Last month came news that Learfield and its competitor IMG College were in late negotiations to merge. If the plans go through, this move would bring together the two major agents in the collegiate licensing business, not to mention their vast sponsorship and multimedia operations, marking a big change for the collegiate licensing business.
It also would be the latest in a string of mergers and acquisitions having an impact on the licensing community overall in 2017. Some of the areas with the most M&A activity of late include:
- Retail-etail connections. Amazon’s August acquisition of Whole Foods is likely to change how food and beverages (and other categories) are sold, although the specific impact is unclear as of yet. In addition, Wal-Mart bought Bonobos, the multichannel men’s clothing brand with roots in e-commerce, and PetSmart acquired pet products e-tailer Chewy.com.
- Fashion. VF Corp. added Dickies to its stable of labels including Timberland and Vans, among others; footwear makers Aldo and the Camuto Group combined; and, in the world of handbags and accessories, Coach acquired Kate Spade. Many of these companies serve as licensors and/or licensees.
- Category combinations. A number of retailers combined for greater domination of their product category or retail tier. Dollar General took over Dollar Express in the value channel, while Bass Pro Shop’s acquisition of Cabela’s became final. The PetSmart-Chewy deal mentioned above also fits into this description.
- Home shopping. QVC assumed control of HSN, in which it formerly held a minority share, bringing the bulk of the home shopping world under one roof. Both companies, which oversee significant online operations in addition to TV shopping, have seen their sales decline in the face of competition from the big e-commerce companies.
- Content distribution. Discovery Communications bought Scripps Networks, bringing together the former’s television and digital brands including Animal Planet, Discovery Channel, and TLC, with the latter’s, including Food Network and HGTV. Many of the networks on both sides of the equation manage significant licensing efforts.
- New business expansion. Sports-merchandise e-commerce powerhouse Fanatics purchased licensed sports apparel company Majestic Athletic. The deal furthers Fanatics’ recent strategy to become more than simply the leading sports e-tailer as it adds bricks-and-mortar retailing, manufacturing, and other capabilities.
While the specific ramifications of each of the recent deals mentioned is unknown in these early days, collectively they are likely to compound many of the issues that the licensing business has been facing in recent years. These range from ever-shrinking shelf space to a growing concentration of power among the biggest players in retailing, IP ownership, and manufacturing.
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