Consequences of Commercialization

A Licensing University session called “Spotlight: Sports Licensing,” produced by Licensing International and held as part of Licensing Expo in late August, hit on a number of current trends impacting the sports licensing landscape. One interesting topic that came up in the presentation, moderated by the late Bill Burke, senior VP marketing strategy and communications at Licensing International, was the possible ramifications, pro and con, of the recent Supreme Court decision allowing college students to capitalize commercially on their names, images, and likenesses (NIL). Here’s a look into the crystal ball:

• Beyond the star quarterback. The big names in collegiate sports have been trademarking their brands, signing high-dollar deals, and getting the bulk of the attention. “That’s one genre and it’s important,” says Michael Lewis, president and CEO of FOCO. “But what’s 10 times bigger is the 50,000 to 100,000 kids every year that can be remunerated for endorsing brands.”

• Harm to future earning potential. “We’re focused on making sure what the athletes do today doesn’t restrict their commercial opportunities at the next level,” says Terese Whitehead, VP consumer products and strategy, NFL Players Inc. She says the group licensing model has proven effective at the pro level and is likely to work for collegiate athletes as well. “It’s the wild, wild west right now and some structure is needed.”

• Impact on institutional sponsorships. Athletes’ sponsorship deals might conflict with those of the universities for which they play, costing the latter millions of dollars. “If Nike signs with Michigan State, but all the athletes are with Adidas, [Nike] won’t like it,” says Lewis. James Haskins, group VP, consumer products licensing, for the National Hockey League, agreed, asking what would happen if a college works with CCM or Bauer to supply its equipment but an athlete decides to sign with Warrior to supply his own sticks.

• Support for students. One positive impact will be an increased ability for students to support themselves in their sport. Haskins notes that the NHL is likely to be impacted less than the NFL or NBA by NIL in general, since its men’s players come more from overseas and the developmental leagues than from colleges (although the first two picks in the draft this year are from the University of Michigan). “In our sport, the dollars will be relatively modest,” he says. But he adds that hockey is an expensive sport to play in terms of equipment, and the NIL income could help students of all abilities and levels of fame subsidize their costs.

• A step toward parity for women. Unlike in pro sports, where females are paid less than their male counterparts, female collegiate athletes will have as many opportunities to generate revenue through NIL as the men, with the exception of the big names in football or basketball. “Our best athletes are playing in the college ranks on the women’s side,” says Haskins. “Some brands will hone in on that and we will see a real elevation there.”

• A boon to entrepreneurship. The 18- to 23-year-old age group is very influential through social media, and now they can receive remuneration for helping build a brand by serving as micro influencers and spurring word of mouth online. This serves as an incentive to help drive success for their partner brands. “Five brands none of us have heard of today will be household names in five years due to NIL,” forecasts Lewis.

It is still very early days for NIL at the college level. It will be interesting to revisit this topic in a year or so to see how things have shaken out and how many of these predictions will come true.

For a deep dive into the trends noted at Licensing Expo Virtual, including in the Licensing University sessions, the on-demand and live content produced by show organizer Informa Markets, and the virtual booths, read our in-depth coverage here.