Since
Chris Halpin, NFL senior vice president of licensing and consumer products, moved over from his prior league post as vice president of media strategy and business development less than two years ago, the NFL has extended deals with some of its biggest licensees, like
Nike and
New Era; cut an exclusive trading card deal with
Panini; and cemented a long-term hookup with licensed sports e-commerce specialist
Fanatics. Just before Halpin switched roles, the league extended its hefty rights deal with
Electronic Arts.
Now seeking yet another large multiple in a licensing business largely devoid of them, the NFL is bidding out five years of retail rights to its jewel events: the Super Bowl, including the NFL Experience fan fest and the Super Bowl stadium; the Pro Bowl; International Series games; the NFL draft; the combine; the hotels serving all of those events; and Super Bowl Host Committee retail locations. The request for proposals was issued earlier this month.
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Aramark set sales records for its retail efforts at Super Bowl 50 this year.
Photo by: TERRY LEFTON / STAFF
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The NFL had awarded those rights separately, usually among disparate vendors. Now it’s looking to lock up an on-site retailer with a five-year exclusive, beginning with the 2017 NFL combine.
Recalling that Aramark set sales records for its NFL Experience and associated retail efforts in San Francisco this year, while Legends was also setting records for Super Bowl retail at Levi’s Stadium in Santa Clara, the NFL’s timing is dead-on, as always, when it comes to exploiting competitive commercial categories.
Aramark has retail merchandising rights at the NFL Experience and NRG Stadium for Super Bowl LI in Houston; past that, they haven’t been awarded.
Both the five-year duration and the number of events combined in the RFP are unprecedented. The RFP has been expected since just after Super Bowl 50, and it has the world of venue merchandisers in quite a tizzy. Industry sources tell us that Legends, Aramark, Fanatics and MainGate all consider landing the deal vital; even the more food-oriented venue concessionaires like Levy Restaurants and Delaware North are salivating, because in aggregate, these NFL events account for more than $12 million in annual retail sales of licensed merchandise.
With Fanatics having locked up NFLPA licensing rights earlier this year, and subsequently signing the NFL to a long-term deal that many in the industry construed as a grant of “most-favored nation” status, there’s intense scrutiny on the e-commerce specialists. Keep in mind Fanatics also administers e-commerce for NFL.com and 15 NFL team sites.
“Every competitor feels like Fanatics is trying to buy up this industry, so this [RFP] will really be scrutinized,” said one industry insider.
A decision is expected before the next NFL season. Other than financial terms, selection criteria are always a moving target, but several sources familiar with the proposal said that marketing and advertising support; “innovative merchandising”; technology capabilities, including mobile commerce; social media; capabilities in overseas markets; and the ability to manufacture private-label licensed goods were listed as determining factors.
Another intriguing difference is that the RFP came from the NFL’s corporate development office, rather than its consumer products group. Recall that bundling all these events means the league’s international, events and consumer products groups will be involved.
Several industry sources said the NFL recently has been citing the $45 million to $50 million worth of annual in-house retail efforts at Augusta National (where NFL Commissioner Roger Goodell is a member) during the Masters as a paradigm. However, as more than one licensing veteran reminded us, merchandise at the Masters is sold exclusively at Augusta National, as opposed to the wide availability of Super Bowl product.
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.
