Masking the Problem: Face coverings have been the savior of the sports licensing industry
The wearable mouth shields employed for viral protection during the pandemic have many names: masks, PPE, gaiters, bandanas, and even balaclavas.
In sports licensing, some are calling the “face coverings genre” a savior. They make up the biggest new sports-licensing category in memory and outside of trading cards and video games, are the only good news for an industry more devastated by the pandemic than even the travel and leisure categories. While leagues were initially reluctant to enter the mask category, now demand is hot enough that some licensees are chartering planes to fly those licensed goods from where they are manufactured in China to the U.S.
“Honestly, I didn’t know what a gaiter was until March,” said Joe Ruggiero, senior vice president and head of consumer products at the NFL, which has licensed four companies for face coverings, including FoCo and New Era with valuable on-field rights, some with player numbers. “It’s too early to say how large this business becomes, but it’s easily the largest new category.”
FoCo founder Michael Lewis estimated that there have already been between 5 billion and 6 billion masks sold in the U.S. this year, both licensed and unlicensed. FoCo’s share of that? “We’re manufacturing 350,000 units a day in China,” said Lewis, licensed across all large sports properties. “I’m not sure if we’ll sell $100 million worth, but we’ll come close.” With the face coverings genre rocketing from nothing to around 45% of FoCo’s overall business since April, it will be the company’s best year ever. Leagues only got comfortable with licensing the category after a small charitable tithe was added to most deals. FoCo has thus far written checks for $5.9 million to those charities, both on its own behalf and for league licensors.
“The only thing I can compare it to is if socks and underwear had been invented at the same time,” said Lewis. “Business right now is as good as its ever been. I am humbled and embarrassed at how good it is.”
It’s not hard to see why the category has exploded. There is a ceaseless and wide-ranging demand for face coverings; they have extensive retail availability, eclipsing most licensed products; it is a licensed product serving a need other than emotional; and it is relatively easy to manufacture and ship.
At WinCraft’s manufacturing facility in Winona, Minn., face coverings have helped the company reverse a course that began furloughing 95% percent of employees to having masks now account for 20%-25% of business. No licensee is sure what a hot championship market for licensed products will look like during a pandemic, but they have all already designed championship masks as part of their sales programs.
“It will be a big part of any league’s championship licensing sales effort,” said Lewis.
WinCraft President and CEO John Killen noted that the company’s first masks, for the University of Kansas, were made in April and went from concept and design to retail in 15 days — the fastest product development ever. Since then, WinCraft, licensed by colleges and every major league except the NFL, has sold more than 2 million units and will come within 15% or 20% of pre-pandemic sales projections. (It also has a patent pending on its mask design.)
“Having a valid PPE product like these kept our retail relationships active and showed off the advantage of our domestic manufacturing,” Killen said.
Sports licensing is an industry in which supply-chain management, logistics, and at-once manufacturing are always vital. In a pandemic, those factors became critical. With much of the traditional retail for licensed products shuttered, many licensees were manufacturing and distributing unlicensed PPE, including surgical masks, long before it became licensing’s shiny new penny.
Logo Brands, licensed by the NFL and others for disposable masks, has sold more than 70 million masks, licensed and unlicensed. “We pivoted to PPE very early and, quite frankly, we thrived,” said Kris Talley, vice president of sales and marketing. Logo Brands’ core businesses of outdoor furniture and “homegating” products also exploded, but for PPE sales, the company opened up an astounding 285 new hospital accounts over 35 days. Revised projections have sales up 175% by year’s end.
“Masks and gaiters have become a bridge for the industry over troubled times,” said Kit Walsh, co-head of CAA Sports Licensing and a veteran with more than 25 years in the sector. “In terms of a sports licensing phenomenon, this is bigger than anything I’ve seen.”
CAA Sports Licensing helped the PGA Tour get into the face covering category, along with Churchill Downs. The latter sold masks that The (Louisville) Courier-Journal called the “must-have accessory” for this year’s Kentucky Derby, even with no fans at the track for the Sept. 5 race.
Every size company is feeling the impact. Vertical Athletics had already doubled its sales last year, thanks partly to MLB players wearing its licensed Bani Bands headbands. Despite having been licensed for face coverings by MLB only since July 23, Vertical Athletics founder Renee Hanson is projecting 400% growth for this year, having sold half a million units to date, and sales of another million anticipated. Demand and domestic manufacturing capabilities have also helped Vertical expand its distribution from fan and team shops to large retailers like Dick’s Sporting Goods and Kohl’s.
Retailers have had mixed returns. Brad Rosen’s SportsWorldChicago store is just across from Wrigley Field and sells a variety of Cubs and generic Chicago masks. “Masks are popular, so we have a lot of different kinds,” he said, “but there’s not much margin in them and with no fans allowed, there are days when its kind of like Chernobyl around here.”
Since face coverings have escalated to licensing phenomenon status, accompanying accessories have started to hit retail, including licensed “mask lanyards,” and what licensee Fan Creations is calling a “mask holder” — a team-logoed sign with hooks to hold masks, priced around $25 — which has been licensed by the NFL and some colleges.
With “phenom” status also comes the inevitable question asked about every licensing hit from bobbleheads to Silly Bandz: How long will it last? Certainly, the duration of the pandemic will help decide that. Beyond that, “Gaiters have been around and they will be around as it gets cooler,” said Hanson. “Masks have been worn in Asia for years, so it’s not a sign of weakness here anymore to wear one. So I see this continuing.”
Killen is even more optimistic: “We see face coverings becoming a staple item for Americans.”
More on how face coverings have been a bright spot for the sports-licensing industry, beginning at 23:56: