SBD/November 16, 2012/Marketing and Sponsorship

Ohio State Getting Nearly $100M In 10-Year Apparel Deal With J. America, Fanatics

Ohio State's new deal will net $5.5M more annually than the school got from previous deal
Ohio State Univ. officials on Thursday said that the team of J. America Sportswear and Fanatics Inc. "won the bidding to produce OSU-licensed apparel and to sell it online and in campus retail outlets," according to Steve Wartenberg of the COLUMBUS DISPATCH. The new 10-year deal is "expected to give" the school $9.7M annually, up from the current $4.2M. University officials said that the arrangement "will provide higher-quality merchandise and streamline production of OSU goods." Revenue from apparel sales "will be used to fund scholarships and improve student and alumni services." OSU Senior VP & Special Assistant to the President Jeff Kaplan said that J. America and Fanatics were selected "because their combined bid provided the best revenue stream." Wartenberg notes about 100 licensees "now produce Buckeyes apparel, including headwear, while Nike makes OSU jerseys and varsity athletic apparel under license." Nike will "continue to produce these items and pay" OSU $1M a year. J. America, a current OSU apparel licensee, will "become the sole-source provider for all other apparel under the new contract." The company will "guarantee" OSU a minimum of $8.5M a year in royalties from the sale of school apparel. This will be "a big increase from the current annual royalty income from apparel sales of about" $4M. J. America Exec VP Jeff Radway said that the company also will "establish a design center and showroom on campus that will create 14 jobs with an estimated payroll" of $1.3M annually.  Fanatics will continue to "run the university’s official online store and also will operate the Official Team Shop in the Schottenstein Center as well as handle sales of OSU merchandise at concession stands at university athletic facilities, such as Ohio Stadium." There were "more than 40 bids, but Ohio State whittled them down to three." One other confirmed bidder was Silver Star Merchandising, the licensing arm of the Dallas Cowboys (COLUMBUS DISPATCH, 11/16).
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