFL licensing staff headaches of trying to adjudicate the fighting and finger-pointing between licensees would also largely go away. A win-win if ever there was one for the NFL licensing team, and thus the rationale for reducing the number of licensees.
Whether you agree with the thinking or not, accept for the moment that the prevailing thinking in 2000-2001-2002 was that by reducing the number of NFL licensees, the royalties collected would increase and the headaches would decrease.
So between 2000 and 2003, the number of NFL licensees decreased from 300+ in 2000 to just less than 100 by 2003.
September 2013: I used to show a list of NFL licensees that was given to me by the NFL in 2003, but I have been asked by the NFL not to publish that list - strange but true. This isn't a big deal, so let's not sweat it. Suffice it to say that the list, which I have, shows the NFL having just less than 100 licensees and since I was given this list by the NFL in March 2003, I will presume that it is more or less accurate.
Turn the hands of time ahead to 2008, and the NFL was continuing to make further reductions in the number of licensees. The thinking, as it was explained to me in March 2008 at the NFL Hardlines Summit in Miami, was that the NFL wanted “blue chip” licensees, and by reducing the number of licensees (from 100-ish where it had hovered for 5 years) to 80 while simultaneously increasing the annual guarantees somewhat significantly, they would shed some of the smaller, riskier companies and yet still increase the royalties generated on the basis of increased annual guarantees. “If you want to remain an NFL licensee, you’re going to have to prove you belong by paying for that privilege.”
Turn the hands of time to 2012, and the pendulum has clearly swung the other way. By my count there are approximately 175 NFL licensees in 2012, a very significant increase since 2008.
Why has the pendulum swung the other way? A host of reasons, including:
1. The NFL lost the American Needle court case in 2010, and regardless of what the NFL might say publicly, the Supreme Court ruling meant the NFL needed to increase competition and that meant increasing the number of licensees, particularly on the apparel (softgoods) side of things.
2. The NFL licensing team had some turnover after 2008, and with new people come new ideas. “What do you mean they reduced the number of licensees and stifled competition – what were they thinking?”
3. The NFL licensing team realized that by limiting competition, they were also limiting creativity and ingenuity, and they were actually starving the baby, not nourishing it.
Which way is the pendulum swinging right now? Is it still on the upswing or has it reached the peak and will soon be on the downswing? My guess is the NFL is still increasing the number of licensees, and that we might see as many as 200+ licensees in the next year or two.
And what impact would a larger pool of licensees have on things? If you are someone who is interested in acquiring an NFL license, my guts says now is a pretty good time to make your case and get in line.
Here are a couple fact-driven points that I would like to make.
I have said that things ebb and flow. I said that in 2000 there were 300+ NFL licensees, and by 2003 that number was barely 100 licensees. And I have said that now - in 2012 - there are roughly 175 licensees.
Of the 98 licensees from 2003 - not even 10 years ago – what percentage would you guess are still NFL licensees in 2012? 70%? 80% 85%? I would love to ask my friends at the NFL this question, because I’m guessing they have never been asked.
So please take a moment and guess, and think why you guessed the figure you did. What percentage of NFL licensees in 2003 are still NFL licensees in 2012?
The truth is, I think even the staff in the licensing department of the NFL would be surprised by the answer. I think if we were all honest with each other, we would think a fairly high percentage would still be licensees, largely because we all want to believe that having an NFL license is a bona fide ticket to prosperity – the pinnacle of the licensed sports business, the gold standard by which all leagues are judged.
So here are the facts as best I can determine:
Of the 98 NFL licensees in 2003, only 44% (43 companies) are still NFL licensees in 2012 – more than half the licensees have fallen by the wayside in less than 10 years. I realize that some companies were purchased and thus in a sense they are still licensees, but that’s gilding the lily. I also realize that I may have missed a handful of companies because the company name has changed slightly and I may have miscounted by a few companies, but the big picture point is that it appears that less than half the NFL licenses in 2003 remain licensed by the NFL less than 10 years later.
LIST OF THE 43 2003 NFL LICENSEES WHICH ARE STILL LICENSED IN 2012
1 Action Images, Inc.
2 BIC Corporation
3 Bradford Exchange, The
4 Brax, Ltd.
5 Highland Mint, The
6 Caseworks International
7 Classic Balloon Corporation
8 Decopac
9 Duck House, Inc.
10 Electronic Arts Inc.
11 Everlasting Images, Inc.
12 Fabric Traditions
13 Franklin Sports, Inc.
14 Fremont Die Consumer Products, Inc.
15 Great American Products, Inc.
16 Hallmark Licensing, Inc.
17 Hunter Manufacturing Group, Inc.
18 Imperial International
19 Kolder Inc.
20 Danbury Mint / MBI Inc.
21 McCarthur Towel and Sports, Inc.
22 McFarlane Toys
23 Memory Company, The
24 Mounted Memories, Inc.
25 MSA
26 National Emblem, Inc.
27 Northwest Company, The
28 Party Animal, The
29 Photo File, Inc.
30 Pro Specialties Group, Inc.
31 Reebok International, Ltd.
32 Rico Industries DBA Rico Industries/Tag Express
33 Riddell
34 Siskiyou Buckle Co., Inc.
35 Sports Coverage
36 Forever Collectibles / Team Beans, LLC
37 Topperscot, LLC
38 Topps Company, Inc., The
39 Twins Enterprise, Inc.
40 Wilson Sporting Goods Co.
41 Wincraft
42 Winning Streak Sports, Inc.
43 Zippo Manufacturing Company
Or phrased another way, of the 175 NFL licensees in 2012, only 25% (43 companies) were licensees in 2003 - less than 10 years ago! So over a period of less than 10 years, the NFL created well more than 100 new licensees. And that doesn’t take into account the companies who became licenses in 2004 –2010 and then fell by the wayside by 2012. So it’s possible that the NFL may have licensed 150 new companies, perhaps even 175 or more, over the last nine years – a significant number of companies!
No matter how you slice it, that’s a fair amount of turnover. In one sense that’s good news if you are currently seeking a license – this suggests that it’s not an impossible dream.
On the other hand, this is a bit scary in that it reveals, no matter how you slice it, that having an NFL license is not a ticket to the promised land. And having that perspective on things is an important lesson for anyone to learn, the NFL included.
Food for thought…
Many thanks for reading and as always, please contact me if you have any questions.
