1.06 Licensing & Naming Rights

1.06 Creating Positive Image

Licensing & Naming Rights

Terms

• Licensing: Permission to copy trademarked property for a percentage of actual sales, also called royalties

• Licensor: The rights-holder of the name, logo, or trademark, i.e. sports leagues & individual teams

• Licensee: Company paying for permission to use the name, logo, or trademark, i.e. Nike, EA Sports, Topps & Upper Deck for trading cards

• Note: Sports Marketers have an advantage in licensing because of sports' universal appeal

Relationship Between Trademarks and Licensing

• Trademark is a word, phrase, symbol, logo or design that identifies and distinguishes the company from others.  

• A trademark has legal protection through the United States Patent and Trademark Office

• It is these trademarks that licensees wish to use

Multiple Choice

Which of the following companies is a licensor that holds the rights to trademarked property:

• Champ's Sporting Goods

• The New York Yankees

• Adidas

• Upper Deck

Multiple Choice

A company that manufactures products using trademarked property is known as a

• licensee

• licensor.

• retailer.

• union.

How Licensors are Compensated

• Companies typically pay between 5 and 10 percent of wholesales sales in the form of Royalties; a percentage of actual sales.

Royalties

1.06

Licensed Merchandise

1.06

Multiple Choice

Which of the following is an example of a licensed product:

• NASCAR earrings

• Converse shoes

• Wheaties cereal box featuring an athlete

• John Deere Classic golf tournament

Multiple Choice

The basis for the licensing process is

• manufacturing.

• sponsorship.

• trademarked property.

• the fans.

Types of Sports License Agreements

• Brand Licensing: Process of creating and managing contracts between the owner of a brand/licensor (Carolina Panthers) and a company that wants to use the brand in association with a product/licensee (Nike)

Types of Sports License Agreements

• Sponsorship: Supporting an event, activity, or organization by providing money or other resources that are of value to the sponsored event

• Endorsement: Athletes go into contracts with companies to promote their product by tying their name to it.

Process of Licensing

1.06

Multiple Choice

Sports marketers have an advantage over all other types of licensors in the international marketplace due to which situation?

• Soccer is so popular.

• Sports are universally appealing.

• Foreign countries are usually wealthy.

• They already make so much money in the U.S. market.

Multiple Choice

What are royalties?

• A percentage of expected sales

• A percentage of actual sales

• A percentage of union dues

• A percentage of taxes

Naming Rights

1.06

Naming Rights

• Naming Rights are a financial transaction and form of advertising whereby a corporation or other entity purchases the right to name a facility or event, typically for a defined period of time.

Reasons to Sell Naming Rights

• Increases revenue & public awareness of the venue

• Opportunity for new market

• Assist with construction or maintenance costs at the venue

Reasons to Buy Naming Rights

• Provides exclusivity

• Maximize exposure

• Promote customer retention and or increase market share

Multiple Choice

What might a sports organization offer a business to encourage that business to sponsor an event?

• Naming rights

• Percentage of profits

• Partial ownership

• Free advertising

Naming Rights Advantages

• Promote goods/services

• Promote customer retention

• Increase market share

Naming Rights Disadvantages

• Cost

• Long-term commitment

• Association with losing team

Multiple Choice

A primary reason that large businesses purchase the naming rights to a new sports or event facility is due to which situation?

• It usually increases spectator fan-base loyalty levels.

• It is the least expensive way to create name recognition.

• It reduces the need to engage in other promotional activities.

• It provides exclusivity and has potential to maximize exposure.

Multiple Choice

Which is a primary reason that many colleges and universities sell the naming rights for their new football stadiums or basketball arenas?

• Help pay for construction expenses

• Honor a former student-athlete

• Create publicity for the new facility

• Encourage fans to attend sports events

Businesses to Avoid

• Gambling

• "Adult " Entertainment

• Controversial companies