SBD/June 6, 2013/Marketing and Sponsorship

Univ. Of Oregon Sets $500,000 Annual Minimum For Future Licensees

Oregon's licensing revenue has grown more than 155% in the past five years
New Univ. of Oregon licensees starting next summer "must guarantee the university at least $500,000 a year in royalties, which would mean a minimum" of $5M in wholesale sales to retailers, according to Allan Brettman of the Portland OREGONIAN. That is an "unattainable target for all except the largest national apparel players." But a school official said that the new policy will be "better for the taxpayers and students the public university represents, even if it's painful for small apparel providers and perhaps even retailers." UO's action "follows similar changes at a growing number of universities around the country, especially those with high-profile sports programs." Schools including Oklahoma, Texas, USC and Ohio State "have found it is easier and more profitable -- especially in times of declining funding for public universities -- to deal with fewer, bigger licensees." UO "issued its request for proposal last week with a June 21 application deadline." It is not known "when the winning bidder or bidders will be chosen," or how the "process will play out" if no companies guarantee the new revenue floor. UO Marketing & Brand Management Dir Matt Dyste said that the school "began examining its licensee program two years ago, hiring a consultant along the way." Brettman notes UO licensing revenue is "booming," having increased more than 155% in the past five years. Licensee royalties paid to the school are "expected to exceed" $3.5M this year. Of UO's nearly 400 product licensees, "more than 100 sell apparel and headwear," accounting for about 65% of royalties. Nike accounts for "almost two-thirds of the apparel royalties," which translates into about $24M in wholesale sales. Royalty revenue after expenses is "split evenly between the university and athletic department." The new licensee process is "not expected to affect Nike" (Portland OREGONIAN, 6/6).
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