Scott Sillcox
Monday, March 19, 2012
How do I sell to the ecommerce / online stores of the major sports leagues? Can you say Kynetic?
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 many of your blog postings several years ago, is the info 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
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1. League ecommerce stores:
In most cases the leagues farm out the ecommerce / online store portion of their websites to a third party. To the consumer it appears to be the league running their own online store, but it is actually a third party. Here is who five of the biggest selling leagues work with:
A. The MLB e-comm site was run by GSI Commerce until late 2011 – now run by Kynetic LLC.
B. The NFL e-comm site was run by GSI Commerce until late 2011 – now run by Kynetic LLC.
C. The NBA e-comm site was run by GSI Commerce until late 2011 – now run by Kynetic LLC.
D. The NHL e-comm site was run by GSI Commerce until late 2011 – now run by Kynetic LLC.
E. The NASCAR e-comm site was run by GSI Commerce until late 2011 – now run by Kynetic LLC.
Notice anything?
Here’s the background…
2. The story of Kynetics
- In 1999, 25 year old and serial entrepreneur Michael Rubin started Global Sports Incorporated.
- GSI grows and grows, and by the beginning of 2011 GSI Commerce (as it is was then known) is running 200+ online e-commerce sores for all sorts of blue chip companies including the NFL, MLB, NBA, NHL, Nascar and ESPN. In a short 12 year span GSI had become the 800 pound gorilla in ecommerce world – in addition to the well-known, high profile sports sites, they also run e-comm sites for 175+ other well known companies including Ace Hardware, Calvin Klein, PBS, QVC, Restoration Hardware, Toys R US, Speedo and Ralph Lauren.
- In early 2011 GSI buys Fanatics, a leading provider of outsourced e-commerce solutions to colleges, conferences, professional sports teams and sports media properties. Included are the e-comm stores for more than 20 NCAA Division I programs including Ohio State, Florida and Oklahoma.
- In June 2011 GSI was purchased by eBay and becomes known as “GSI Commerce, an eBay Inc. Company”. But of interest to readers of this blog is the fact that at the same time and as part of the transaction Ebay sold 100% of GSI's licensed sports merchandise business to GSI Founder and CEO Michael Rubin. Talk about shrewd – the jewel of the crown was spun off to the original owner! GSI started in 1999 as a company selling sports products, and when it was sold to Ebay, Ebay divested itself of the sports component of GSI because Ebay believed “these businesses are not core to its long-term growth strategy”. Un huh…
- Thus it is that a company founded in the summer of 2011 – Kynetic - is now , as per their website, “The largest seller of licensed sports merchandise in the world. Fanatics operates the official stores of the biggest names in sports, including the NFL, NBA, NHL, MLB, NASCAR, ESPN and more than 60 Division I athletic programs and conferences, professional sports teams and top sports media properties. With more than 150,000 items, Fanatics offers the broadest product assortment—spanning professional and collegiate teams—through league partnerships and Fanatics’ own network of sites.”
This site lists most of Fanatics’ partners, but as of March 2012 still doesn’t list the NFL, MLB, NBA, NHL or Nascar, ie it doesn’t list the former blue chip GSI e-comm sports sites even though they are all now part of Kynetic. My guess is this is deliberate – please read on.
- GSI, and now to a certain extent Kynetic, seemed to make it their business to make it seem as though every one of their websites was run by the league/company/partner being represented, and as such you will almost never find any reference to GSI/Kynetic anywhere on the site. It's almost remarkable (to the point of being eerie) how good they are at “hiding” the fact that they have anything to do with the site. Greater minds than mine are at work here…
- That being said, Fanatics seem to have a different philosophy and most of their team and school sites link back to their corporate site – www.teamfanshop.com . But the NFL, MLB, NBA, NHL and Nascar sites remain shrouded in mystery, and thus the reason for this blog – to explain who is behind the majority of North American sports leagues e-comm websites. If you look at GSI's website right now (March 2012), it still shows the NFL, MLB, NBA, NHL and Nascar as their clients, but since September 2011 they have been part of Fanatics/Kynetics. I am not suggesting there is skullduggery going on, I am simply trying to answer the question posed in the title of this blog.
3. More on Kynetic
Kynetic consists of three consumer Internet businesses: Fanatics, the world’s leading online retailer of licensed sports merchandise; Rue La La, a leading online private sale destination in the U.S.; and ShopRunner, an innovative members-only service that aggregates shopping benefits from the top retailers and brands.
The Philadelphia Business Journal wrote a great article on Kynetic and Michael Rubin in September 2011 and I have copied some of the content below in italics. Many thanks to the PBJ.
“Rubin has been an entrepreneur since 1986, when he opened a ski sales and repair business in his parents’ house at the ripe old age of 12. I detailed the chain of events that led him from it to forming what would become GSI Commerce in this 1999 story.
GSI’s revenue was $1.36 billion last year (2010), and the company was on its way to some serious growth this year when eBay bought it, due in no small part to the March acquisition of Fanatics for $277 million. When GSI bought Fanatics, the Jacksonville, Fla., company operated more than 250 e-commerce websites, including www.footballfanatics.com, and an additional 60 e-commerce stores for collegiate and professional sports teams and media organizations. It employed 400 and had posted non-GAAP income from operations of $23.8 million on revenue of $186.3 million last year.
The Fanatics that is part of Kynetic also includes the licensed sports merchandise operations that GSI had before buying it. Those posted revenue of $300 million last year (2010) and included the e-commerce operations of the National Football League, Major League Baseball, the National Basketball Association, the National Hockey League, NASCAR and ESPN.
Rubin anticipates Fanatics will post revenue of $600 million to $700 million next year. He said the company employs 500 in Jacksonville and will have 100 employees in Kynetic’s Conshohocken PA office when that opens (Nov 2011). Fanatics is still run by Alan Trager, its CEO prior to its purchase by GSI. [The other two divisions of newly formed Kynetic are] Rue La La [which] employs 400 at its headquarters in Boston and its other offices in New York and Seattle., and ShopRunner [which] will employ a little less than 50 people at Kynetic’s Conshohocken headquarters.
Fanatic/Kynetic also has fulfillment operations in Kentucky that can employ as many as 300 people, depending on demand, which peaks during the holiday shopping season.”
