MLB is offering its licensees some financial relief with the industry in distress because of coronavirus shutdowns. According to a recent letter to licensees from MLB Global Senior VP/Consumer Products Denis Nolan, obtained by THE DAILY, any licensee that can prove sales have suffered will be relieved of any upfront payment obligations. The letter reads: "As you may have heard, we do not have an official time frame for when our season will begin." Any licensee “in good standing” (i.e.payments up to date) will have "the opportunity to demonstrate" that its sales of MLB-licensed products have been harmed as a direct result of the COVID-19 crisis. The letter continues: "If so, we will provide an amendment to your license agreement(s) offering to forego any 2020 guaranteed compensation obligations, provided certain conditions are met and you continue to pay royalties on sales. ... We need you and your employees to be ready to react and work with us to service our fans and the retail marketplace, in what we hope will be a vibrant recovery."
UNCHARTED TERRITORY: Sports' cessation has produced widespread distress across sports licensing, including layoffs, furloughs and salary cuts. With nearly every licensee in a cash crunch, other sports licensors are adjusting their terms on an ad hoc basis. Having not started its season, MLB is believed to be the only large sports property to have adopted a blanket policy for its licensees.
