SBJ/20100329/This Week's News

Disney steps to the plate with MLB

Disney and Major League Baseball are combining for a cross-licensing deal that will mix the marks of two of the biggest names in sports and entertainment merchandising.

The retail licensing program is one MLB has pursued for a decade and expands the business relationship between the two companies, giving MLB ties to Disney’s youth marketing empire, while global merchandise king Disney gets distribution within MLB’s established channels for licensed sports products.

The licensing program will include caps, apparel, novelties and possibly children’s footwear. While some limited product combining Mickey Mouse and other classic Disney cartoon characters with MLB logos could be at retail as soon as next month, the program will officially launch at retail in and around the July 13 All-Star Game being held in Disney’s hometown of Anaheim.

Another part of the agreement will see Mickey Mouse/MLB statues placed throughout Anaheim during All-Star Week, similar to the Gateway Arch models scattered around St. Louis last July and the Statue of Liberty/MLB-logoed replicas around New York City during the 2008 All-Star Game. About 67,000 10-inch-tall replicas of those MLB Statues of Liberty were sold. Given the power of Mickey Mouse and other venerable Disney cartoon characters at retail, MLB hopes that 100,000 of those replica statues will be purchased this year.

Because of Disney’s enormous power at retail globally, MLB has been seeking an alliance for about a decade. “Kids are always a major focus as baseball, or any sports property, looks to bring more fans under its umbrella and into its park,“ said one senior licensing executive with knowledge of the deal. “That’s why this works so well for them.”

Sources pointed to Stephen Teglas, vice president and general manager of Fashion & Home for Disney Consumer Products, and Howard Smith, MLB senior vice president of licensing, as the principal architects of the deal.

Disney’s $30 billion in annual global consumer products sales is nine to 10 times that of MLB’s. Baseball and its licensees should get a huge boost from sales generated by All-Star Game-related merchandise, but the program is designed to last longer than that. For example, there has already been talk of spring training-themed products for next year’s Grapefruit League season.

Mickey Mouse/MLB statues
will be placed throughout
Anaheim during All-Star
Week, similar to the replicas
of the Statue of Liberty used
in New York City for the
2008 event.

Some of MLB’s largest licensees have signed on, including on-field cap rights holder New Era, as well as VF, whose Majestic Athletic brand holds exclusive MLB uniform rights. Also in the mix is New Era’s 5th & Ocean apparel brand, along with novelty/accessory licensee Team Beans/Forever Collectibles, which will make the Mickey Mouse/MLB statues. There will also be cross-licensed pins and plush.

Aside from sales gained by combining some of the most powerful logos in licensed products, the deal should increase distribution for each licensor. It will push sales of Disney product into the sporting goods specialty channel, where MLB has a strong presence. The Disney-MLB merchandise will also be sold in MLB parks and team stores. Conversely, the cross-licensed merchandise will also be sold in Disney parks, through the hundreds of Disney-branded mall-based stores and possibly in Disney’s department store distribution channels, an area where MLB licenses are weak.

“The game being in Anaheim means there will be a good market for event-based merchandise, and beyond that, nothing’s more apple pie and America than baseball and Disney,” said Gene Goldberg, former NFL consumer products vice president and now an independent consultant. Goldberg recalled the NFL doing some limited-event merchandise with Disney, but never a full-blown program. “One of the problems [Disney] had with the NFL was that we were doing cross-licenses with quite a few characters, so as long as they keep it special, it should work.”

Cross-licensing is not new, but Disney is as protective of its marks as any big merchandiser, so any deal is significant. Cross-licensing for large sports properties was a byproduct of the 1990s licensing boom. MLB cross-licensed with Snoopy and Peanuts, Looney Tunes and Betty Boop. The NHL had a kids line with the Muppets, while the NFL combined its intellectual property with classic cartoons such as The Flintstones, Looney Tunes, Garfield and The Pink Panther.

“Both companies have to back down a little on their normal percentages to make these deals work, but it’s also important for them to use what is essentially a new brand [combined] on new products to further extend the cachet,” said independent licensing consultant David Schreff, who marshaled similar deals while serving as president of the NBA’s media and marketing group and president and COO of Marvel Entertainment, now owned by Disney. “If the license extends that far, there should also be a real opportunity in baseball-Disney premiums.”

The licensing relationship with Disney is the latest evolution of what appears to be swelling business ties with MLB. Disney’s ESPN unit is a longtime MLB rights holder, and last year, the two parties staged an All-Star Game promotion around Disney’s “G-Force” movie.

The MLB-Disney licensing alliance follows a small run of cross-licensed NBA-Disney licensed T-shirts sold during last year’s Orlando Magic-Los Angeles Lakers Finals.

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