4. Kynetic’s 411
Kynetic LLC’s head office of approximately 100 employees in Conshohocken PA is located close to GSI’s in King of Prussia PA:
Kynetic LLC
Millennium Corporate Center
225 Washington Street, 3rd Floor
Conshohocken, PA 19428
Ph: 484-534-8100
Ph #2 - Fanatic admin within Kynetic: 484-567-8383
www.kynetic.com
The bulk of the Fanatic employees (500+) work out of Fanatic’s office in Jacksonville, FL:
Fanatics, aka TeamFanShop
5245 Commonwealth Avenue
Jacksonville, FL 32254
Customer Service: 1-877-827-8965
Business Development: 904-421-1897
www.fanatics.com
www.teamfanshop.com
5. Selling to a “league” e-commerce website
Let’s continue to use the NFL as our example… If you would like to sell a licensed product to www.nflshop.com, the NFL ecommerce website run by Kynetic/Fanatics, the Kynetic/Fanatics buyer will be trained to make sure you are an NFL licensee in good standing before they can/will buy from you. If you are not a licensee, they can not and will not buy from you. The Kynetic/Fanatics buyers will work very closely with their NFL counterparts to make sure this principle is closely followed.
With respect to the NFL ecommerce site vs individual team ecommerce sites - Kynetic/Fanatics runs the NFL ecommerce site. But every team has their own ecommerce site and in most cases the team site is run by someone other than Kynetic/Fanatics (Kynetic runs a handful of team ecommerce sites including the Denver Broncos, NY Giants and San Francisco 49ers). The teams are free to either run their own sites or to farm them out to someone else. You need to contact each team to find out how each does it – even if I provided you with a list by league and team, it would be outdated the moment I published it. The e-commerce landscape vis a vis team e-comm sites changes too quickly for me to keep up, so I encourage you to go directly to the team and ask who runs their ecommerce store.
6. Advertising on a league website
A. If you are interested in advertising on the League's ecommerce site, then you would go through Kynetic/Fanatic. I don't know this for a fact, but I am fairly confidant in saying that Kynetic/Fanatics has all sorts of restrictions as to who can/can't advertise on each site, and ultimately someone at the league would have to approve each and every advertiser. What they would be checking is that the potential advertiser is either: a licensee of the league; a sponsor/marketing partner of the league (ie Coke); or if not a sponsor/marketing partner, then at least not in conflict/competition with someone who is (if Coke is a league sponsor, Pepsi wouldn't be allowed to buy ad space online).
B. If you are interested in advertising on the League's webite (but not the ecommerce site), you would start by contacting the league itself. In this case the same vetting process would happen - they would thoroughly check to see that the potential advertiser is either: a licensee of the league; a sponsor/marketing partner of the league (ie Coke); or if not a sponsor/marketing partner, then at least not in conflict/competition with someone who is (if Coke is a league sponsor, Pepsi wouldn't be allowed to buy ad space online).
I hope this helps and as always, please call or email if you have other questions or information to share with me!
Scott
PS In June 2012 Kynetics, through their Fanatics Division, bought a licensed sports product company Dreams Inc. (aka Dreamscorp). It is quite interesting to note that Dreams Inc. was both a retailer (Dreams Inc. owned a chain of stores known as Field of Dreams - once 30-ish bricks and mortar stores, now downsized to roughly 10 stores - plus an e-commerce operation) and a licensee (Dreams Inc. owned Mounted Memories, a licensee of most of the major sports leagues plus other licenses). Thus by purchasing Dreams Inc., Kynetics and Fanatics have clearly established themselves not only as America's leading licensed sports product e-commerce retailer, but also a leading sports memorabilia retailer AND a sports league licensee - a very unique combination.
- To read more about the acquisition, please see this Fanatics newsrelease. When the newsrelease mentions the figure of $150 million, don't be confused into thinking this is what they paid to acquire Dreams Inc. - I don't know what the figure was but I suspect a whole lot less than $150 million.
- To understand more about what business Fanatics (and therefore Kynetics), is now in by virtue of this acquisition, please see this section of Fanatics website. As their website clearly states, they are now in the business of "Licensing and Manufacturing - Fanatics holds licenses for over 600 colleges and universities, as well as professional leagues and organizations. This licensing strategy is supported with state-of-the-art manufacturing, sourcing, and customization capabilities."
- The impact of this development should not be ignored - Fanatics can now be a competitor to many of their suppliers - a somewhat frightening prospect to existing licensees, many of whom may be unaware of this situation. At the very least, this is something existing sports licensees, especially those who sell to Fanatics, should be keenly aware of.
Does a Retailer need an NFL (or MLB or NBA or NHL or NCAA) license to sell licensed sports products from my bricks and mortar store and/or over the internet?
I get asked this question more often than I ever would have guessed. To me the answer is so clear - “No you don’t need a license to be a retailer of licensed sports products” - that at first I thought people were asking me a different question and I was misunderstanding them. But the question kept being asked on a weekly basis, so it is clearly something people are unsure of, and it has prompted me to post my response here for others to find.
Note 1: I also find that I am getting asked this question by retailers outside of North America – ie a retailer in Spain wishing to sell NFL licensed merchandise. In this post I try to answer that question as well.
Note #2: Please note that in my answers below, for the sake of simplicity I have used the NFL as my example, but please understand that for the most part any time you see “NFL”, you could replace it with MLB or NBA or NHL or NCAA or MLS or Nascar, etc. The key is that the principle of the answer holds for the other leagues as well, not just the NFL.
So, I am a retailer – do I need an NFL (or MLB or NBA or NHL or NCAA) license to sell licensed sports products from my bricks and mortar store and/or over the internet?
1. You do not need a license of any kind from the NFL to sell NFL products at retail. This holds whether you are a bricks and mortar retailer, or an e-tailer, or both. All you need is to find NFL licensees (or distributors – see below) willing to sell their products to you. This answer may prompt two other questions:
A. You might well ask, why wouldn’t an NFL licensee sell to you? - If you are a small retailer and you are wanting to sell Nike licensed merchandise, Nike might not sell directly to you because you aren’t able to place a large enough order. Or Nike may have a carefully crafted list of established retail accounts with whom they work and they simply will not sell to you. But this unwillingness-to-sell is rare and only applies with the largest of licensees like Nike and does not apply to the vast majority of the other 174 NFL licensees.
