Major League Baseball enlisted artist Thomas Kinkade and stock car driver Dale Earnhardt Jr. The NHL went with Legos, while the NBA opened a glitzy Manhattan retail store — and a hoops-happy restaurant in Orlando. The NFL will soon try on its own jeans, followed by a splash of cologne.
And NASCAR? The fast-growing sanctioning body already has go-kart theme parks, high-tech video game centers and several NASCAR Cafes.
The slew of products and ventures at each of the major sports leagues represents the Holy Grail of popular buzzwords such as brand, image and consumer awareness. In other words, the leagues want to move more than caps, T-shirts and video games, the traditional lifeblood of licensed sales. The concept, known as nontraditional licensing, requires a delicate blend of creative, innovative thinking and cold-hearted pragmatism.
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| Major League Baseball has turned to artists like Thomas Kinkade and Charles Fazzino, who painted this home plate, to help attract new fans to the sport. |
"The business has become much more sophisticated," said Robert Hollander, president at Brand Sense Marketing, a sports consultant. "Everybody wants those new business opportunities but you also have an entirely different retail picture. Getting shelf space is tough."
Not so tough, though, that the leagues won't consider a variety of prospective products, as well as even heftier gambles such as theme restaurants and amusement parks. The five biggest leagues — the NFL, NBA, MLB, NHL and NASCAR — reap between $1 billion and $3 billion each from annual licensed-product sales, but none will say exactly how much nontraditional ventures contribute to the bottom line.
The down side is obvious: Products go in and out of style. Others flop. With broader ventures, such as league-branded retail stores, the crushing economics of shopping malls come into play. NASCAR, for example, had a five-year run of stores, NASCAR Thunder, before owner Viacom abruptly pulled the plug on all 11 locations two years ago.
The setback didn't deter NASCAR's enthusiasm for similar ventures. The league now has 12 Silicon Motor Speedways, dedicated to high-tech simulators; three SpeedParks, stocked with go-karts, miniature golf and merchandise; and six NASCAR Cafes, typically with room for 400 diners. The simulators and go-karts are important because they offer the closest thing to driving a race car short of a driving school.
"Our chairman has always said one of our disadvantages was people can't go 'play NASCAR' in the back yard," said Blake Davidson, managing director of licensing. "Now they can."
More than most, the NHL depends on, and benefits from, the link between playing the sport and following it. The heavy equipment demands for even recreational hockey players makes the league's alliance with sporting goods stores all the more important. Brian Jennings, the league's vice president of consumer products marketing, said finding fun, unique alliances is crucial. "You don't want a bunch of me-too products," he said. "At the end of the day, you're selling emotion. The emotion of loving a team and loving a sport."
Executives at each of the leagues said the search for new products includes finding unique spins on traditional items — think female-fitted apparel alongside the typical men's T-shirt — as well as finding new pairings between sports and everyday items. The NBA, for example, is negotiating to roll out a line of interior house paints matching the specific logo colors of all its teams.
Sal LaRocca, senior vice president of global merchandising with the NBA, said such forays make sense. "If you have a 7-year-old who's a big Knicks fan, he'd probably like to have his room painted in Knicks orange. That's not a big stretch."
Other products may make sense but could hurt the league's reputation. LaRocca said the NBA consistently turns down requests for licensed body art, tattoos and tobacco goods. Market research for prospective items considered viable but less than slam dunks often occurs at the NBA Store on Fifth Avenue. LaRocca describes its regular hours as daily 10-hour focus groups.
The nation's top league, the NFL, has been among the most aggressive in recent years with nontraditional licensing. NFL jeans, keys, cologne, tape measures, flashlights, tool boxes and DVD trivia games are all heading to retailers this year. Leo Kane, the NFL's senior director of licensing and consumer products, said the combination of high-quality nontraditional products with NFL logos can help the league cut through the clutter.
Fans will associate the league with topnotch products at, say, Home Depot, just as easily as they will at Champs or The Sports Authority. With industrial products, for example, Kane said do-it-yourselfers as well as construction workers and carpenters will, in many cases, get a kick out of brandishing a Green Bay Packers tool kit. "Go where your fans are," he said.
At Major League Baseball, the strategy isn't just going where its fans are, it's also going where other leagues' fans are. Specifically, stock car racing fans. Baseball executives have formed partnerships with mutual corporate backers (Anheuser-Busch, MBNA) as well as top drivers (Bobby Labonte, Earnhardt Jr.) to get the erstwhile national pastime on track.
Earnhardt Jr.'s Budweiser-backed car has sported an All-Star Game logo in special events for the third consecutive year. Budweiser is the official beer of both NASCAR and baseball. The alliance provides national TV coverage — Earnhardt's specially designed car always runs the week before the All-Star Game — and a spin-off line of die-cast cars, caps and T-shirts split among the partners.
Howard Smith, MLB senior vice president, said the pairing brings baseball to NASCAR, an enviable audience with fierce brand loyalty. The same strategy is behind baseball's newfound interest in commercial artists such as Kinkade and Peter Max: Their popularity might convert new fans. Others may be fans of both, increasing sales potential. Thus Kinkade, painter of heavenly light, found himself painting Angels of Anaheim instead.
Beyond the providential, MLB concentrates on improving the traditional: Smith and licensees Majestic and New Era spent several years overhauling batting-practice jerseys and caps, unveiling them this season with strong early sales results. "All of these things reflect how the consumer connects with the game," Smith said. "You don't take that lightly."
Erik Spanberg writes for The Business Journal in Charlotte.
