SBJ/20100823/This Week's News

NHL reaches retail, licensing deal with Canadian Tire

The NHL last week announced its first hybrid retail and licensing partnership with one of Canada’s largest retailers.

The deal makes Canadian Tire the official home improvement retailer of the NHL in Canada and gives the NHL a presence at a ubiquitous retailer that contends that 85 percent of all Canadians live within 15 minutes of its locations and 40 percent of the country shops there weekly. It also says it is the No. 1 hockey retailer in the world.

Sources valued the five-year agreement at more than $20 million overall, which includes media but not activation. The NHL previously had a partnership in Canada with The Home Depot. That deal ended after the 2008-09 season.

The agreement makes Canadian Tire the first company to become an official partner of the NHL’s outdoor game in Canada next year, the Heritage Classic, and it gives the retailer the right to develop a store-within-a-store concept featuring NHL-licensed league merchandise at some of the retailer’s 480 outlets across Canada. It also includes vendor-pass-through rights to work with some of Canadian Tire’s vendors who don’t conflict with NHL partners.

“It’s quite a creative piece that the league put into the deal that allows Canadian Tire to really ramp up the marketing opportunities and value of the deal,” said Mark Harrison, president of the Canadian marketing agency TrojanOne, which consulted Canadian Tire on the deal.

The deal comes at a time when big-box retailers such as Wal-Mart, Target and Sears remain reluctant to cut leaguewide agreements. NHL executives described it as a traditional sponsorship deal that includes limited licensing exclusivity, namely that Canadian Tire will be known as the official retailer of the Heritage Classic in Calgary on Feb. 20.

The Canadian Tire deal was put together over nine months by the NHL integrated sales and licensing divisions in collaboration with Canadian Tire and TrojanOne.

In negotiating the agreement, the NHL aimed to protect its existing licensing relationships. The result is an agreement that gives Canadian Tire some licensing rights but doesn’t keep the league’s existing licensees and retailers from continuing business as usual.

“This is a traditional sponsorship agreement with a licensing upside that can benefit our royalty business,” said Keith Wachtel, NHL senior vice president of integrated sales and marketing. “They’re looking to promote even more NHL licensed products.”

In addition to its Heritage Classic and store-within-a-store rights, Canadian Tire will receive the NHL’s support in promoting a grassroots website that offers hockey training tips for players, parents and coaches. The retailer signed Chicago Blackhawks star Jonathan Toews to promote the site, which will be known as the Canadian Tire Hockey School.

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