B. You might ask – where can I find a list of “all the NFL licensees” that I can contact with respect to buying NFL licensed products from them?
- You might think that the leagues would be happy to provide you with such a list, and you might be right. You can always try contacting the various leagues and see if they will provide you with a list of their licensees. If they won’t, and I suspect they won’t for a variety of reasons, I offer two suggestions:
Allow me to try to clarify something that can be quite confusing. The NFL does have a "Retail License", and at first glance you might think this means that the NFL is granting certain companies the right to retail NFL licensed merchandise. This is NOT what the NFL menas by Retail License - what a Retail License is a license that allows a manufacturer (ie a licensee) to sell products to retailers. So if I am an NFL licensee with a Retail license, this simply means that I can sell my products to retailers. It does NOT mean that I am a retailer who has been given some special right by the NFL.
(i) Please visit LicensedSports.net a searchable Online Directory of North American Licensed Sports Products Companies that you can sign up to use for $59 for three months. This is a highly searchable directory of 2500+ licensed sports products companies in North America, companies which have been licensed by various sports leagues. Looking for companies which sell NFL housewares? You’ll find a list here including contact names, phone numbers, email addresses and dynamically-linked websites. Looking for a supplier who makes NFL and MLB and Nascar headwear? That list is here. Looking for a new supplier of MLB licensed posters? That info is here as well. (In the interest of full disclosure, please note that I, Scott Sillcox, created this online, searchable directory precisely because the information was not readily available anywhere else. It may seem a bit self serving for me to promote my own directory, but it’s easy to use and there’s nothing like it on the internet - fair value for $59.) 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.
(ii) Plan on attending the “Sports Licensing and Tailgate Show” held annually in January in Las Vegas. While not every licensed sports products company exhibits at this show - there are approximately 3500+ licensed sports product companies in North America (the vast majority of which as US college licensees), and you will find 300-ish of them represented at the show - there is a very good cross-section of licensed sports product companies including almost all of the biggest ones, and it would be well worth your while to attend the show if you are retailer looking for product.
2. Just to be crystal clear, while you don’t need a license to sell licensed sports products at retail, you DO need a license if you wish to manufacture and sell products with NFL league and team logos and trademarks to retailers, wholesalers, distributors, etc. Geographically, the NFL breaks this type of license into NFL USA licensees, NFL Canada licensees and NFL International licensees. (I'm not completely in-the-know with the NFL International license - perhaps they have broken this down into smaller areas or regions rather than simply "the rest of the world", ie an NFL Europe license and an NFL Asia license.)
- When someone is an "NFL USA" licensee, what this means is that they are contractually bound to only sell products to customers (retailers, distributors, "wholesalers") in the USA - they cannot sell to customers outside the USA. My company is located in Canada and yet I can be a NFL USA licensee - the license designation defines who you can sell to, not where you are located.
- It is these licensed sports products companies (licensees) which pay the NFL the licensing royalty, generally 15% of the wholesale price. For instance, if NFL licensee ABC CO sells $5,000,000 worth of NFL products to retailers (15% royalty) and distributors (18% royalty) and other various wholesalers (15-18%), they must remit to the NFL a royalty in the amount of 15% (or 18%) x $5,000,000 = $750,000. But the retailers and distributors and wholesalers do not submit any royalties whatsoever to the NFL - the royalty has already been paid at what is referred to as "The First Level of Distribution" – when the sale was made by the licensee to the retailer or distributor.
3. For retailers in Europe who wish to buy NFL licensed products, here are my thoughts/suggestions:
- If you are interested in being a retailer in Europe (let’s assume England for now), as explained above you do not need a license of any kind from the NFL. But you do need to understand that theoretically you can only buy from companies with an NFL International license (manufacturers) OR from "middleman" companies who have purchased from companies with an NFL license (these type of companies are generally called distributors or in some cases “wholesalers” but that is a confusing expression). The question then becomes, how do you find a list of companies (licensees) you can buy from?
- To get a list of companies with NFL International licenses, ie NFL International Licensees, I suggest that you contact either:
A. The NFL Head Office in New York (contact info below). You should explain that you are a retailer in Europe, and that you would like to receive a list of NFL International Licensees from which you are allowed to buy NFL products.
- But there is one other important source of NFL licensed products for you to buy from, and this is the group of "middleman" companies I referred to above which are known as "distributors". In this case these distributors have already purchased from NFL licensees, and these distributors can and should be able to sell to anyone they please, including someone in England even if they are based in the US. I do not know if there is such a distributor(s) in Europe, but I suspect there is - use the internet or ask the NFL UK office contact.
- But here's the key point and key takeaway in this entire blog posting and this is directed at North American and non-North American retailers: Don't be limited to European distributors - you can purchase from US-based distributors (some contact info can be found below). The key thing about distributors of NFL products, particularly those in North America, is that they make it their business to stock a wide variety of NFL products (almost all teams) AND they generally have very low minimum order levels, ie you can order 3 of this and 2 of that and 6 of another thing, and you simply order using a credit card. That is the business of distribution - they basically act as a warehouse of NFL products. Yes they charge a bit more than if you bought directly from the NFL licensee, but not outrageously so. Please also note that the distributors suggested below almost always sell more than just NFL products, they also sell MLB and NBA and NHL products that you might also be interested in. The distributors below are listed in no particular order.
NEW INFO: In addition to the great distributors listed below, please also check out my searchable Online Directory of North American Licensed Sports Products Companies which costs $59 to use for three months. In it you will find a large list of Distributors and their contact information - roughly 80-ish distributors in te USA. Simply use the "Advanced Search" option and search for category 4 = Licensed Sports Products Distributors.
Distributor #1: Casey's Distributing
8921 "J" Street, Suite 300
Omaha, NE 68127
USA
Ph: (402)334-3485
www.caseys-distributing.com
Check out their website and you can actually see products, pricing and quantities on hand.
Distributor #2: WCN Group
2401 Monarch Street
Alameda, CA 94501
USA
Ph: (510)748-4248
WCN Group website
Check out their website and you can see products but not pricing or quantities on hand.
Distributor #3: Big Apple Card Company
4800 Lyons Technology Parkway, Unit 2
Coconut Creek, FL 33073
USA
Ph: 800-883-8090
www.bigapplecard.com
Check out their huge selection of licensed of hardline and softgoods products from the major leagues as shown in their remarkable catalogue.
