FREAKY FRIDAY – Sports Licensing 101: Understanding legalities, scopes and more!
India has always been a fan market for sports and sportsmen, which often drives media attention. However, India’s penchant towards sports, can be witnessed in terms of sales of sports licensed merchandise.
To most of us, sports licensing is a difficult jargon, which is used often. Let’s break it down for you……
What is Sports Licensing:
Sports licensing is a contractual contract by which a sports team or organization gives a company a license to use its name, logo or trademark on the company’s products. The company leasing the rights is known as the licensee and the sports body is the licensor.
Licensing a sports product gives your business an opportunity to reach a market of sports fans that could be local, national or global, depending on the sports body.
Sports licensing covers licensing of logos, symbols, names of varied sports organizations and team players. These items are owned by sports institutions and can lease the rights to use their property to licensees in return of royalty.
A licensing agreement is an official legal document which directs the licensing and merchandising process. Here’s what you will find in a sports licensing contract —
Quality check: Maintenance and checking of quality standard is the utmost important thing. There are typically provisions made to ensure that the final product meets the team’s or athlete’s quality standards.
Deadlines: Strict time frames are often included, especially if the merchandise will correspond to sports seasons or a major event. As rightly said, “Deadlines are deadlines, even if you are dead.”
Profits: The agreement includes details about the expected profits to be made, including whether or not a contract will be renewed based on sales figures.
Royalties: Percentages are determined for how much of the profits will be paid out as royalties to the league, the team, or the athlete.
Legal action can be taken against the company if the terms laid out in the contract are not met properly.
Sports licensing could give a major boost to your small business.
Sales and Revenues:
Licensing provides an important source of revenue for both sports bodies and licensees. An organization can use its licensing program to generate revenue to support and enhance its programs.
Licensors select licensees that enhance the brand image of the organization. Licensors aim to select reputable and reliable licensees that will use their brand in ways that are appropriate to the sport.
Organizations use sports licensing to build relationships with supporters. Thanks to sports licensing and merchandising, it’s easy to stop by a store or go online to get a shirt for just about any sports team. It enhances and strengthens customer-company relationship.
Protecting the quality and consistency of the brand is an important objective for both parties. The poor quality of counterfeit merchandise can have a damaging effect on the reputation of the sports team.
Advent of sports leagues such as IPL and Pro-kabaddi League has restructured the industry scenario in the country.
WWE has launched its online shop with the Souled Store. The National Basketball Association (NBA) announcing the launch of NBA Basketball School in Mumbai, and its apparel are available at 600 plus retail points across the country.
Shoppers Stop has inked exclusive retail merchandise deal with Chennai Super Kings (CSK). 34 Shoppers Stop stores across Mumbai, Pune, Delhi, Kolkata, Hyderabad, Chennai, Jaipur and Bangalore will be selling the official merchandise.
Not only the global licensed sports merchandise market is obsessed with innovation, the Indian market is gradually moving and expanding its territories in various categories such as apparel, home decor, etc.
However, for sports licensing, it is mandatory to select the right partner to maintain the brand image of the company.