SBJ/August 1 - 7, 2005/Marketingsponsorship

With contract in hand, NHL warms up its licensing machine

A surging licensed-merchandise market for MLB, which was fueled by the Boston Red Sox’s first World Series championship since 1918, has much of the industry close to historic highs.

Now the NHL wants to join the party. With a collective-bargaining agreement finally in place, new rules designed to create a more entertaining product and the expectation of many marquee players shifting to new teams, the only league to miss an entire season due to labor strife is hopeful to rebuild its licensing business to pre-lockout levels in two to 2½ years.

“The American fan is forgiving; we’ve seen that after every labor stoppage,” said Ed Doran, who heads the licensing business for VF Corp., the longtime rights holder for the NHL’s official championship locker-room T-shirt. “The good news was no licensee was hurt badly because we all knew this was coming. So we think we’ll be back up to 75 percent [of pre-lockout levels] sometime next year.”

The league and licensees hope fans will quickly return to merchandise racks.
Even during a year without hockey, there were some encouraging signs.

A pricing war in the video game category certainly helped, but nonetheless it is intriguing to note that during a season where it did not play a single game, NHL licensees sold more video games than ever. The NHL already has reached agreements in principle with all of its video game licensees — EA Sports, Take 2, Sony and Atari — to return.

After EA Sports’ massive exclusive deal with the NFL, there had been some thought that more exclusive deals were inevitable. However, MLB, the NBA and now the NHL all decided multiple licensees inevitably produce better games.

“Every manufacturer talked about wanting an exclusive, but we [all the leagues] decided healthy competition means better games for our fans and more exposure for our game and players‚” said NHL licensing czar Brian Jennings.

Hockey equipment sales also stayed strong until recently. Reebok successfully introduced its RBK and Vector hockey lines, following its acquisition of The Hockey Co. As for Nike, “we’re feeling pretty good, because we actually gained share [during the lockout],” said Nike Bauer Hockey President and CEO Chris Zimmerman.

WinCraft President John Killen said that even though his NHL business dropped by more than half during the lockout, he sees it coming back strong — and soon. “We think it will come back quicker than any sport did after a labor stoppage,” said Killen, whose company is renowned for its sports souvenirs. “We actually feel this might be the largest NHL fall season we’ve ever had. … There’s an excitement to see what the new game will look like.”

Killen, Doran and other licensees all have given the NHL high marks for support during the lockout.

Charting the retail recovery, Jennings sees retailers like nhl.com and team shops coming back first, followed by specialty stores, chains such as The Sports Authority, Modell’s and Dick’s Sporting Goods, mall specialty shops like Finish Line and Champs, and finally mass merchants.

With the lockout just settled, the league licensees have missed the fall buying season but may be able to chase some business for the holiday season. The first big sales push will come for the fall 2006 season.

“We’ve got intensely avid fans and a new game on the ice for them to get excited about,” Jennings said. “Hopefully that means our business comes back quickly.”

During the lockout, the NHL took the opportunity to prune its licensee base by around 10 percent, update many licensing contracts and move its quality-control process entirely online.

SERIOUS PRIZE: Sirius Satellite Radio is leveraging its NFL rights with an “Any NFL Game, Anywhere” sweepstakes from now through September. In a joint effort with NFL sponsor Southwest Airlines, consumers can enter at retail or online for a chance to win trips, tickets and accommodations to NFL games of their choice every week of the 2006 NFL season. John Madden is the face of the promo and will appear in point-of-sale and radio ads.

WOMEN AND CHILDREN FIRST: The first 1.8 million of an anticipated 13.1 million NFL team and league NFL Shop catalogs that will be mailed this season arrive at households across the country this week. Bob O’Keefe, the NFL’s senior director of fan relationship marketing, is projecting 15 percent growth off the $60 million in sales from league catalog and online sales last year.

A change in strategy sees the league targeting “football families” instead of just avid NFL fans. “More than half of our biggest fans are married with two children and plan their Sundays around NFL viewing,” O’Keefe said. “So there’s a huge opportunity.”

Accordingly, the selection of women’s and kids’ products in this year’s catalog has doubled. The holiday catalog mailing in mid-November will increase in circulation from 5.1 million to 6.7 million. NFL Shop also is benefiting from MBNA’s NFL Extra Points card, O’Keefe said, as merchandise and NFL Shop cards are the most redeemed reward feature for the cards.

BLEEDING PHILLIES RED: With but a lone world championship in more than 120 years, Philadelphia Phillies fans have done more than their fair share of bleeding. Through a deal with the American Red Cross, the team is hoping fans will actually give blood for the team.

With the low-six-figure deal, the Red Cross gains marketing rights that include sponsorship of a Bobby Abreu figurine giveaway that also will be used as an incentive for a blood drive at Citizens Bank Park on Aug. 13. Fans giving blood that day preregister at pleasegiveblood.org and will receive Abreu figurines that won’t be distributed at the park until Sept. 5. The deal also includes Phillies radio inventory; shortstop Jimmy Rollins has cut ads supporting the program. The Phillies are hoping to attract 1,000 donors for the Red Cross.

HERE & THERE: Gary Stevenson’s OnSport consultancy in Raleigh has won an interminably long review process in gaining the sports marketing consulting assignment for Nokia. Among the cellular handset brand sports properties are the NBA, MLBAM and a longtime Sugar Bowl/BCS affiliation. Millsport/The Marketing Arm was Nokia’s last sports agency. … Los Angeles Dodgers manager of advertising and special events Dan Brewster goes to the Phoenix Coyotes in a similar role. … Jeannie Goldstein becomes executive vice president and managing director of WPP Group’s 141 Premiere Sports and Entertainment Group. She had been at the Publicis-owned Frankel as vice president of sports and more recently had a brief stopover at Publicis’ Relay Sports & Event Marketing as vice president of sponsorship consulting.

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

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