Distributor #4: Good Tymes Enterprises Inc.
P.O. Box 2073
228 Preston St SW
Abingdon, VA 24212
Ph: 866-628-5101
Fx: 276-628-4779
www.goodtymesent.com
A distributor of Nascar, collegiate, NFL, MLB, NBA and NHL products. They have a wide range of hardlines products - no softgoods. They have a 90 page 2013 catalogue.
Best of luck and I hope this has helped answer some of the questions listed below.
Thanks for reading, and as always, please let me know if you have any questions!
Scott Sillcox
PS from Feb 2013
I hear from a lot of retailers, both bricks and mortar and e-commerce retailers, who want to buy jerseys to sell from their store but seemingly can't buy jerseys. Here's the best way I can explain things:
There are actually two distinct issues:
1. Identifying which officially licensed companies make replica or authentic jerseys.
2. Figuring out if any of them will sell the jerseys directly to you.
To explain, let's use the NFL and their jerseys as the example:
A. Nike is the official on-field jersey licensee for the NFL (I am using layman's terms), but they may only sell to a certain, select type of bricks and mortar retailer and to a select type of e-commerce retailer. I am not privy to their criteria for who they will and will not sell to - you have to work the phone with Nike's sales team and find out if they will sell to you or not. If they will not sell to you directly, you need to ask them if one or more of the entities they sell to (I would refer to these entities as a distributor, but Nike might call them something quite different) would in turn be willing to sell to you. And that's the key for you - you need to figure out who you can buy from - I do not have this info but Nike does. If anyone can share with me the names of a "distributor" who will sell Nike jerseys to independent bricks and mortar retailers and independent e-comm retailers, please let me know - there is a flood of companies wanting to buy from you. Also, please keep in mind that Nike sells several different "grades" of jerseys: they sell a Game Jersey which looks more or less like the on-field jersey and retails for $100-ish; a Limited Jersey which is a funky jersey not worn onfield and retails for $135-ish; and an Elite Jersey which appears to be the actual onfield style jersey and which retails for $250-ish).
B. In addition to Nike, Mitchell & Ness (owned by adidas/Reebok), also has an NFL jersey license, albeit for Throwback Jerseys ($250-ish retail) and Replica Jerseys (these appear to be throwbacks but are a different quality than the Throwback jersey line - these Replica jerseys retail for $140-ish). So you might also want to speak to M&N and see if you can buy directly from them or if not direct, could you buy through a "distributor"?
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Do you need a license to sell NFL merchandise?
Do you need a license to be an NFL retailer?
How do you become a licensed NFL vendor?
How can you sell officially licensed NFL merchandise / products / goods / accessories / apparel?
How do you sell items with NFL team logos?
Do you need a license to sell MLB merchandise?
Do you need a license to be an MLB retailer?
How do you become a licensed MLB vendor?
How can you sell officially licensed MLB merchandise / products / goods / accessories / apparel?
How do you sell items with MLB team logos?
Do you need a license to sell NBA merchandise?
Do you need a license to be an NBA retailer?
How do you become a licensed NBA vendor?
How can you sell officially licensed NBA merchandise / products / goods / accessories / apparel?
How do you sell items with NBA team logos?
Do you need a license to sell NHL merchandise?
Do you need a license to be an NHL retailer?
How do you become a licensed NHL vendor?
How can you sell officially licensed NHL merchandise / products / goods / accessories / apparel?
How do you sell items with NHL team logos?
Do you need a license to sell NCAA / US College merchandise?
Do you need a license to be an NCAA / US College retailer?
How do you become a licensed NCAA / US College vendor?
How can you sell officially licensed NCAA / US College merchandise / products / goods / accessories / apparel?
How do you sell items with NCAA / US College team logos?
Got questions about Sports Licensing and Licensed Sports Products? Here are the answers.
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 many of your blog postings several years ago, is the info 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
================
If you have any of the questions listed below about Sports Licensing and Licensed Sports Products, allow me to suggest one of the following five sources of information and answers:
1. Watch this 11 minute video called “Licensed Sports Products”. This video is specifically intended for people interested in bringing a licensed sports product idea to market - NFL, MLB, NBA, NHL, NCAA, NASCAR, MLS, UFC, WWE, etc. This video introduces you to Scott Sillcox, whose company produced a variety of sports products and was a licensee of the NFL, MLB, NHL and others sports leagues for more than 10 years. The video is intended to accompany a 12 part, highly detailed blog called "An Insider's Guide to the World of Licensed Sports Products in 12 Parts: Practical Lessons from the Trenches" which can be found at the link shown in Item #2 below. The video touches on the pros and cons of acquiring your own license vs working with an existing licensee, and the blog expands on that subject.
2. Read my highly detailed 12 part blog which can be found here and begins with this introduction. This 12 part series contains an unprecedented amount of information about licensed sports products that cannot be found anywhere else on the internet. This series is written for people interested in getting their sports product idea licensed and discusses both acquiring your own license as well as working with an existing licensee. This series of blogs should answer almost any question you might have about obtaining a license to produce NFL, MLB, NBA, NHL etc. licensed sports products.
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
If you are interested in being a retailer of licensed products, you do not need to read the 12 part series – instead, please read this particular blog which is directed towards retailers and potential retailers.
3. Please read any of my other blog postings which can be found at the Licensed Sports blog. Here you will find lists of licenses by league (ie from a list of MLB licensees to a list of Nascar licensees to a list of NFLPA licensees), sources of licensing information, distributor information, and a host of other licensed sports product information.
4. If you are interested in finding out more about licensed sports companies in North America, please visit this searchable Online Directory of North American Licensed Sports Products Companies - it’s called LicensedSports.net and costs just $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. Looking for companies which are licensed by the NFL, MLS and Nascar who are located in Ohio – you’ll find the answer here. Looking for MLB licensees who make/sell licensed automotive products? It’s here. Looking for headwear licensees of the NFL, MLB, NHL or NBA? It’s here as well. 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.
5. Consider hiring me, Scott Sillcox, as a consultant. I have been working with entrepreneurs and senior management of established businesses who are interested in either obtaining their own license or working with an existing licensee. I am happy to chat with people once or twice and trade a few emails back and forth at no charge, but at some point it may be apparent that you would like/need more of my time, in which case I work two ways:
A. I do one day and two day licensing consulting sessions where I come to your office or local facility (ie a hotel or conference center meeting room). My fee is $1500/day plus hotel/airfare. You would approve the hotel and airfare expense ahead of time - I am very frugal and treat your money like mine (I’ve been an entrepreneur for a long time and know how hard someone has to work to make a dollar). I pick up all other travel costs such as meals, taxis, car rental, etc.
