SBD/Issue 179/Sponsorships, Advertising & Marketing

NASCAR Sticks To Licensing Plans Despite Supreme Court NFL Ruling

NASCAR Does Not Believe American Needle
Ruling Will Impact Merchandising Business

The "beleaguered NASCAR merchandising business is nearly set for a transformation," and NASCAR does not believe that the Supreme Court decision in American Needle v. the NFL "will hold it back," according to Bob Pockrass of SCENEDAILY.com. NASCAR and its teams "will keep an eye on the courts as it continues the formation of the NASCAR Licensing Trust, a new organization that will handle the licensing agreements for any team that wants to join," though NASCAR Dir of Corporate Communications Ramsey Poston Wednesday indicated that the "plan is to move forward with the NASCAR Licensing Trust." Currently, every team, track and NASCAR "has done its own licensing, often selling its licenses to Motorsports Authentics," but NASCAR is "working on a new model with the NASCAR Licensing Trust handling the licensing agreements and likely selling them to an exclusive manufacturer for diecasts and for apparel." That means a diecast or apparel manufacturer "can work through one company (instead of having to go through each team) to produce products," and the teams "would then get the revenue that they generate." The system is "loosely patterned after how the NFL handles its licensing." Roush Fenway Racing President Geoff Smith said that NASCAR has had its attorneys looking into whether the ruling in the American Needle case "will impact the formation of the NASCAR Licensing Trust." Smith: "There are significant and material differences between the NFL licensing model, where teams are mandated to yield their intellectual property to the NFL trust, and the proposed NASCAR model, which allows a team to opt in or opt out of a particular transaction. I suspect that these differences, among others, will separate our contemplated path from the NFL." Fordham Univ. School of Business sports law professor Mark Conrad said that NASCAR "should move forward with its licensing trust." Conrad said of the impact of the ruling on NASCAR's plans, "It could be impacted, but it doesn't mean they should stop doing it" (SCENEDAILY.com, 5/27).

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