1. -OBTAIN ENDORSEMENTS FOR SPORTS/EVENTS -DEVELOP A LICENSING PROGRAM SEM II-2.07

2. Endorsement(s) Is an act of giving one's public approval or support to someone or something. Testimonial in advertising, written or spoken statement endorsing a product. Athlete/Entertainer actually becomes a ‘human brand’.  Must possess two kinds of key attribute groupings:  those you see on the field  those you see off the field

3. On-field Attributes Performance quality Winning record Skill Style Potential These attributes speak for themselves. Brands want their endorsers to be successful, to be skillful and to play the game in style.

4. Off-field Attributes Personality Physical attractiveness Uniqueness or unique personal background Role model Relationship with fans Brands should look for athletes who possess most of the off- field attributes above. Even when one of these attributes is clearly not achieved, possessing the on-field attributes and the other off-field ones may just be enough.

5. Considerations in Obtaining Endorsements Must be positive, charismatic, trustworthy Must be someone consumers know Career must be active…usually Someone who presents few risks Must be believable

6. Reasons for Obtaining Endorsements Add to credibility of product/company Cut through commercial clutter

7. Benefits Obtained from Endorsements Fans will buy endorsed products Viewers less likely to turn commercial off Consumers believe celebrities

8. Why learn how to develop a sport/event licensing program? Sales of licensed products:  Generate billions and billions of dollars each year  Create plenty of work for sport/event marketers It’s important for the people in charge of licensing to:  Develop licensing systems carefully  Maintain licensing systems carefully Licensing mistakes can prove to be disastrous:  For licensors  For licensees  In finances

9. Licensing programs exist for three main reasons: Profit Public relations Protection  One company allows another to use its trademarked property to manufacture and sell products.  Licensors legally protect all of the organization’s names, logos, slogans, and graphics by registering them as trademarks.  Without a trademark—any manufacturer could use a logo on its merchandise and profit from it.  With a trademark—licensors have the right to charge that manufacturer to do so and to collect part of the profits.

10. The Basics of Trademarks Trademark: a word, name, symbol, or device used by a person, generally a manufacturer or merchant, to identify and distinguish its goods from those manufactured and sold by others. Includes/covers: Words Names Symbols Devices Internet domain names Pictures Slogans Examples—“Monday Night Football,” Churchill Downs, Nike “swoosh” logo, Rollerblade, www.reebok.com, trading card pictures, “Sports is life…the rest is just details.”

11. Service mark a word, name, symbol, or device used to identify and distinguish a company’s services, including a unique service, from those of another service provider. Signifies services rather than goods Professional sport franchises are considered sport services. Examples—“NFL,” “The Chicago Bulls,” “MLB” Personal training and fitness are also sport services. Example—World Gym name and logo

12. Trade Dress a particular type of trademark that protects the distinctiveness of the appearance and image of a good or service Protects a product’s packaging Graphics Size Texture Shape Color or color scheme Particular sales techniques Example—athletic shoeboxes Protects distinctive décor and atmosphere Applies heavily to stores and restaurants ESPN Zone

13. Collective Mark a trademark or service mark used by members of a cooperative, association, or other group or organization.  Nation Hockey League Players Association  Major League Soccer  DECA

14. Mark a shorthand reference to any type of mark, including trademarks, service marks, and collective marks

15. Registered Mark a mark registered in the United States Patent and Trademark Office  © TM ® SM

16. Trademarked Property trademarks are owned by the entity (licensor) that registers them and no other entity may use them or the likeness without permission from the licensor.

17. Trademark infringement the reproduction, counterfeiting, copying, or imitation, in commerce, of a registered mark In commerce—the company copying the mark is using it to sell its own products. Copy doesn’t have to be exact, just enough to cause customer confusion.  A four-ring logo would be close enough to the Olympic five- ring logo to cause confusion.

18. CAPS (Coalition to Advance the Protection of Sports Logos) “Logo cops” Formed in the early 1990s Addresses trademark protection and enforcement concerns for all the major sport leagues and college athletic departments Works closely with law enforcement to assist in the investigation and prosecution of trademark violators Offers guidelines to educate consumers on how to distinguish real merchandise from fake  High product quality  Tightly woven embroidered logos  Intact garment tags

19. How to develop a licensing program 1. Perform nonmarketing activities.  May need an attorney for trademark issues  Coordinate budget issues with Chief Financial Officer  Decide whether the licensing program will be managed internally or externally  Internally—your organization’s employees will manage and oversee all aspects of the program.  Externally—you will hire an agency to manage it for you.  Research shows that internal management tends to work better.  Internal management is more expensive.  It typically produces higher profits than external management because there are no commission fees to be paid.  Professional sports—licensing programs are usually managed by a part of the league known as the “properties division.  Advantages of agency management (external)  Agencies have a great number of contacts in the wholesale and retail industries.  They are experts in understanding licensing programs.  Sometimes it’s a good idea to hire an agency to get your licensing program started and then bring it under internal management once it’s up and running.

20. How to develop a licensing program 2. Select your licensees.  Most important step in developing a sport/event licensing program  Many different types of companies will be interested in becoming licensees.  Exclusive license categories and nonexclusive license categories  An exclusive category is one in which only one licensee can manufacture merchandise. McArthur Sports—only business authorized to produce golf gear bearing team logos for the NFL  A nonexclusive category is one in which more than one licensee can manufacture merchandise. Trading cards  You will generally be able to charge more for an exclusive license than a nonexclusive one.

21. How to develop a licensing program 3. Develop an application process for your licensing program.  Develop an efficient way to distribute and collect submissions.  Gather the following information:  A complete business and marketing plan  A listing of their existing retail distribution channels  A sample or drawing of the product(s) they plan to manufacture  A history of their reputation and corporate knowledge  A disclosure of their financial status  A list of licensing references  Proof of insurance  Remember that you are entrusting a substantial portion of your organization’s profits and public image to your licensees.  Consider each applicant carefully.  Choose licensees you feel are trustworthy.  Try to contact the owner personally.  Make sure to speak with the company’s competitors.  Make sure to speak with the company’s previous licensors.  Check with trade journals in the industry about the company’s reputation.

22. How to develop a licensing program 4. Design the license agreement. (May need to call on legal counsel.) Basic components of license agreements:  License grant  Specifies which rights and properties are being licensed  Specifies what types of merchandise will be produced  Describes the exclusivity of the category  Term  Specifies the begin and end dates of the contract  Describes the processes for contract renewal  Compensation  Contains all details regarding payments  Ways licensor is paid: Guarantee—up-front fee based on expected sales Royalties—5 to 15 percent of profits after the guarantee  Includes a detailed payment schedule

23. How to develop a licensing program: Design the license agreement cont’d  Quality control  Sets up procedures for you to review the work of your licensee  Sets up requirements the licensee has to report to you on all issues related to the merchandise  Restrictions and requirements  Restrict your licensees from subcontracting any part of the license to other manufacturers.  Require that licensees mark all their products with the proper identification. Hangtags Labels  Protect your organization, but try to do so without strapping your licensees with unreasonable or unfair obligations.  Warranties and obligations  Lists the reasons the license can be terminated  Spells out what happens if either party violates the agreement  Determines under what circumstances the agreement can be changed

24. How to develop a licensing program 5. Establish a system of maintaining relationships with all your licensees.  Routine checks to ensure the quality of your licensed merchandise  Routine checks to ensure compliance with your restrictions and requirements  “Code of conduct” to prevent unfair wages or worker abuse