USD Football 1997

lime Out MERRILL LY NCH PRESENTS " THE BUSINESS OF COLLEGE FOOTBALL" GOTTA HAVE IT COLLEGE MERCHANDISING HAS EXPLODED INTO A BILLION-DOLLAR MONEY-MAKER, WITH NO END IN SIGHT

Unive rsity of Nebraska director of li cens– ing and sales Chris Bahl remembers hi s trip to the annual sporting goods manufactur– ers' "Super Show" a few years back. The Cornhuskers were riding high on th e foot– ball field, and th e coll ege merchandi se indu stry was seeing blu e. Talk about you r grea t opportunities. "W e got hot at th e right time," Bahl says. "All the top teams at th e time were Notre Dame, Michigan, North Carolina and Duke, and their colors were all blue. I told retail ers that we had a different look - our main school color is reel - and that if they put our stuff on the shelves nex t to the other schools, it would sell." Bahl was right. In 1996, Nebraska had a net licensing profit of $3.3 million , quite a boost from its pre-national championship days, when it was lucky to reach $1 million . Although it isn't close to the $6-8 million industry giant Michigan has been raking in during the last five years, it still represents a healthy revenue stream and indicates just how th e merchandi sin g industry ha s boomed in the las t decade. Thanks to th e ever-growing interest in college athletics, sophi sti ca ted marketing techniques and aggressive salesman ship by school s and manufacturers, product lines have blos– somed , and di stribution channel s have become more diverse. "T en to 15 yea rs ago, college merchandise was limited to what was ava ilabl e in uni ver– sity bookstores," says Di an ne Kopf, public relations director for th e Atlanta-based Collegiate Li ce nsin g Company, which serves as a li censing rep for more than 160 colleges. "The selection was also limited, as far as design. " CLC estimates that 1983 sales for all products we re $250 million. In 1996, th at fi gure hit $2.5 billion. In the ea rly 1980s, coll eges had no protection for their logos and trademarks, and much of what was availabl e was unauthori zed and generall y of poor quality. As a result, th ey were afraid to

enter into agreements with manufacturers, since they couldn 't be sure wheth er how they would be represented. Compounding the problem was the reticence of university bookstore owners, who feared that any increase in distributi on would hurt their tt licensing Is away to sell your school~ success and make big money~ without owing people favors ~~ ,..fQlilJris BaililJt~Ntbfflsk.ai di11ctor ot Ue;1nsin9 and s les own sales. lt added up to a problem for con– sumers. Even though they demanded mer– chandise, they couldn 't find it. CLC played a big rol e in breaking the log– jam. In the late 1970s, Bill Battle, who played at Alabama under Bear Bryan t and later coached at Tennessee, worked for a company that handl ed licensing of all prod– ucts bearing Bryant's name or likeness. In order to do that, it also had to represent Alabama. Battle helped arrange agreemen ts between th e two parties and vari ous manu– facturers, ensuring high-quality merchan– dise and a steady stream of revenues. In 1983, he signed nine more schools in the Southeastern and Atlantic Coast confer– ences and formed CLC. Although the com– pany doesn't represent all of th e nati on's big-name colleges, it has certainly impact– ed the indu stry in general and serves as a barometer for what schools arc popular. Accord in g to C LC, the sales leader among its clients for fiscal year 1997 was Michigan, followed by No rth Carolin a, Ken tu cky, Florida, Pen n State and Nebraska. One can imagine that schools like Notre Dame and Ohio State, which aren't represented by CLC, also have hefty licensing revenues. "Li cens ing is a way to sell your school's

success and make big money, without owing people favors or perks like you do in other marketing programs," Bahl says. "lt used to be that athletic departments relied on donors, but if a guy gave $10,000, the school probably had to give him $12,000 in favors. Sponsorship packages are simil ar, because schools have to give their sponsors ti ckets, advertisements and other perks." CLC reports that th e manufacturer score– board is also topped by some familiar names. Leading th e apparel side is Nike, with Starter second and Champion third. The non-apparel sales leader is video-game titan EA Sports, followed by Commemorative Brancls/Artcarvccl, which makes school rings and like items, and Sony, another video game indu stry magnate. Kopf forecasts big growth for compani es like EA Sports, which has been a player for only three years but is already at the top. Bahl, meanwhil e is bullish on licensing's potential, particularly at Nebraska. The school is opening a retail store in Memorial Stadium this year in th e hopes of keeping its revenue stream flowin g. "W e're staying aggressive," he says. And successful. UP, UP AND AWAY Since colleges took control over the licens– ing of their logos and trademarks in the early 1980s, retail soles of college mer– chandise hove hit the ceiling. Below ore the estimated soles, in billions of dollars, of college merchandise since 1983. Year Billions Sold 1983 $.25 1984 $.4 1985 $.5 1986 $.6 1987 $.75 1988 $.8 1989 $1.0 1990 $1.2 1991 $1.5 1992 $1.7 1993 $2.l 1994 $2.5 1995 $2.5 1996 $2.5

PRODUCED BY THE EDITORIAL PROJECTS DEPARTMENT OF TOUCHDOWN ILLUSTRATED• . 1997 PSP INC.