B. I do telephone consulting at a rate of $175/hour.
But don't let these paid options scare you, hiring me as a paid consultant only makes sense for 1 out of 5 people who contact me, and I am happy to spend some time with you at no charge.
You can reach me at: Scott Sillcox
Aurora, Ontario
Cell: (416) 315-4736
email: ssillcox@rogers.com
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Here then, are some of the questions you may be seeking answers to. I am confidant that almost all of the answers to these questions can be found from one or more of the five sources of information listed aove.
- How do I become an NFL licensee?
- How do I become an MLB licensee?
- How do I become an NBA licensee?
- How do I become an NHL licensee?
- How do I become an NCAA licensee?
- How do I become a US College licensee?
- How do I become a collegiate licensee?
- How do I become a NASCAR licensee?
- How do I become a UFC licensee?
- How do I become a PGA Tour licensee?
- How do I become an MLS licensee?
- How do I become a CFL licensee?
- How do I become a sports product licensee?
- How do I become a pro sports licensee?
- How do I get an NFL License?
- How do I get an MLB License?
- How do I get an NBA License?
- How do I get an NHL License?
- How do I get an NCAA License?
- How do I get a US College License?
- How do I get a collegiate License?
- How do I get a NASCAR License?
- How do I get a UFC License?
- How do I get a PGA Tour License?
- How do I get an MLS License?
- How do I get a CFL License?
- How do I get a sports product License?
- How do I get a sports merchandise License?
- How do I get a pro sports License?
- What does it cost to become an NFL licensee?
- What does it cost to become an MLB licensee?
- What does it cost to become an NBA licensee?
- What does it cost to become an NHL licensee?
- What does it cost to become an NCAA licensee?
- What does it cost to become a US College licensee?
- What does it cost to become a collegiate licensee?
- What does it cost to become a NASCAR licensee?
- What does it cost to become a UFC licensee?
- What does it cost to become a PGA Tour licensee?
- What does it cost to become an MLS licensee?
- What does it cost to become a CFL licensee?
- What does it cost to become a sports product licensee?
- What does it cost to become a pro sports licensee?
- Who can help me become a sports product licensee?
- Who can teach me what is involved in becoming a sports product licensee?
- Where can I find an expert to teach me about becoming a sports product licensee?
- Where can I find a consultant to teach me about becoming a sports product licensee?
- Need licensing help? Need sports licensing help?
- What does an NFL license cost? What is the cost of an NFL license? What is the cost of an NFL License Agreement?
And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
- How do I apply to become an NFL licensee? Where can I find NFL licensing information? Where can I find NFL license agreement information? Where can I find NFL license information? Where can I find information on obtaining an NFL license? How can I obtain an NFL licensing agreement? How can I get an NFL license? How can I become a manufacturer of NFL products? How can I use NFL team logos on a product?
And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
- What is involved in becoming an NFL licensee?
And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
- Where can I obtain a list of current NFL licensees? Where can I get a list of NFL licensees? How many NFL licensee are there? Does anyone have contacts for existing NFL licensees?
And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
- I have an idea for an NFL licensed product – what do I do next? I have a great idea for an NFL licensed product – where can I find out more about becoming an NFL licensee?
And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
- Where can I find an NFL license application? Where can I find an application to become an NFL licensee? And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
- What is the NFL license royalty rate? What is the royalty for an NFL license? What fee is paid to the NFL for licensed products? What percentage of wholesale does the NFL get paid?
And so on for each of the other leagues including MLB, NBA, NHL, NCAA, MLS, Nascar, UFC, WWE and players’ associations NFLPA, MLBPA, NBPA, NHLPA.
Saturday, March 10, 2012
Give me the NCAA scoop - what are the leading schools and who are the leading licensors and licensees?
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 many of your blog postings several years ago, is the info 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
================
Let's look at "NCAA" licensing a bit more.
This is March 2020 and I'm going to do something here that I have never done before - I initially wrote this blog posting in March of 2012, but enough has changed in NCAA licensing that I have re-written this entire blog posting but I have pasted the original blog below in case someone wanted to see what the scoop was in 2012. But it's now 2020 so let me explain how things stand currently.
There are about 2500 colleges and universities in the US. Some people are tempted to call this “NCAA Licensing”, but the NCAA has a very specific meaning and doesn’t represent anywhere close to all 2500 schools, so you are best to use the expression “US college licensing”, not “NCAA licensing”.
In the grand scheme of things, there are effectively:
A. Five licensing bodies for US colleges and universities
and
B. One licensing body for the actual NCAA
Let's not lose too much sleep over the companies that are licensed by the NCAA itself - I don't want to sound too controlling but those licensees aren't doing a large volume of NCAA-related sales, ie not many products are sold that feature the circular blue NCAA logo. So let me focus on the schools themselves.
There are 2500-ish colleges and universities in the US. And for those 2500+ schools, there are five licensing "bodies":
1. A company called CLC (which initially stood for Collegiate Licensing Company) which represents 700-ish US colleges and universities as well as numerous Bowl Games, Conferences and other misc entities in the college realm. As you can see in the logo below, CLC is the result of a merger that was finalized in very late 2018 between two companies - Learfield and IMG College - but we aren't going to focus on that. What is important to know is that most (but certainly not all) of the "Top 200" schools in the US are repped by CLC including 100+ of the 130-ish FBS schools.
2. A company called Fermata College which was founded in 2014 and represents a handful of major US colleges and universities. When I say a handful, I mean just that - they represent six schools (it used to be seven, but now six after Virginia left the fold). Their six schools are: The University of Georgia, the University of Kentucky, the University of Miami, the University of Notre Dame, the University of Oregon and the University of Wisconsin. Fermata's founders were former CLC employees.
3. A company called Exemplar Associates, LLC which was founded in 2016 and represents a handful of schools - 9 as of October 2023. Their schools include Boston College and three Ivy league schools (Columbia, Cornell, Penn). Exemplar's founder was a former Learfield employee.
