1.  Copyright 1999 Prentice Hall 8-1 Lesson 6.3 – The Licensing Process Copyright © 2014 by Sports Career Consulting, LLC

2. Factors contributing to the appeal of licensed products Licensing  Intangibility of sport  Support / Involvement with team  Brand awareness LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

3. Licensee Advantages Licensing  Positive association with the sports entity  Greater levels of brand awareness  Help to build brand equity  Receive initial distribution with retailers  Expanded and improved shelf space LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

4. Licensee Advantages Licensing  May be able to charge higher prices  Lower advertising and promotional costs  Increased possibility of success and profitability  Connection with an athlete, sports team, entertainer, or corporation LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

5. Licensee Disadvantages Licensing  Athlete, league, celebrity or sport may fall into disfavor  Success depends on athlete / celebrity performance  Styles change quickly  Royalties and licensing fees can be expensive LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

6. Licensing  Manufacturing costs and risks  Competition can drive up costs associated with fees and royalties  Competition can have a negative impact on market share LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensee Disadvantages

7. Licensor Advantages Licensing  Expansion into new markets  Increase its brand equity  Minimized risk LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

8.  Enhanced company image and publicity  Increased profit from fees and royalties  Increased brand awareness or recognition LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensor Advantages Licensing

9.  May lose some control over the elements of the marketing mix  Potential for poor quality of a licensee’s manufactured products LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensing Licensor Disadvantages

10. The Licensing Process Licensing LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC  Licensees pay a licensing fee  Licensees pay a royalty for the use of specific trademarks on specific products  Licensees taking on production issues and assuming the risk manufacturing product

11. The Licensing Process (Music Industry) Licensing LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC  When you hear a Taylor Swift song while watching a television advertisement for Diet Coke, the brand likely invested a significant sum of money for the rights in a licensing fee for the rights to use the song in a commercialDiet Coke  The rights to use music through a license are bought and sold every day

12. The Licensing Process (Music Industry) Licensing LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC  Listening to the radio  Watching a movie and hearing music during a particular scene  Listening to music on Rhapsody online  Hearing music in a restaurant or store  Watching American Idol contestants perform hit songs from

13. LESSON 6.3 Intro to Basic SEM Principles Entertainment Business Financial Structure Lionsgate, the studio that produces “Mad Men”, shelled out a reported $250,000 (about five times the typical cost of licensing a song for TV according to a Wall Street Journal blog post) for the rights to use The Beatles song, “Tomorrow Never Knows,” in the closing scene of a 2012 episode of the popular AMC series Copyright © 2014 by Sports Career Consulting, LLC

14. Licensor / Licensee Relationship Licensing  Licensing provides greater profit, promotion, and legal protection for the licensor  The licensor approves the product and collects the licensing fees and royalties LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

15. For Example: Warner Brothers granted permission to Electronic Arts to use the Harry Potter character for the development of a new video game (for a fee)  = LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Licensor / Licensee Relationship Licensing

16.  A sports or entertainment entity permits a licensee to use their image, name or character for a fee  A corporation permits a licensee to use the corporate image or name for a fee LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC Character vs. Corporate Licensing Licensing

17.  Increased opportunity to associate with an athlete, sports team, entertainer, or corporation  Increased supply of available products  Competition can result in lower prices, new products and better quality LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC How does licensing affect the end customer? Licensing

18. Blank Slide Available for Teacher Edits LESSON 6.3 Branding & Licensing Copyright © 2014 by Sports Career Consulting, LLC

19. Branding & Licensing LESSON 6.3 REVIEW (ANSWERS) 1) Discuss the licensing process Licensees pay an initial, one-time licensing fee for the use of specific trademarked images for use in the creation of company products. Licensees then take on production issues and assume the risk by manufacturing products. Copyright © 2014 by Sports Career Consulting, LLC

20. Branding & Licensing LESSON 6.3 REVIEW (ANSWERS) 2) Explain the advantages and disadvantages to the licensing process Licensee advantages include: Positive association with the sports entity Greater levels of brand awareness Help to build brand equity Receive initial distribution with retailers Expanded and improved shelf space Copyright © 2014 by Sports Career Consulting, LLC

21. Branding & Licensing LESSON 6.3 REVIEW (ANSWERS) 2) Explain the advantages and disadvantages to the licensing process Licensee advantages include: May be able to charge higher prices Potential to lower advertising and promotional costs Increased possibility of success and profitability Connection with an athlete, sports team, entertainer, or corporation Copyright © 2014 by Sports Career Consulting, LLC

22. Branding & Licensing LESSON 6.3 REVIEW (ANSWERS) 2) Explain the advantages and disadvantages to the licensing process Licensee disadvantages include: Athlete, league, celebrity, organization or sport may fall into disfavor Success depends on athlete/celebrity performance Styles change quickly Royalties and licensing fees can be expensive Copyright © 2014 by Sports Career Consulting, LLC

23. Branding & Licensing LESSON 6.3 REVIEW (ANSWERS) 2) Explain the advantages and disadvantages to a licensee Licensee disadvantages include: Manufacturing costs and risks Competition can drive up costs associated with licensing fees Competition can have a negative impact on market share Copyright © 2014 by Sports Career Consulting, LLC