Fanatics, Oregon Hope To Benefit From Unique Bundled-Rights Deal
Fanatics is taking the vertical model that it has employed in pro sports to the college space, as the Univ. of Oregon has agreed to a comprehensive 10-year deal that will make Fanatics a licensee, manufacturer and retailer for UO gear as of Jan. 1, 2020. This is the first bundled-rights deal of its kind for Fanatics with a university. Fanatics previously ran UO’s online team store, but the new pact will make it the primary licensee for apparel, headwear and most other product categories. Fanatics also will manufacture and distribute product to local retailers and direct-to-consumer. Fanatics College Exec VP Derek Eiler called the deal "transformative," saying, "A new model is here." UO's existing relationships with Nike and Columbia will remain separate. “We’ll be in a position to make sure retailers have new product quickly,” said Fanatics College Senior VP Chris Prindiville. “Seldom in college have there been true long-term partnerships. Now there’s stability" (Michael Smith, THE DAILY).
A NEW FRONTIER: BLOOMBERG NEWS' Eben Novy-Williams reports the deal includes a $1.5M "signing bonus" for UO, plus a guarantee of $21.5M in "royalties over the course of the partnership." That money is "split evenly between the school’s general fund and its athletics department." Nike retains "exclusive rights to its Oregon-related intellectual property," as "nothing Fanatics makes will use the popular O logo, nor the fighting duck design that often appears on the team’s jerseys." UO is "looking to avoid the major swings that come with the cyclical success of its sports teams." The school’s royalty revenue "increased every year" from '09-14. Since then, however, the football team "has hit a rough patch and royalty revenue has fallen" 33%. Previously, UO "managed deals with about 300 licensees one by one, with no upfront guarantee on sales." Under this new model, Fanatics "will handle all of that itself." UO also is an "early client on Fantelligence, a new data-sharing product that Fanatics rolled out earlier this year." The company "plans to share customer data with some of its college partners, helping schools like Oregon get a better sense of who Ducks fans are, where they live and what they like" (BLOOMBERG NEWS, 12/13).