CLC and their 700+ schools clearly represent the lion's share of the market in terms of the highest sales volume schools - I don't know this for a fact but I think it would be safe to say that CLC would have 175 of the Top 200 schools as measured by sales of licensed products and therefore royalties returned to the school (CLC does not represent independents Ohio State, USC or Indiana, but a high percentage of the other biggies).
Elsewhere in my blog (Part 1 of the 12 Part Series) I have talked a fair bit about keeping things in perspective, and I'm going to ask you to play along vis a vis some "NCAA" perspective.
First of all - what is the #1 University in terms of sales of licensed product / royalties generated for the school? Hint: They have been in the top 5 for the last decade or more.
And the answer is: The University of Texas at Austin, aka Texas. If you guessed Alabama, Ohio State, Michigan, Notre Dame or Georgia, those would have been great guesses as well.
Next question - what annual royalties did The University of Texas at Austin likely earn in 2019? Got a figure? Don't look below - just take a guess.
If you guessed $76.4 million, you are not correct. Nor are you right with a guess of $52.9 million. $34.3 million? Nope. How about a cool $22 million? Nope. The answer is Texas likely realized somewhere around $15 million in royalties from the sale of its merchandise over the Jan 1, 2019 to Dec 31, 2019 period (I hope you realize I put those other numbers there in case you wanted to guess but inadvertently glanced below for the answer).
My guess is that your guess was higher than $15 million - I'm thinking you might have guessed $30 or $40 or $50 million. But the truth of the matter is just that - the number one school in all of America generated approximately $15,000,000 in annual royalties in 2019. That's a lot money of course, but not an ungodly sum. And that's really my point - keep things in perspective if you can . The number one school in America didn't even generate enough money to cover the $20 million 2019 buyout of former head football coach Tom Herman. Or put another way, Texas' $15 million of royalties was able to nicely cover the nearly $8 million in salaries paid to the assistant football coaches with a bit left over for the new head football coach.
I also find it interesting that the $15 million figure is VERY close to what each NFL team receives as their equal share of the sale of NFL licensed merchandise - in the NFL's case each team likely received approximately $13,000,000 for the 2019 season.
If the Texas figure really surprises you by how low it is, you might want to read this blog where I try to describe in layperson's terms what's going on.
But the point of this blog isn't to put you through a quiz or embarrass you, what I wanted to do is explain the structure of collegiate licensing and prepare you in case you are interested in entering the world of collegiate licensing.
There are two things I'd like to make sure you understand.
1. What I mean when I say "CLC (or Fermata or Exemplar) represents a school"
2. CLC and school rankings
Here goes...
1. When I say "CLC represents a school", I mean that CLC and the school have signed a multi-year agreement that gives CLC permission to represent the school on the licensing front. Let's use LSU as an example (a blue chip example). Instead of LSU having to have an entire licensing staff of 10-15-20 people, CLC handles it on their behalf and LSU just needs a Licensing Director and perhaps an assistant or two. LSU has roughly 500 licensees, and CLC handles all the paperwork, all of the product quality control and the collection of royalties.
Let's assume those 500+ LSU licensees generated annual sales (mostly wholesale sales, but certainly some direct-to-consumer sales as well) of $90,000,000 worth of products. At an average royalty rate of 14%, that means those 500 licensees likely generated roughly $12,000,000 in royalties (vs Texas and their $15 million). CLC collects those royalties on behalf of LSU. CLC would then keep something like 10-15% of the royalties as payment for their services, and the university receives the 85%-90% balance. So LSU would receive a check for $10.5 million from CLC. Almost exactly enough to pay head football coach Ed Orgeron and his full staff of assistant coaches.
I'm here to help, so if you have any sports product licensing questions, please contact me. And please note that I am a consultant to existing licensees and entrepreneurs wishing to become licensees. I am a good listener and I'd love to help if I can.
Thanks!
Scott
================
As mentioned above, I initially wrote this blog posting in March 2012. A lot has changed in the US college licensing marketplace since that time. So above the dotted line, you will see my new posting that I wrote in March 2020. And below, please find the original blog posting from 2012 with a couple minor updates done in 2015 and 2017.
Here goes..
Remember, in the grand scheme of things, there are effectively:
A. Five licensing bodies for NCAA schools/products
and
B. One licensing body for the actual NCAA
Let's not lose too much sleep over the companies which are licensed by the NCAA itself - I don't want to sound heavy handed but those licensees aren't doing a large volume of NCAA-related sales. What I want to do is focus in on the schools themselves. For the schools, the four licensing "bodies" are:
1. A company called Collegiate Licensing Company (CLC) which represents 200-ish US colleges and universities.
2. A company called Licensing Resource Group (LRG) which represents another 200-ish other US colleges and universities.
3. A company called Strategic Marketing Affiliates (SMA) which represents another 200-ish US colleges and universities.
4. A new company called Fermata College which represents a handful of major US colleges and universities.
5. For the other 2000-ish US college and universities that have chosen not be part of CLC or LRG or SMA or Fermata, the licensing is done directly by the school.
Now out of CLC and LRG and SMA and Fermata, CLC clearly has the lion's share of the market in terms of the highest sales volume schools - I don't know this for a fact but I think it would be safe to say that CLC would have 25 of the the Top 30 schools as measured by sales of licensed products and therefore royalties returned to the school (CLC does not represent Ohio State or USC, but represents most of the other biggies).
Elsewhere in my blog (Part 1 of the 12 Part Series) I have talked a fair bit about keeping things in perspective, and I'm going to ask you to play along vis a vis some NCAA perspective.
First of all - which is the #1 University in terms of sales of licensed product / royalties generated for the school? Hint: They have been 1st for the last six years.
And the answer is: The University of Texas at Austin, aka Texas.
Next question - what annual royalties did The University of Texas at Austin earn in the year July 1, 2010 to June 30, 2011? Got a figure? Don't look below - just take a guess.
If you guessed $76.4 million, you are not correct. Nor are you right with a guess of $42.9 million. $24.3 million? Nope. How about a cool $16 million? Nope. The answer is Texas realized slightly more than $10.6 million in royalties from the sale of its merchandise over the July 1, 2010 to June 30, 2011 period (I hope you realize I ut those other numbers there in case you wanted to guess but inadvertantly glanced below for the answer).
