SBJ/January 24 - 30, 2005/This Weeks Issue
NFL deal has other leagues looking for a video-game score
Published January 24, 2005
The ripple effect of the gargantuan exclusive rights deal — a reported $300 million — that Electronic Arts signed with the NFL in December was very much on the minds of senior licensing executives gathered at Super Show in Orlando last week.
The NBA, MLB and the Collegiate Licensing Co. are looking for their own video bonanza, with their licenses expiring after the current season.
Word around Super Show was that the MLB and its Players Association were close to a video game deal that would approach the NFL’s in size and scope — no small accomplishment considering the NFL’s market dominance. Howard Smith, MLB senior vice president of licensing, was mum on specifics but indicated that MLB is not going the single-licensee route.
“We knew whatever the NFL did would change the model, and it did,” said Smith. “But we’ll never do a single license because it is crazy to lock out the guys who make the hardware. They are the foundation, so we’ll always have at least one of both.”
The NBA’s exclusives with Reebok for on-court apparel and with Spalding/Huffy for basketballs and backboards netted big dollars, but in the video game realm there are some product concerns.
The lead times for video games — about a year — are the longest among the NBA’s licenses, said Sal LaRocca, the league’s licensing chief, “so we’re trying to determine if having one licensee would stifle creativity. We want to maximize revenues, but we also want better games every time around, and competition is one way to help ensure that.”
The league hopes to have some direction on that category, if not specific licenses completed, by the time of its All-Star Game next month, he said.
Within the next few weeks, Collegiate Licensing Co. President Pat Battle expects to pare down to a single licensee with one video game around a specific sport and a co-exclusive with another around a different sport.
“For us, it’s not about maximizing revenue as much as it is maximizing the brand,” Battle said. “Video games have become a real crucial revenue producer, but the fact they reach so many young consumers makes them just as important to any property in terms of a brand touchpoint.”
PENNSYLVANIA PASSION: By the time you read this, you’ll know who the Super Bowl contestants are. Last week in Orlando, NFL licensees were rooting for the Keystone State Bowl — a battle between the Pittsburgh Steelers and the Philadelphia Eagles.
There’s no real rivalry between the teams at opposite ends of the state, but each has the kind of pent-up demand that drove championship merchandise from the Boston Red Sox to record levels following their World Series win last year.
Mark Holtzman, NFL senior vice president of consumer products, said “if-win” orders for a possible Pittsburgh Super Bowl appearance rival or exceed Green Bay’s Super Bowl championship run in 1997, the league’s all-time hot market.
RETRO PASSE? As the most fashion-driven sports property, the NBA’s apparel business has taken a hit with the decline of retro as a style trend.
As for the NFL?
“We had a record year in 2004 [in apparel], and we’re on track for the same in 2005,” Holtzman said. “So the predictions on the decline of licensed [products] haven’t been true for us.”
Ideally, the league would like to lessen its dependency on jersey and headwear sales. The NFL also hopes to challenge Under Armour performance wear more directly with Reebok’s NFL Equipment line, possibly by rebranding to a name that’s less institutional and thus more appealing to younger consumers.
LANCE PART DEUX: The success of Nike’s “Livestrong” wristbands (sales in excess of 31 million units) has led to the distribution of the product as purely a piece of licensed merchandise. We’ll soon see if they will be as popular without the cause-related tie that helped make them a fashion staple.
Forever Collectibles will sell MLB wristbands for $2 or three for $5.
Also new from the Lewis idea machine are hot-market licensed car magnets. He plans to manufacture an equal six-figure quantity of Super Bowl XXXIX Champion car magnets for each of the Super Bowl contestants overseas and says he’ll be able to deliver most of them to the winning market the day after the game for $7.95 each, with more to follow. Half of the inventory (the losing team’s) then gets destroyed.
“I’m used to chasing hot markets from China,” said Lewis. “It doesn’t really matter to me what the product is.”
IN THE CARDS: While we might argue about whether card-playing and associated equipment should be counted as “sporting goods,” the increasing popularity of poker among sports’ core male audience was very much in evidence, with boatloads of licensed cards and chips.
New from NBA licensee All Pro Deal are playing cards with player caricatures that carry a hefty retail price of $10 and a poker chip set with the league’s venerable Jerry West-inspired “logo man” that will retail for $129.
NBA licensee All Pro Deal wants a hand in the poker craze with player playing cards.
The World Poker Tour had a booth showcasing products from its licensees, which included former New York Giants Carl Banks’ G III Apparel’s jackets, jerseys and T-shirts.
Whether or not card-playing is a sport, show officials were impressed enough that they are planning a dedicated poker section for the 2006 Super Show. Can video games as a show staple be far behind?
NEW TRICKS FOR AN OLD DOG: Spalding, one of the oldest brands in sporting goods, continues to chart new directions. The Russell Athletic unit plans to cut its roster of 80 licensees by almost a third over the next year as part of a general brand refocus. Also on tap is a brand repositioning, a new secondary trademark, tag line and brand campaign.
On the product side, we’ve noticed fellow NBA licensee Reebok eyeing Spalding’s markets with a new effort at basketballs and other inflatables, and with a recent license with Lifetime Products to market RBK-branded backboards.
However, we’re wondering if the shoe could end up on the other foot, with Spalding using its recent purchase of running shoe brand Brooks to help bring a Spalding-branded performance basketball shoe to market. Currently that’s one of the product categories Spalding licenses out.
LICENSING LINES: After many years of paying lip service, servicing the women’s licensed sports apparel market has now become a staple. Accordingly, it was tough to find an apparel booth without splashes of pink.
Every Wisconsin kitchen needs a Green Bay Packers scoreboard clock, right?
“Home furnishing used to mean stuff for the bedroom, like sheets and towels,” said the NBA’s LaRocca, “but now it’s evolved to where it included items in the den and living room, where a lot of sports fans spent their time — near the TV.”
Other than the scoreboard clock, new products at the show supporting his contention
Lee Seed Co. has switched its focus from popcorn to the containers that hold it.