THE GAME OF LICENSING AND THE UNIVERSITY OF FLORIDA

The Florida Gators Logo

In the world of collegiate sports the licensing of Colleges and Universities are big business.  The University of Florida (UF) Gators located in Gainesville, FL is a collegiate sports monster in this area.  The proposed budget for the University Athletic Association, Inc. (UAA) (the athletic realm of UF) in 2012 – 2013 has a projected revenue generation of over $97 million dollars in which $8.3 million is directed to multi-media rights and over $5 million annually is licensing fees alone. Over the past few years the licensing of collegiate products has never been more serious business in Gainesville.  Would you believe that now the Gator logo, one of the most recognizable logos in collegiate athletics today was only bringing in a little over $1.5 million in 2001 and in 2004-2006 that number jumped to around $2 million.  These numbers have showed a steady increase over the past ten years as the Florida Gators have remained a major competitor in NCAA competitions.  This year UAA has projected over $5 million in licensed merchandise revenue.  Kristi Dosh, a ESPN business reporter and author of the website “The Business of College Sports” claims the trends of growth could be dedicated to the effect of Florida playing and winning National Championships, and that could be.  But a more sensible reason for the increase in in revenue generation is the partnership that IMG College a division of IMG Worldwide which is an industry leader in entertainment and sports licensing and multimedia rights currently handles all property sales rights, which include television, radio, Internet, corporate partnerships and the licensing for Gator Athletics.

Just how strong is the Gator logo?

According to the Collegiate Licensing Company (CLC) a company that’s mission is to serve as the guiding force in collegiate trademark licensing.  The University of Florida ranked #3 on their quarterly report for the first quarter of 2012.  According the CLC website the current licensing royalty rate at 10% of retail sales We must understand the big business of licensing in collegiate athletics, when CLC was acquired by IMG Worldwide in 2007, CLC handled over 75% of the licensed merchandise sold in the $3 billion per year market. Which simply was a great way for IMG’s introduction to the business of college sports.

Licensing Fees are everywhere

With a logo as strong at the trademarked Gator logo there are licensing fees are on for everything associated.  For instance UAA is paid over $1.6 million in equipment contracts, which is why the Gators where Nike uniforms.  Sure they are very safe and much research has gone into the safety, comfort and appearance, but it is about revenue generation.  The NFL also wears Nike and over $1.1 billion over five years was paid for that opportunity.  Currently UAA has over 500 licensees that adhere to the strict requirements set forth by the University and it’s Licensee Manager (CLC) to insure the logo is always well represented and revenues are accounted for by the licensee.

Who is responsible for all these licensing ventures?

It all started when UAA began a partnership with Sun Sports (formerly Sunshine Network).  The University began to see the advantages of having a third party come to the table and be responsible for all the regional network operations which included programming, production, advertising sales, marketing and promotions and general media relations.  This allowed UAA to focus more on and the day-to-day operations of running a national acclaimed collegiate sports program and not worry about the media portion.  CLC was already handling all the collegiate licensed merchandise.  Then came along IMG College who basically made it a priority in 2007 after acquiring CLC and Host communications to “provide unparalleled expertise and resources to the collegiate market through our licensing and multimedia rights service,” according the IMG College’s website.  Last year IMG College gross revenue was over $21.5 million and that is just a percentage of what they took in because the bulk of the actual dollars taken in were deferred to the properties like UAA, which signed with IMG College.

How did UF become a licensing powerhouse?

It is pretty simple as Cathy Weeden, Associate Regional Vice President; Southeast Region of IMG College puts it. “We exploit them, but not in a bad way!”  In a video presentation presented to the Sports Media Students at Full Sail University in Winter Park, FL.  Weeden discussed how through building partnerships IMG College allowed a more aggressive approach to the media rights and licensing game for UF.  IMG would go out and simply do what it takes to get the job done and advances where made on and off the field.  We can take a look at the 2012-2013 Proposed Budget for UAA.  When UF signed on with IMG College around 2007/2008 it almost was an immediate turn around for revenue generation in licensing revenue dollars generated.  Remember the $1.5 million mark in 2001?  That number was steadily increased a small percentage until 2008 where it almost doubled to a whooping $3.75 million.  And this year they are on target to do right around $5 million as previously mentioned.

How does UF maintain successful licensing revenue generation?

The old adage “You can not lead a horse to water.” Has a profound meaning here.  UAA/UF has been very successful at winning in collegiate competition.  Whether it is the NCAA Championship in Football, Basketball, Baseball or Tennis.  The University Athletic Department under the direction of Jeremy Foley, Athletic Director focuses on the complete sports program and also on winning championships.  As Kristi Dosh shared with us earlier, she believes winning national championships creates more revenue for the university and according to her the two Championships by Football and Basketball caused a drastic increase in ticket sales during the 2006 – 2008 seasons.  When you look at the numbers closely, you cannot help but notice the reasons for the increase in revenue had to do with Tebow and a few National Championships. But in all reality Jeremy Foley, let IMG bring all the sand to his beach they wanted and under the direction of Cathy Weeden she exploited the Gator Athletic program to know end.  Which in turn allowed for the coaches and athletic staff focus on their nationally acclaimed program at hand and left all the media and sponsorship to the experts.

What will be the outcome for UF in the world of licensing?

It is pretty evident with the ever-changing landscape of the marketing of collegiate sports agencies like IMG College will continue to make it a competitive and lucrative marketplace.  And when you want to wear that officially licensed logo apparel with the orange and blue of the Florida Gators they (IMG COLLEGE) will ensure UF received their 10% license fee.  Go Gators!

References

2012-2013 Operating Budget. (2012). Gainesville, FL: University Athletic Association, Inc.

Dosh, K. (2011, July 11). Can We Measure the Effect of National Championships? . The            Business of College Sports. Retrieved August 13, 2012, from  http://businessofcollegesports.com/2011/07/11/can-we-measure-the-effect-of-national-championships/

Hoium, T. (2012, April 5). Nike’s New NFL Deal Bulks Up Its Sports Cred on the Gridiron –    DailyFinance. Saving. Spending. Investing. Planning. Everything you need for a lifetime of financial decisions. — DailyFinance. Retrieved August 13, 2012, from http://www.dailyfinance.com/2012/04/05/nikes-new-nfl-deal-bulks-up-its-sports-cred-on-the-gridiron/

IMG College. (n.d.). IMG College. Retrieved August 13, 2012, from http://www.imgcollege.com/about-us/imgc-history.html (

Licensing & Trademarks – GatorZone.com. (n.d.). University of Florida Athletics – GatorZone.com. Retrieved August 13, 2012, from http://www.gatorzone.com/licensing/

The Collegiate Licensing Company : CLC History. (n.d.). The Collegiate Licensing Company : The Collegiate Licensing Company. Retrieved August 13, 2012, from http://www.clc.com/clcweb/publishing.nsf/Content/history.html

Sail, Full (Director). (2012). Cathy Weeden [Documentary]. USA: Full Sail Online.

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About leroyrooks

I was born and raised in Central Florida and have lived here pretty much all my life. I have been always involved in the leadership of major community events and love the profession of Public Relations. Some of the key components of PR I love are branding, social media innovation, event management and community relations.

Posted on August 13, 2012, in FSO - SMMBS and tagged . Bookmark the permalink. Leave a comment.

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