My guess is that your guess was higher than $10.6 million - I'm thinking you might have guessed $20 or $30 or $40 million. But the truth of the matter is just that - the number one school in all of America generated a little more than $10,000,000 in annual royalties. That's a lot money of course, but not an ungodly sum. And that's really my point - keep things in perspective if you can . The number one school in America generates barely enough royalty revenue to pay a quality starting MLB pitcher's annual salary, or in NCAA terms, the half of all the licensing royalties earned by UT go to pay the salary of their head football coach. Yikes.
I also find it almost eery that the $10.6 million figure is VERY close to what each NFL team receives as their share of the sale of NFL licensed merchandise - in the NFL's case each team might be receiving approximately $9,000,000 each.
If the Texas figure really surprises you, you might want to read this blog where I try to describe in layperson's terms what's going on.
But the point of this blog isn't to put you through a quiz or embarrass you, what I wanted to do is share some of the CLC rankings in case it helps you make business decisions. Maybe you would like to become a collegiate licensee but it makes sense for you to partner up with an existing licensee - these lists can point out some potential partners. Or maybe you are trying to figure out what schools to pursue vis a vis licensing - in that case the school list might be a big help.
Thus please find three different rankings of CLC schools for the July 1, 2012 - June 30, 2013 period (I updated this in the fall of 2013):
1. A listing of the Top 75 Schools in terms of royalties earned for the school
2. A listing of the Top 25 "Non-apparel" licensees (I might call these Hardlines Licensees). Non-apparel sales account for 30-40% of the total sales.
3. A listing of the Top 25 "Apparel" licensees (I might call these Softgoods Licensees). Apparel sales account for 60-70% of the total sales.
1. A listing of the Top 75 Schools in terms of royalties earned for the school (CLC schools only, 2012-13 period)
1. The University of Texas at Austin
2. The University of Alabama
3. University of Notre Dame
4. The University of Michigan
5. University of Kentucky
6. Louisiana State University
7. University of Florida
8. University of Georgia
9. University of North Carolina
10. The University of Arkansas, Fayetteville
11. The University of Oklahoma
12. Texas A&M University
13. University of Wisconsin
14. University of Nebraska
15. University of Tennessee
16. University of South Carolina
17. West Virginia University
18. Auburn University
19. The Pennsylvania State University
20. University of Missouri
21. Florida State University
22. The University of Kansas
23. Oklahoma State University
24. Clemson University
25. University of Louisville
26. Texas Tech University
27. Virginia Tech
28. University of Illinois
29. The University of Arizona
30. Arizona State University
31. Syracuse University
32. UCLA
33. University of Washington
34. Duke University
35. Purdue University
36. University of Utah
37. University of Miami
38. Boise State University
39. Oregon State University
40. University of Minnesota
41. University of California, Berkeley
42. Stanford University
43. Washington State University
44. The University of Mississippi
45. University of Maryland
46. Texas Christian University
47. The University of Virginia
48. University of Cincinnati
49. Brigham Young University
50. University of Colorado
51. Georgia Institute of Technology
52. University of Pittsburgh
53. University of Connecticut
54. East Carolina University
55. University of Montana
56. Boston College
57. State University of New Jersey
58. Vanderbilt University
59. Georgetown University
60. U.S. Military Academy
61. University of Central Florida
62. University of Wyoming
63. University of South Florida
64. University of Nevada
65. University of New Mexico
66. The University of Memphis
67. Northwestern University
68. Texas State University- San Marcos
69. Fresno State
70. Louisiana at Lafayette
71. Colorado State University
72. Marshall University
73. Gonzaga University
74. James Madison University
75. Montana State University
A listing of the Top 25 "Non-apparel" licensees (CLC schools only, 2012-13 period)
1. EA Sports
2. Wilson Sporting Goods Co.
3. The Northwest Company LLC
4. Teams Beans
5. Commemorative Brands Inc. dba Balfour
6. Tervis Tumbler Company
7. Logo Chiar Inc.
8. Fabrique Innovations Inc.dba Sykel
9. Wincraft Inc.
10. Herff Jones Inc.
11. Jenkins Enterprises
12. Rico Industries/ Tag Express
13. Evergreen Enterprises of Virginia LLC
14. Upper Deck Company Inc.
15. Rawling Sporting Goods
16. Renaissance Imports
17. Jostens Inc.
18. Spirit Products Ltd./MA
19. Concept One Accessories
20. Thirty-One Gifts LLC
21. Russell Stover Candies
22. Scentsy Inc.
23. Boelter Brands LLC
24. The Memory Company
25. Stockdale
A listing of the Top 25 "Apparel" licensees (CLC schools only, 2012-13 period)
1. NIKE USA Inc.
2. Knights Apparel Inc.
3. Gear for Sports
4. Sports Licensed Division of the adidas Group
5. Top of the World
6. Colosseum Athletics Corporation
7. Outerstuff Ltd.
8. Twins Enterprise Inc.
9. College Concepts LLC
10. VF Imagewear Inc. (Section by Majestic)
11. Haddad Brands
12. Russell Brands LLC
13. J. America
14. 5th & Ocean Clothing LLC
15. MJ Soffe LLC
16. JanSport division of VF Outdoor Inc.
17. Lakeshirts Inc. dba Blue 84
18. T-Shirt International Inc.
19. New Era Cap Co. Inc.
20. Columbia Sportswear
21. New Agenda
22. Tailgate Clothing Co. dba T-University
23. New World Graphics
24. Cutter & Buck
25. Zephyr Graf-X
Here also is six years of the same data - not too much changes from one year to the next, but there are larger numbers of changes over a six year period.
Please note: I update this information every year, so if you'd like a spreadsheet showing the latest CLC info compared to previous years, send me a quick email - ssillcox@rogers.com with the header "I'd like the latest CLC sales info spreadsheet".
If you want to look up some information on some or all of the licensees listed above, please note that we have launched a terrific, searchable Online Directory of 1500+ North American Licensed Sports Products Companies - it’s called LicensedSports.net and it can be found at that same address and costs just $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, MLS, Nascar, NFLPA, MLBPA, NHLPA and others). There is nothing on the internet that comes close to this resource, and I update the database weekly, sometimes daily. 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.
I'm here to help, so if you have any sports product licensing questions, please contact me. And please note that I am a consultant to existing licensees and entrepreneurs wishing to become licensees. I am a good listener and I'd love to help if I can.
Thanks!
Scott